UNISWAP - TOP PROJECT ON THE ETHEREUM BLOCKCHAIN
INTRODUCTION
Unlike traditional applications like Facebook and twitter which are regulated and whose activities are controlled by an organization or central entity, blockchain technology seeks to eliminate the central authority and give user sole custody of the data, assets or information.
After the inception of bitcoin (the first major blockchain experiment), the blockchain technology saw massive growth and improvements including financial use cases, smart contract applications, proof of stake, proof of work, scaling, etc. They have also evolved into major organization and departments including entertainment, social engagement, healthcare, retail, etc.
Currently, some major operational blockchain platforms include; Ethereum, Cardano, EOS, ICON, TRON, Zilliqa, etc. These are giant platforms which are run by different network concensus.
The Ethereum Blockchain
This is the most actively used blockchain technology which is open-source and runs on smart contract applications, backed by the native cryptocurrency Ether (ETH). Since the platform is decentralized various individuals or groups are able to create their own experimental projects on the network. This is how top projects are started and gain massive momentum from there.
However, since it is an unsupervised space, it comes with a great disadvantage. The downside of this open source technology is the provision of free space for unscrupulous and bogus projects meant to dupe investors of their allocated funds.
Nevertheless, there have been several top projects that have evolved on the ethereum blockchain with time. Most of these major projects are based on decentralized finance, which expands financial use cases and provides options such as loans and derivatives. Typical example is the Uniswap project.
UNISWAP
Uniswap is a decentralized exchange platform that allows users to control their own funds as opposed to traditional exchange platforms that are governed by a central authority. Its platform uses the automated market maker to execute trades. As such, traders interact with its liquidity pools through ERC 20 coin swapping which is backed by smart contract execution.
Unlike traditional exchanges whose prices are mostly determined by the demand and supply coupled with other token factors, Uniswap uses AMM (Automated Market Maker) algorithms to set prices of various assets. Here, liquidity is generated by the investors themselves through resource coalition. This helps to execute various trades successfully.
With an all-time trading volume of over $108B+, 72K+ liquidity providers, 33M+ all-time trades and 200+ defi integrations, Uniswap is the second largest decentralized exchange.
https://uniswap.org/
Uniswap also has a 24hr trading volume of over $850m and about 1392 active markets, according to coinmarketcap.
https://coinmarketcap.com/rankings/exchanges/dex/
INTERFACE
To visit the exchange interface, you must first visit the official site: https://uniswap.org/ to access the exchange platform. You can use this app link to gain direct access to the site or click on the Use Uniswap feature on their official site.
Also, uniswap is equipped with useful tools and resources meant to assist traders and crypto investors to be able to maximize their earning potential. A space has been deliberately allocated at the top right hand side for this purpose.
UNISWAP PRODUCTS
Uniswap makes provision for a variety of products including the uniswap app, analytics, token lists, unisocks, sybill, and Unipig. These are all various sections of the uniswap platform which allows access to various aspects of the exchange site.
https://uniswap.org/
UNISWAP APP
The uniswap app can be accessed directly from the uniswap interface as seen above or you can also use this direct link to visit the app.
Once there, you would need to connect an external wallet to make transactions. This is because, it is a decentralized exchange and does not hold user's funds. Your private keys should therefore not be shared with anyone and must be in your custody at all times.
Any one of the following wallets can be connected to the uniswap exchange. Personally, I prefer the multi chain trust wallet (wallet connect). So I am going to make the tutorial based on wallet connect.
- Now scan the QR Code with your phone from your trust wallet.
- This is done by visiting the settings section and then selecting wallet connect.
- You can then scan and approve the connection from your wallet. This grants uniswap protocol access to your wallet and is therefore able to interact with it.
- Now that we have successfully connected our wallet, we can now buy erc 20 tokens by swapping using smart contracts through the ethereum network.
You can now swap tokens here
- Also, since new tokens are continuously being added here, they can also be found by inserting the contact address to easily locate these tokens.
Search for token or input contact address to easily locate them
Swapping of tokens come at a cost during smart contract execution. As such, one must make sure to allocate some amount of ETH to send and approve these contracts on the ethereum blockchain.
This is then sent to your wallet for approval and once the smart contract and gas fee is paid, funds are allocated to your wallet.
- Say I wanted to swap an amount of 100 StormX (STMX) tokens, I would have to search for STMX and select the preferred tokens I would like to receive in this case, USDt. The details of the transactions are determined by mathematical algorithms and are indicated beneath the trade.
Initiating swapping of erc 20 tokens
- The transaction is then sent to your wallet and will be approved once the corresponding transaction fees are paid.
Sample transaction for confirmation
Swapping is automatically done upon receiving transaction approval and the swapped tokens will be sent to the destination address.
OTHER ASPECTS
Other salient aspects of the uniswap platform can be accessed through: https://info.uniswap.org/home. Here, important details such as the total liquidity, available tokens, trading pairs, various accounts, trading volumes, etc can be accessed from here.
Analytics
Top Tokens
Top Pairs
Wallet Analytics
PROS AND CONS OF THE UNISWAP PROJECT
PROS
It is quite anonymous and does not require any KYC verification.
It is quite secure as funds are in your own private wallet.
Instant access to new and emerging tokens.
Less fess than most decentralized exchanges (0.3%).
Has over 1300 markets for traders to choose from.
Users have sole control of their accounts as private keys stay in their custody.
It has a mobile app for trading on the go.
CONS
Only ERC 20 tokens are supported here.
High gas fees during transaction confirmations.
Its open source nature makes room for scamming activity.
Uniswap also has a great community on several platforms where discussions are held by individuals concerning its operation and activities. You can find expert traders on this platform here who would assist you with most of its operation ;
Thank you for your attention.
I would appreciate your thoughtful contributions in the comment section as well. Thank you for your atttention.
Many thanks to the steemit team ( @steemcurator01 & @steemcurator02) for this initiative.
To the attention of professor @gbenga
Wow!!! you have really done a great job writing a long post. Well explained, I commend your effort in putting this together.
Rating 8
Thanks a lot for your valuable feedback prof.
Twitter Share : https://twitter.com/bananmuni/status/1367288979914129409?s=19
Nice write up brother. I've used uniswap on trust wallet. The charges to swap token is high. Apart from the high charges on ETH, uniswap is a nice project.
Brilliant writeup