Buy Uniswap (UNI)
What is Uniswap (UNI)?
UNI is a Uniswap project token (ERC-20 standard) that determines the holder's right to participate in project management. The number of user votes depends on the number of UNIs the user owns. The token is released in autumn 2020.
To fully understand the role of the UNI token in the Uniswap project and its prospects, it is worth taking a closer look at what Uniswap is.
Uniswap is a decentralised liquidity protocol based on the Ethereum platform, a set of open-source intelligent contracts to form liquidity pools and exchange ERC-20 tokens, eliminating intermediaries, order books, censorship, and verification.
Liquidity pools are provided by liquidity providers (more than 72,000 today) - users who transfer their assets in the form of pairs of tokens of equivalent value to the pool for a fee. This mechanism solves the liquidity problem because traders do not have to wait for a counteroffer to appear in the market, as in traditional DEX.
How does it work?
Uniswap is essentially an automated Ethereum-based market-maker based on the constant product formula, i.e. DEX, which applies a mathematical formula to determine the price of an asset.
The price of tokens on Uniswap is determined by the formula x * y = k, where x and y are the balance of tokens in the pair and k (invariant) is always a stable value. Accordingly, if a certain number of x-tokens are redeemed, their price in y-tokens increases to maintain a stable k-value.
The Uniswap ecosystem consists mainly of 3 types of participants:
- Liquidity providers.
- Developers (who use the Uniswap functions to invent new Defi tools).
If you are considering buying Uniswap, it is worth looking at the traders - one of the prominent participants in the Uniswap system.
Traders buy tokens on Uniswap by paying a specific commission divided between the liquidity providers as remuneration in proportion to their participation in the overall pool.
Categories of traders:
- Users of dApps - buy tokens on Uniswap for use in other applications on Ethereum.
- Speculators - apply various tools and ecosystem products to exchange tokens using liquidity derived from the Uniswap protocol.
- Arbitrage Bots - profit by comparing prices and trading on different platforms; help level out token prices in the market.
- Smart contracts - execute trades on the Uniswap protocol, implementing swap functionality, such as DEX aggregators.
The activity of traders contributes to price accuracy, as through arbitrage, prices in pairs more accurately match market prices and encourage liquidity. So if you want to invest in Uniswap, you see it as a promising cryptocurrency.
Where does Uniswap come from?
History of the project
Would you like to buy UNI? Then you need to know a little about the creation of the token. It's a must for having credibility rather than blindly relying on luck.
Uniswap's creator, Hayden Adams, a former Siemens engineer, became interested in developing smart contracts on Ethereum after quitting the company. He subsequently created and led Uniswap Labs (October 2017).
Adams himself cites Gnosis developer Alan Liu as the originator of the market maker formula.
Hayden started working as the market maker in 2017, received a grant from the Ethereum Foundation in the summer of 2018, and presented the Uniswap protocol on the Ethereum main net in November 2018.
In his blog, Adams describes his path, mentioning colleagues who helped him Karl Floersch, Pascal Van Hecke, Callil Capuozzo, Uciel Vilchis, Philip Daian, Dan Robinson, Andy Milenius and many others.
In 2019, the Uniswap project received additional funding. As a result, it introduced an improved variation of the Uniswap V2 protocol, opening the ability to interchange any ERC-20 token and apply oracles for more accurate quotes. In the first version, any pair contained ETH.
In September 2020, the project launched its own UNI token. According to the developers, the token cemented Uniswap's status as an autonomous, publicly owned, self-sufficient infrastructure. In doing so, the absence of external management is emphasised as a matter of principle.
The tokens give their holders the right to participate in the project management (discussed below).
In 2021, the community plans to allocate grants from the remuneration amounts to develop the project. In addition, as of mid-2021, a new iteration of Uniswap V3 is in the process of being implemented.
The conceptual innovations of Uniswap V3 are the introduction of a limit range order, a tiered fee structure, the use of NFT tokens, layer 2 to reduce network fees and much more.
What does owning UNI tokens get you?
- The right to participate in project management (the right to submit proposals and vote).
- Management of the community treasury (distribution of funds for project development).
- Management of commissions.
- The right to adjust the list of tokens.
- Disposal of liquidity tokens, etc.
How to use Uniswap tokens (UNI) in governance?
If you want to invest in Uniswap, naturally, you must know the application.
If a user wants to participate in managing a project, he must first delegate his voting rights to an address (including his own). Uniswap (UNI) coins are not blocked.
After delegating a vote, the user may vote for others' proposals or create their own.
It is possible to vote for or against a proposal. However, for a proposal to pass, it must achieve a quorum of 4% of all UNIs (40 million) voting in the affirmative within seven days. It will then remain in the timelock for two days until it is implemented.
Suppose a user wants to submit his proposal. In that case, he must have at least 1% (10 million UNI) of all UNI delegated to his address, place the bid in the Governor smart contract and maintain the required number of tokens for seven days of voting.
Strengths and weaknesses of the Uniswap project
- An alternative to traditional exchanges: the ability to trade from non-custodial wallets without registration or verification.
- Opportunities for passive income (but there is a risk of non-permanent loss).
- The project allows you to create and place new tokens on Uniswap virtually for free, with no censorship and no need for permission (there are risks of fraud).
- Low transaction fees for low-liquidity tokens.
- Developers claim that the project has successfully passed audits.
- The platform's non-custodial status ensures secure transactions, with no risk of hacking or abuse by the central governing body.
- Uniswap cryptocurrency (UNI) is listed on many exchanges.
- High Gas fees on the Ethereum network.
- Risk of non-permanent loss (risk of loss that the liquidity provider may incur when withdrawing it from the pool in the event of fluctuating token prices).
- Facilitated placement of tokens by fraudulent projects. So if you want to buy Uniswap, choose a reliable broker.
- The platform only supports Ethereum tokens.
How to buy and store Uniswap tokens in South Africa?
Uniswap (UNI) is in demand and traded on many major exchanges (Binance, Bithumb, OKEx, Huobi Global, Coinbase Exchange, Gate.io) in addition to Uniswap's exchange.
It can be bought for crypto (USDT, BTC, BUSD, BNB, ETH) and fiat (USD, EUR, KRW).
To buy and store a UNI token, you need to use the services of a reliable broker.
So, if you want to invest in Uniswap in South Africa, register on the platform's website. Registration is a quick and easy process. However, you are required to provide some information to help identify yourself.
If you want to buy Uniswap in South Africa but have no experience in trading, no problem. A demo account is a great way to gain trading experience without losing your own money.
If you are ready for real trading, then open a real account. To do so, make a minimum deposit into your account.
Uniswap cryptocurrency outlook and forecasts
In light of the Defi boom, a project that addresses liquidity issues more effectively than traditional DEXs has every chance of success.
Uniswap is the leading decentralised exchange in the Ethereum ecosystem and has the highest trading volume among decentralised exchanges and even occasionally surpasses Coinbase. However, problems with the project's governance, token economics and roadmap have been noted.
If the move to Uniswap V3 is successful, liquidity providers are expected to bear less risk and earn more from their assets. There is speculation that this could trigger another rise in the UNI token exchange rate. If you want to buy UNI, the chances of making money are apparent.
Uniswap is constantly evolving and expanding its functionality and management mechanisms.
Overall, Uniswap (UNI) coins are predicted to have a promising future. In the five-year outlook, the price of UNI cryptocurrency is expected to rise to $270. In addition, experts believe that the high capitalisation and liquidity allows UNI to be among the most "safe" investments.
It is worth remembering that any forecast is subjective. Therefore, when deciding whether or not to invest in a particular currency, you must carefully consider your strategy to minimise possible risks.
Read the news, develop your skills and expand your knowledge and luck will be on your side!