With the rising popularity of cryptocurrency and digital finance, many smart contract interfaces have emerged. Uniswap is one of them, and it has become very well-known over the last couple of years.
But is Uniswap a good investment? Should you look into it? Our expert analysis will answer these questions and more.
What is Uniswap?
Created in 2018 by Hayden Adams, Uniswap functions as a protocol for automated token exchange on crypto platform, Ethereum. With the help of this smart contract interface, you will be able to swap ERC20 tokens. In other words, Uniswap is useful when you want to exchange cryptocurrencies because it is a decentralized finance protocol. It allows for automated transactions between the crypto tokens on the Ethereum blockchain with the help of smart contracts.
Uniswap has created a formalized model in order to pool liquidity reserves and guarantee decentralized asset exchange at no extra cost. Uniswap’s usage of liquidity pools sets it apart and solidifies its attempt at creating efficient markets. Bots and individuals, also called “liquidity providers”, offer liquidity to the exchange by adding tokens to a smart contract and allowing other users to buy and sell them. The liquidity providers receive a percentage of the trading fees in return.
Uniswap underwent an unsuccessful hacking attempt in April 2020 and its website was temporarily suspended, but they are back now with reinforced security measures.
What is Ethereum?
Ethereum is an open-source, decentralized platform that runs on blockchain technology. It has smart contract functionality and is highly compatible with digital money and global payments.
Role of UNI
UNI is the native cryptocurrency and governance token of Uniswap. UNI owners are allowed to vote on possible changes to the protocol. A team of developers carry out the changes once the decision is made. Early users of Uniswap received UNI coins. In fact, all the Ethereum addresses that used Uniswap before September 1, 2020 were allowed to claim 400 UNI tokens.
In October 2020, the market capitalization for the UNI token was more than $500 million. Uniswap was deemed the largest decentralized exchange on the basis of its daily trading volume.
Price and Cost Analysis
Uniswap has been on the rise this past week. In the last 7 days, the price of Uniswap has increased by 0.97%, which is a good sign. The price has also shown a 1.40% jump in the last 24 hours. Uniswap hit its all-time high of $44.92 in May 2021 and its all-time low was over a year back.
The current circulating supply is 519,857,388 UNI. Since the fluctuations have been limited in Uniswap’s value in recent times, now might be a good time to invest in Uniswap — but it is difficult to make guaranteed predictions about the price.
Uniswap has placed itself firmly as one of the best decentralized token exchange platforms available. If Ethereum is your platform of choice, then Uniswap will have plenty of benefits for you. However, it is always better to do your own research before taking the final step in matters of cryptocurrency.