Steem crypto academy week 4 home work post for @gbenga

Hey there. This is prakhar pratap singh and today's post is against the Home work given by @gbenga for week 4.
Today's task is based on the ethereum blockchain.
So let's get started

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what is ethereum

So ethereum blockchain was founded in 2018. The problem with bitcoin blockchain that was also there at that time, was that it was very slow. The transaction was slow and there was also deficiency.
To tackle this problem in 2018 ethereum blockchain was founded.

It also has its own coin named ether which is a coin of ERC-20 token.

usefulness of ethereum

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Ethereum is very useful and popular as it allows it's user to built apps on its plateform and also enables user to write code too. These apps are decentralised apps or Dapps in nature. And automated transaction is one of the usefulness of these codes.

For example you want to exchange your coin and you estimate that you will get maximum gain at 3 am in the morning. Then rather than waking up till 3 am and disturbing your schedule, you can set automated transaction that will it's be executed at 3 am in the morning.

what is uniswap

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Now this ethereum blockchain ecosystem has many Dapps in it. And one of the most useful and popular app is uniswap app.

This app is very useful in swapping between all the coins listed in ERC-20

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So uniswap is a decentralised app on the ethereum blockchain. And it allows it's user to swap instantly between all the coins listed on ERC-20 token.

one of the most important feature of this app is that it's very easy to use and us Fully automated. In this app it eliminates all the features in which one can place order. This means in this app you don't have to ask for bid.
This app with its software instantly swap the coins.

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It is a very big currency project. And one of the biggest benefit of this is that it's fully open source.
This means anyone can copy it's code and can create its own exchange for coins.
And as it's decentralised this can't be managed against any user by anyone.

how Uniswap works

So unlike all other exchange plateform and trade plateform, it has smart contract with automated market maker often called as AMM.
These smart contract holds liquidity that trader can transact from. This liquidity is provided by liquidity provider. Liquidity provider can provide liquidity in two forms. Either in ERC- 20 or ETH form.

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Usually this liquidity pool or liquidity reserve is composed of stable coins. And mostly popular stave coins are Dai, USDT, and USDC

The basic concept of uniswap is that this reserve or this liquidity pool should be remain constant
And the formula for finding liquidity is the product of the two coins.

For example if the liquidity of a coin is a and the liquidity of other coin is b. And let The the liquidity pool is x then the total liquidity pool is :- x=ab*. And as per the concept of uniswap this x should be constant.

how Uniswap swap coins and how price are affected

As we discussed before, the concept of the uniswap is to remain the liquidity pool constant

So when j want to exchange my coin for another one. In order to keep the liquidity pool constant, the system sets the exchange rates such that, the liquidity pool remains constant.
If in liquidity pool, the portion of a coin is higher than the second coin, then the second coin rates will be higher than the first one's rate.
This formula decides the rates of coins.

For example I have 200 coin a and I want it to be exchanged with coin b.
And let's assume total liquidity before this exchange is 500000

So in order to keep the liquidity same, I will receive 83.33 coin b in exchange.

So the price ration between coin a and coin b is 2.400:1

These calculations are done by me inorder to find the price of coin b in the above example

what is uniswap UNI token.

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The native coin of uniswap is UNI and also this is the governance coin of this plateform.
This coin comes into play when the plateform is under development. So during this period, all its user are distributed UNI coins of amount of their investment.
So even when this plateform is under development, you can carry on your trading.

how to use uniswap

To use uniswap to swap your coins, follow the following steps

• at first, go to this link
And this will take you to the main page of uniswap

^{and the interface will be like this on your mobile screen}

•• after that click on use uniswap option that will be shown there.

••• after that, this page will take you to the page where you will be shown options to swap

•••• being a new user, you will have to connect your wallet to this.
Select wallet connect option. And then you can connect your wallet from outside

Here you will find many wallet that can be connected to this.

And after this, a QR code will be shown and after scanning this with a compatible wallet, your wallet will be connected to the uniswap

••••• after selecting your coins, means which coin you want to swap with whom. Select bith coins.
And then click swap and your work will be done.

So you can see how easy it was
So use of uniswap that is based on ethereum blockchain** has made the coin exchange very simple and very easy to use.

So that's all guys. Thank you for reading my this post regarding ethereum blockchain and uniswap.

Hope you all will find it good and full of knowledge..

Cc
@steemcurator01
@steemcurator02
@gbenga