How To Buy Uniswap (UNI)?

A common question you often see on social media from crypto beginners is “Where can I buy Uniswap?” Well, you’ll be happy to hear it is actually quite a simple and straightforward process. Thanks to its massive popularity, you can now buy Uniswap on most cryptocurrency exchanges, including Coinbase and Binance in 3 simple steps.

Step 1: Create an account on an exchange that supports Uniswap (UNI)

First, you will need to open an account on a cryptocurrency exchange that supports Uniswap (UNI).
We recommend the following based on functionality, reputation, security, support and fees:

In order to sign up, you will need to enter some basic information, such as your email address, password, full name and, in some cases, you might also be asked for a phone number or address.

Note: On specific exchanges, you might need to complete a Know Your Customer (KYC) procedure in order to be able to purchase cryptocurrency. This is most commonly the case with licensed and regulated exchanges.

Step 2: Deposit funds into your account

Many cryptocurrency exchanges will allow you to purchase Uniswap (UNI) with fiat currencies, such as EUR, USD, AUD and others. Furthermore, they will also provide you with multiple deposit methods through which you can fund your fiat account, such as credit and debit cards, ewallets or direct bank transfers.

Note: Some payment methods will have higher fees than others, such as credit card payments. Before funding your fiat account on your chosen exchange, make sure to do your due diligence to find out the fees involved with each payment method to avoid unnecessary costs.

Step 3: Buy Uniswap (UNI)

This process is similar across almost every cryptocurrency exchange. All you have to do is find a navigation bar or a search bar, and search for Uniswap (UNI) or Uniswap (UNI) trading pairs. Look for the section that will allow you to buy Uniswap (UNI), and enter the amount of the cryptocurrency that you want to spend for Uniswap (UNI) or the amount of fiat currency that you want to spend towards buying Uniswap (UNI). The exchange will then calculate the equivalent amount of Uniswap (UNI) based on the current market rate.

Note: Make sure to always double-check your transaction details, such as the amount of Uniswap (UNI) you will be buying as well as the total cost of the purchase before you end up confirming the transaction. Furthermore, many cryptocurrency exchanges will offer you their own proprietary software wallet where you will be storing your cryptocurrencies; however, you can create your own individual software wallet, or purchase a hardware wallet for the highest level of protection.

For more in-depth instructions, our ‘Absolute Beginner’s Guide To Cryptocurrency Investing‘ will take you through the process step-by step. In addition to providing instructions for sending and receiving your cryptocurrency.
And if you’re completely new to crypto our beginner, intermediate and advanced level articles will get you up to speed with everything you need to know about the cryptocurrency space starting out. 

Uniswap is a collection of computer programs that enables decentralized token swaps. These programs are designed to run on the Ethereum blockchain. It is successful with the assistance of unicorns (as illustrated by their logo).

On Uniswap, traders are able to exchange Ethereum tokens without having to put their funds in the trust of any third party. In the meantime, anyone has the ability to lend their cryptocurrency to unique reserves known as liquidity pools. They are able to generate fees in return for contributing funds to these pools.

How exactly do these enchanted unicorns change one type of token into another? What are the prerequisites for using Uniswap? Onward with the reading!

The Ethereum blockchain serves as the foundation for the decentralized exchange protocol known as Uniswap. To be more specific, it is a protocol for the automated management of liquidity. Making trades does not require the use of an order book or any other kind of centralized party. Users are able to conduct business directly with one another through Uniswap, which features a high level of decentralization as well as resistance to censorship.

Uniswap is a piece of software that is open-source. You are free to investigate it on your own via the Uniswap GitHub.

Okay, but how do transactions take place if there isn’t an order book? Uniswap, on the other hand, utilizes a model in which liquidity providers are responsible for the creation of liquidity pools. This system gives users access to a decentralized pricing mechanism that, in essence, makes the order book depth more consistent. We’ll go into more depth about how it operates in just a moment. For the time being, it is important to keep in mind that users can effortlessly trade between ERC-20 tokens even in the absence of an order book.

As a result of the decentralized nature of the Uniswap protocol, there is no listing process. Practically any ERC-20 token can be distributed as soon as it is released, provided that there is a liquidity pool that can be accessed by traders. As a direct consequence of this, Uniswap does not impose any listing fees on its users. The Uniswap protocol can be thought of as a form of public good in some respects.

In 2018, Hayden Adams was the one who came up with the idea for the Uniswap protocol. However, Vitalik Buterin, one of the co-founders of Ethereum, was the first person to describe the underlying technology that inspired its implementation. As a consequence of this, the Uniswap platform was developed on top of the Ethereum blockchain. This allows it to be compatible with all ERC-20 tokens and infrastructure, such as MetaMask and MyEtherWallet.

Uniswap is also completely open source, which means that anyone can copy the code and use it to build their own decentralized exchanges. This enables Uniswap to be used as a foundation for the development of new decentralized markets. It even gives users the ability to list their tokens on the exchange for free. This distinction is notable given that typical centralized exchanges are motivated by profit and demand exorbitant listing fees from new coins because of this. Unlike centralized exchanges, which require traders to give up control of their private keys so that orders can be logged on an internal database rather than executed on a blockchain, which is more time consuming and expensive, Uniswap users have complete control over their funds at all times. This is made possible by the fact that Uniswap is a decentralized exchange (DEX). By retaining control of private keys, it removes the possibility of suffering a loss of assets in the event that the exchange is ever hacked.

How does Uniswap work?

Uniswap departs from the conventional architecture of digital exchange in the sense that it does not utilize an order book. It operates on the basis of a design known as the Constant Product Market Maker, which is a subtype of a model known as the Automated Market Maker (AMM).

This automated market maker system is used by Uniswap rather than an order book system, which is one in which the price of each asset is determined by the highest buyer and the lowest seller. Utilizing a mathematical equation that has been around for a very long time, this alternative method for adjusting the price of an asset based on supply and demand is very accurate. The price of a coin is adjusted up or down, respectively, depending on the total number of coins in each pool.

This is how the system works.

When someone adds a new ERC-20 token to Uniswap, they are required to deposit a certain amount of their chosen ERC-20 token in addition to an equal amount of another ERC-20 token in order to kickstart the liquidity pool. This is an important point to keep in mind.

Traders can engage in transactions against automated market makers, which are essentially smart contracts that hold liquidity reserves (or liquidity pools). Liquidity providers are the ones who put up the money for these reserves. A liquidity provider can be anyone who contributes to the pool with an amount that is equivalent to the value of two tokens. In exchange, traders contribute a fee to the pool, which is then divided up and given to liquidity providers in proportion to the amount of money each contributes. Let’s get into the nitty gritty of how this operates in more detail.

When liquidity providers deposit an amount that is equal to the value of two tokens, they create a market. These can either be ETH and an ERC-20 token or two ERC-20 tokens each. Both options are valid. The majority of the coins in these pools are stablecoins like DAI, USDC, or USDT; however, this is not a prerequisite in any way. In exchange for their services, liquidity providers are awarded “liquidity tokens,” which stand for a proportional portion of the total liquidity pool. These liquidity tokens can be redeemed for the share of the pool that they are supposed to represent.

Let’s take a look at the liquidity pool for ETH/USDT, shall we? We’ll refer to the Ethereum component of the pool as x, and the Bitcoin component as y. In order to determine the total liquidity available in the pool, Uniswap multiplies the two amounts it has just described. Let’s call this k for now. The principle that underpins Uniswap is that it is imperative that the value of k be held fixed at all times; this ensures that the total amount of liquid assets in the pool is unchanging.

So, the formula for total liquidity in the pool is:

x * y = k

How is token price determined on a decentralized exchange such as Uniswap?

How to use Uniswap

To begin using Uniswap, you will first need to ensure that you have an ERC-20 compatible wallet installed on your computer. Some examples of such wallets include MetaMask, WalletConnect, the Coinbase wallet, Portis, and Fortmatic.

After you have obtained one of these wallets, you will be required to deposit ether into it in order to trade on Uniswap and pay for gas, which is the name given to the fees associated with Ethereum transactions. There is a correlation between the number of people using the network at any given time and the fluctuating cost of gasoline. When it comes to making a payment using the Ethereum blockchain, the majority of wallet services that are compatible with ERC-20 give you three options: slow, medium, or fast. The most cost-effective choice is to go with the slow option, while the fastest and most expensive choice is to go with the fast option. The speed with which miners on the Ethereum network process your transaction is determined by this.

• Head to https://uniswap.org
• Click “Use Uniswap” in the top right-hand corner.
• Go to “Connect wallet” in the top right-hand corner and select the wallet you have.
• Log into your wallet and allow it to connect to Uniswap.
• On the screen it will give you an option to swap tokens directly using the drop-down options next to the “from” and “to” sections.
• Select which token you’d like to swap, enter the amount and click “swap.”
• A preview window of the transaction will appear and you will need to confirm the transaction on your ERC-20 wallet.
• Wait for the transaction to be added to the Ethereum blockchain. You can check its progress by copying and pasting the transaction ID into https://etherscan.io/. The transaction ID will be available in your wallet by finding the transaction in your sent transaction history.

What is Uniswap V2 and V3?

Even though Uniswap was released in November 2018, the protocol didn’t start gaining significant traction until just recently.

The new version of Uniswap, which was released in May of 2020, featured a significant upgrade that enabled direct ERC20 to ERC20 swaps and did away with Wrapped Ether (WETH) whenever it was feasible to do so. Support for incompatible ERC20 tokens like OmiseGo (OMG) and Tether (USDT) was added to Uniswap V2 along with a slew of other technical enhancements that make it more appealing to users. Uniswap V2 is now available for download.

Uniswap’s popularity increased in 2020 along with that of liquidity mining and yield farming platforms. This is due to the fact that many DeFi platforms enable Uniswap liquidity providers to earn an additional return on their LP tokens through the use of the platform.

This, in addition to the fact that 0.3 percent of exchange fees are given to liquidity providers, and the popularity of the platform as a launchpad for popular DeFi project tokens, has propelled Uniswap to the top of the rankings of DeFi platforms according to total value locked (TVL). TVL is a measure of the total value of crypto assets that are locked up on the platform.

The most recent version of the DEX, which was released in May 2021 and was Uniswap V3, included a number of brand-new features and was available to users at that time. The first kind of liquidity is called concentrated liquidity, and it enables providers of liquidity to allot it within a certain price range. As a consequence of this, traders do not need to put up as much capital risk in order to accomplish the same goals.

V3 also includes the introduction of new fee tiers, which give traders the ability to more accurately assess their level of risk when trading volatile assets (which can fluctuate in price between the time a trade is initiated and executed). Oracles that are “easier and less expensive” are a part of this system as well, and they ensure that the price data on the DEX is always accurate.

Finally (and perhaps most importantly), it generates non-fungible tokens (NFTs) from LP positions, transforming them into “on-chain generated art.”

Uniswap Development Updates in 2023

Uniswap, one of the leading decentralized exchanges (DEX), has made significant developments in 2023. The key highlights are:

• Uniswap v4 Launch: Uniswap Labs announced Uniswap v4, introducing various updates aimed at enhancing the protocol’s efficiency and user experience. The new version introduces innovative features such as “hooks” – contracts that execute at different stages of a pool action’s lifecycle, enabling greater customization and adding new functionalities. This update marks a shift towards a more community-driven development process as the team has released the draft code for public scrutiny and feedback​​​​.

• Architectural Changes and Gas Savings: Uniswap v4 proposes a significant architectural change where all pools will reside within a single “singleton” contract, differing from the previous model where each pool had its own contract. This change is expected to result in gas savings, although the actual savings will depend on the new architecture’s efficiency and real-world performance. Additionally, the version reintroduces support for native ETH and allows pool creators to set or customize fee tiers​​.

• Flash Accounting System: The new version also introduces a “flash accounting” system, which is designed to transfer assets based on net balances, potentially leading to more gas savings. This system, combined with the proposed “transient storage” enabled by EIP-1153, is expected to make transactions more efficient​​.

• Record Trading Volume: In 2023, Uniswap recorded an all-time high trading volume of over $100 billion in October, demonstrating its significant market share within the DEX sphere and outpacing many centralized exchanges like Coinbase. This highlights the growing user preference for decentralized platforms​​.

• Rising Development Activity: Uniswap has seen a surge in development activity, which is a positive indicator of the platform’s continuous improvement and enhancement. High development activity suggests new features, optimizations, or overall improvements in Uniswap’s functionality, potentially attracting more users and developers and strengthening its position in the DeFi sector​​.

These updates reflect Uniswap’s ongoing efforts to innovate and adapt to the evolving needs of the decentralized finance space, contributing to its sustained success and prominence in the market.

Official website: https://uniswap.org/

Best cryptocurrency wallet for Uniswap (UNI)

There are plenty of different crypto wallets available. The best one for you depends on your general trading habits and which provides the most security in your situation. There are two main types of wallets: hot storage wallets (digital) and cold storage or hardware wallets (physical). Both have their pros and cons, and there is not necessarily a right or wrong answer when it comes to figuring out which crypto wallet is best for you.

HOW DO I DECIDE WHICH cryptocurrency WALLET TO USE for Uniswap (UNI)?

Deciding which type of wallet to use depends on a variety of factors, including:

• How often you trade. In general, hot wallets are better for more active cryptocurrency traders. Quick login ability means you are only a few clicks and taps away from buying and selling crypto. Cold wallets are better suited for those looking to make less frequent trades. 
• What you want to trade. As mentioned earlier, not all wallets support all types of cryptocurrencies. However, some of the best crypto wallets have the power to trade hundreds of different currencies, providing more of a one-size-fits-all experience.
• Your peace of mind. For those worried about hacking, having a physical cold wallet stored in a safe deposit box at the bank or somewhere at home, provides the safest, most secure option. Others might be confident in their ability to keep their hot wallets secure.
• How much it costs. It is important to investigate the costs associated with each wallet. Many hot wallets will be free to set up. Meanwhile, cold wallets, like any piece of hardware, will cost money to purchase.
• What it can do. While the basics of each cryptocurrency wallet are the same, additional features can help set them apart. This is especially true of hot wallets, many of which come with advanced reporting features, insights into the crypto market, the ability to convert cryptocurrencies and more. Security features can also be a good differentiator.

For a more in-depth overview of cryptocurrency wallets visit our “Cryptocurrency Wallets Explained” guide.

If you’re going to be dealing in larger volumes of crypto, investing in cold storage might prove advantageous.
Most widespead examples of this being the Ledger Nano and the Trezor.

Ledger manufactures cold storage wallets designed for users who want increased security. Their wallets are a physical device that connects to your computer. Only when the device is connected can you send your cryptocurrency from it. Ledger offers a variety of products, such as the Ledger Nano S and the Ledger Nano X (a bluetooth connected hardware wallet).

Trezor is a pioneering hardware wallet company. The combination of world-class security with an intuitive interface and compatibility with other desktop wallets, makes it ideal for beginners and experts alike. The company has gained a lot of the Bitcoin community’s respect over the years. Trezor offers two main models – The Trezor One and Trezor Model T (which has a built in touch screen).

• Market Capitalization And Daily Trading Volume
• Current Market Price Of Every Cryptocurrency Relative To USD (And Some Local Currencies)
• Circulating And Total Supply
• Historical Charts With Prices Relative To USD, Bitcoin (BTC), And Ethereum (ETH).