Uniswap exchange: easy earnings and investments in 2022
Uniswap exchange is a global trend that will only grow by 2025. The cryptocurrency market has doubled its number of users in the past six months. According to a study conducted by Crypto.com, since January of this year we have seen an additional 115 million users. Amid the cryptocurrency market crash that occurred in May 2021, Decentralized Finance (DeFi) protocols went on strong and made over $370 million in a single month. The highlight for all this movement is Uniswap, the market's leading Decentralized Exchange (DEX) which posted a profit of $150 million (41% of the total DeFi segment). "Uniswap was already an asset that had a high representativeness compared to the other crypto assets in the market, but recently it has become supported by more institutional custodians and exchanges that are within the list of exchanges tracked by Nasdaq, the criteria required by the NCI," said Samir Kerbage, CTO of Hashdex, in adding the asset to the manager's index. After reading this article, you will be able to use the protocol (even if you are a beginner in the business), understand the competitive differentiators of the project as well as realize how undervalued the UNI token is.
What is Uniswap?
Uniswap is an open-source platform where users can perform cryptoactive swaps. Translated, it is a Decentralized Brokerage (DEX) founded by one of the developers of the Ethereum network, Hayden Adams, in 2018. Currently, it is the absolute leader in trading volume. With more than 2.5 million users, the platform is the largest decentralized financial application (DeFi) today, having more than ten times the number of users of its main competitor: SushiSwap, which has 200,000 users. The cryptoactive Uniswap (UNI) is its governance token. By having such a token, it is possible to interact with the protocol, participate in the platform's liquidity mining processes, and even have voting power in important decisions of the project. The platform itself recognizes the importance of the community to maintain the exchange, as stated in its blog: "Uniswap is now particularly well positioned for community-driven growth, development, and self-sustainability. The mainstream Uniswap: the gateway to institutionals "We are talking to Uniswap for a possible partnership" This was the statement made by Robinhood in a story carried by The Block. The Robinhood platform, which offers trading services for stocks, options, funds, gold, digital assets and even earn a percentage for leaving money in the account, reinforced the importance that the cryptocurrency market is having in the company's revenue and stated that there are plans to expand its business in this segment. In addition PayPal CEO Dan Schulman stated, according to a Blockworks story, that "DeFi and smart contracts will be our next focus" and that they are also eyeing a partnership with Uniswap for this. In the midst of this year's biggest Ethereum conference, Ashleight Schap, Uniswap's chief growth officer, explained why he believes we are at a very close moment for the DeFi market to become mainstream, with financial market giants such as PayPal and Robinhood, both mentioned earlier, adopting DeFi solutions like Uniswap. "Maintaining relevance to their user base is a big reason why all these giants are really starting to look closely at working with something like Uniswap." - Ashleigh Schap, Head of Growth at Uniswap, EthCC 2021
Why does it receive so much prominence?
In it, those who want to trade crypto-actives can also contribute to a Liquidity Pool (or liquidity pool). Users who leave their tokens in these pools receive fee payments as a reward. In this way, Uniswap ends up solving an issue that usually haunts decentralized brokerages: the lack of liquidity of an asset. In addition, in May 2021 the protocol launched its 3rd version (UNI V3). UNI V3 aims to develop a more efficient Liquid Pools model, seeking to generate more revenue (something it has successfully accomplished), it also aims to make platform fees cheaper by using a second layer solution in ETH's network (scalability solution). However, the main highlight of this update is that it brings the possibility for stakers to define which price bands they want to participate in the exchanges - something that was only possible through a Centralized Broker (CeFi). In general, we can summarize that the differential of Uniswap before its competitors is due to its constant evolution, always with well planned updates, having the following objectives 1. Focus on improving its product for the final client; 2. Strategies linked to the implementation of innovative solutions; 3. Avoid using means such as token distribution and aggressive farming policies to increase your user base.
How to use Uniswap?
Uniswap is a fully decentralized exchange, running 100% on the Ethereum network. You will find infinite combinations of tokens to trade. Before proceeding, it is important to say that it is now possible to buy UNI tokens directly in Brazilian Reais (R$) - another innovation that differentiates Uniswap from other decentralized brokers. To perform any swap on Uniswap, it is necessary to have a cryptocurrency wallet compatible with the Ethereum network (ERC-20). The most used wallet is Metamask, which is free and intuitive to use. In addition, it has a plugin for Chrome - and other web browsers -, allowing you to create new wallets or import a wallet you already have, using only the recovery words (seeds). Returning to the use of the Uniswap platform, in summary, the first step is to have an Ethereum wallet installed and a certain amount of Ethereum (ETH token) to pay the gas, the miners' fee, needed to register the transaction on the network. To access Uniswap, you can search for app.uniswap.org or click here directly. Once you have done this you will need to connect your wallet to the protocol. To connect, simply have the Uniswap protocol homepage open and click on "connect to wallet". Once connected to your wallet, you will be able to see your balances and that's it! You are ready to trade the assets you want. If you want to know more details about your transactions, you can also click "Pending" while the transaction is being confirmed. Doing so will give you more in-depth information in the block explorer. So far the platform has a total of 50,548 token pairs to be traded. In any case, don't forget that you need to have ETH in your portfolio to pay the fees (gas) for swaps, regardless of whether you will trade Ethereum or not.
Conclusion
With a market capitalization of about $17.450 billion, Uniswap is the tenth most valuable digital asset among the thousands of existing cryptocurrencies. Currently, there are 587 million UNI coins in circulation and the maximum supply of UNI coins is limited to 1 billion. After trading below $2 in November 2020, today its price stands at $29.71 with a 24-hour trading volume of $658,375,910. Despite all the changes that the protocol has made, is making and will make, it is valid to reinforce that the Uniswap Protocol works through programmable contracts, the smart contracts, being immutable and decentralized, which further reinforces its value. For everything mentioned throughout this article, most investors are optimistic about Uniswap's prospects. Some say that the price could reach $80 in the next five years.