Uniswap is a blockchain technology that solves the problems with standard cryptocurrency exchanges such as slow transaction times and low trading volume. It offers its users automated trading, instant deposits, and decentralized exchange capabilities all through the use of smart contracts and ethereum technology.
It has several advantages over other exchanges.
1. Many of Uniswap’s features are automated so users do not have to log in or sign up.
2. Users can deposit/withdraw funds without trading.
3. All transaction fees are included in the trades, so the average transaction size is very small.
4. UNI trades a variety of cryptocurrencies for each other.
5. It holds funds in escrow for any user who trades.
How does Uniswap work?
It creates a transaction history of bitcoin or Ethereum transactions. In order to access these transactions, a user must have a dedicated wallet on the blockchain and a Uniswap user address associated with the wallet. The user should then generate a Uniswap keypair and then input this Uniswap keypair into a wallet app in order to access a transaction history. In order to add tokens to a specific exchange, a user must first move their token to the blockchain by using a smart contract. At the moment, Uniswap does not support creation of smart contracts on its own, but rather relies on external providers.
What can Uniswap do?
The Uniswap protocol facilitates automatic exchanges between tokens using Ethereum smart contracts. The Uniswap system includes an initial coin offering (ICO) feature that allows issuers to sell cryptocurrencies using the Uniswap tokens, including zero-fee transactions. ICO tokens can be listed on the Uniswap platform as a security by a token issuer to raise capital. One of the significant features of the Uniswap system is a decentralised exchange. In order for an exchange to function, users need to be able to buy and sell tokens. However, there is no centralised third-party provider to verify tokens for purchase, purchase price, or the legality of a transaction. The result is that the exchange is decentralised and based on the verification of other users.
The lack of centralized trading and information accessibility of cryptocurrency exchanges make it difficult for users to perform proper research before buying into a new cryptocurrency. It allows users to instantly purchase the digital assets that they are interested in by simply paying in Bitcoin or another cryptocurrency. To simplify purchasing of cryptocurrencies, Uniswap accepts bank transfers as payment. It is likely that users will be able to purchase crypto with cash by the end of 2019. Uniswap also supports third-party marketplace platforms such as Coinbase, Coinbazaar, Cex.io, and Binance that could introduce new ways of buying and selling cryptocurrencies.
The main drawback of UNI is its high barrier to entry and only slightly regulated structure. At this time, Uniswap does not support trading between cryptocurrencies with fiat currencies. B. Peer-to-Peer Exchange Peer-to-peer exchanges allow users to trade or interact with other users in a one-to-one (or small group of users) transaction. These exchanges are all decentralized in nature and do not require the use of trust-based gateways or centralized exchanges such as Bitfinex or Coinbase. What Is Peer-to-Peer (P2P) Exchange? P2P exchanges are similar to exchange on the traditional centralized model. However, with P2P exchanges, users only need to know their trading destination.
- Huobi Global
- Coinbase Exchange
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