The Uniswap platform was built in 2018 on the Ethereum blockchain, the world’s second largest cryptocurrency by market capitalization.
Uniswap is a decentralized exchange, the users always maintain control of their funds at all times, if you are using a centralized exchange you will have to give up your control of the private keys so that orders can be logged on an internal database rather than to be executed on a blockchain. When using Uniswap you can use wallet services like MetaMask and MyEtherWallet that use ERC-20 tokens
Uniswap is the leading decentralized crypto exchange that is using the Ethereum blockchain, meaning it isn’t owned and operated by a single entity. It uses a new type of trading model called automated liquidity protocol.
At the time of writing Uniswap is currently the second-largest decentralized finance (DeFi) platform and has over $4 billion worth of Ethereum tokens are held in Uniswap liquidity pools.
— Uniswap Labs 🦄 (@Uniswap) March 31, 2021
Pros with Uniswap
Uniswap is not only an exchange but is a platform that wants to solve liquidity problems. It eliminates the issues which troubled the first decentralized exchanges. It is currently placed as the 8th most popular cryptocurrency according to CoinMarketCap trending around $30. Uniswap has a low flat exchange fee of 0,03% and is much cheaper than other options. There is also a profitable return on investment in the UNI token.
Cons with Uniswap
One of the biggest problems with Uniswap is that anyone can list a token on Uniswap, that means that scammers will try to trick you to send them assets in exchange.
Once you have done a transaction to a fake coin it is not irreversible.
Another problem is transactions failures, this is what can potential happen:
- Gas fee: You opted to pay a gas fee that was too low, and did not meet the requirements.
- Maximum Price: You want to pay the maximum price for an exchange to another token, unfortunately the price could change during the process and that could make the transaction fail.
- Insufficient Liquidity: The pool does not have funds to cover your transaction.
The majority of crypto traders use places such as Coinbase and Binance, there are others but these are the most used at the moment. These platforms are governed by the company that operates the exchange.
Image: Muhammad Umer Idrisi
*Disclaimer: Fyggex, does not give any guidance, advice or recommendations to neither invest or not in any available normal currency or digital currency directly or indirectly via any trading platform, exchange or provider. Our sole purpose is to make you aware of the related real or potential risks and opportunities so that you can make your own research prior to any financial decisions you may want to take. Past performance and position are not a guarantee of risk-free future returns.