TRON FAN CLUB| WHAT YOU NEED TO KNOW ABOUT UNISWAP DECENTRALIZED EXCHANGE|By gidsbrown

Image edited on Canva.

Good day my fellow steemians and every member of Tron fan club. Hope your day has been great. I've learnt alot from this community, basically on cryptocurrency and it has really been of great help to me in my cryptocurrency journey and it has broaden my knowledge on cryptocurrency in many ways in no small way. A very big Thank you to the creators of this very educative community.
I'm here to talk on a topic that has really fascinated me in no small way, cause I didn't understand it and how it works like 2years ago but through the help of a crypto mentor and personal research I've come to an ample knowledge about UNISWAP EXCHANGE and how it works, I've benefited so much and also had my challenges using it so I perceive this article will be of great help to the members of this great community.

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INTRODUCTION

Uniswap Decentralized exchanger is an advance topic that will require a prior knowledge to understand completely.

Uniswap is a decentralized exchange that permits anyone to trade ERC-20 Ethereum tokens without the use of a middleman and without permission. For us to understand this definition you have to understand how a traditional exchanger works.

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TRADITIONAL EXCHANGERS

Traditional exchangers like binance, Coinbase, Gemini,kraken,bitstamp are centralized meaning they are owned by a company that has computers that runs it, they are also regulated by KYC (Know Your Customer) laws which requires each new customer to provide an existence personal information including home addresses and like in Nigeria where driver's license, voter's card or national ID numbers or cards before given access to begin trading on the traditional exchange. In order to trade on the traditional exchange users need to deposit money on the exchange there by giving the exchange control over their funds. In a traditional exchange when a user wants to buy or sell a certain cryptocurrency they submit a "buy or sell" order, in which all of these orders are recorded in the exchange order book, when there is a match in the order the trade is conducted.
Having explained what a centralized exchange is, less talk about decentralized exchange.

DECENTRALIZED EXCHANGE

Decentralized exchanges also known as DEX when you remove the first two letters from DEcentralized and the X in eXchange which also sounds like Ex we get the acronym DEX, alright that's just how the name DEX was formed. DEX is a part of the DeFi ecosystem (means Decentralized Finance) is a term given to traditional financial services such as exchanges, lending services and insurance that has been decentralized.
DeFi is a movement that aims at making a new financial system that is open to everyone and doesn't require trusting intermediaries like heavily on cryptography, Blockchain and smart contracts, smart contracts which are are the main building blocks. Currently most or all the DeFi projects are built on Ethereum.

Since Dex is not controlled by anyone they can't be regulated, so that means they are open to everyone without permission. When using Dex there's no need to open an account or go through an identification process when you have to supply your personal information. Finally Dex allows users to trade directly from their own wallet, so no need to deposit funds there by allowing the user to keep full control of their funds.

Screen from phone metamask browser

INDEPTH KNOWLEDGE ON UNISWAP

Uniswap is a dex built on top of the Ethereum network infrastructure, it's a set of automated rules used for trading ERC-20 Ethereum tokens. Uniswap is the most popular decentralized application also known as DAPP on the Ethereum network platform which has hundreds of thousands of users trading with it each week. Uniswap is one of the most forked projects (meaning people uses its code to create additional applications).

UNISWAP VERSIONS

1. The First Version of UNISWAP started at November 2018 Trading of Ethereum to any ERC-20 tokens and back to ether. Whereby you first of all convert what so ever token you have to the value of that token in ether, then use the ether to buy any other ERC-20 token of your choice.

2. Version 2 of UNISWAP which was released on may 2020 added trading of any ERC-20 token to any ERC-20 token without first converting to ether.

3. In may 2021 Version 3 of UNISWAP was released in which it allowed a more efficient and effective use of capital to whoever decides to supply liquidity to UNISWAP. In other words you can squeeze more profit juice out of the money you deposited in the liquidity pool. Trading became more efficient lowering trading cost compared to version 2

Screenshot from phone metamask.

[source] (from phone metamask browser)

HOW TO USE UNISWAP

1 Download metamask

1. set your metamask account and secure your seed phrase.
2. Go to browser and type "uniswap.org"
3. Click on Connect wallet
4. Now you can start trading any ERC-20 token that is listed.
   Note that since there are many people trading on uniswap simultaneously the price showing when you place the trade order may be the different from the actual price when the trade is executed. This is called SLIPPAGE which is the difference between the expected price in which a buy place the order and the actual price the order is carried out. And you can be able to cap how much slippage you are willing to tolerate before cancelling your order to avoid too much loss. The reason for slippage is that every trade on uniswap is an Ethereum transaction and it can take sometime to broadcast the transaction and get it confirmed by the Ethereum network so by the time the transaction is confirmed the price may have already changed.
   Due to its decentralized non regulated UNISWAP supports many types ERC-20 tokens, so practically anyone can create their own token and list it on uniswap for free which has filled uniswap with a wide variety of tokens which has also given access to scammers to post scam coins, so just because a coin is listed on uniswap doesn't mean it is legit or have any in- built value compared to a traditional exchange that does extensive research on every coin on its platform, uniswap doesn't do that. So it's up to you to do your own extensive research before buying any coin.

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UNITOKEN

UNITOKEN is a coin that has gradually grown its way to the list of top cryptocurrencies.
In September of 2020 introduced the UNITOKEN through an airdrop, meaning each person who previously used uniswap received four hundred uniswap tokens for free. Even though the UNITOKEN has risen in value since then, it wasn't designed to serve as a currency it is actually a governance token allowing whoever holds it to influence and vote on future development decisions, the more tokens you hold the more voting power you have, the uniswap wanted to use that idea to fade out their involvement in uniswap and the management of the project to the token holders. It's quite surprising that a token that wasn't meant to have any value has risen in value and to the top of list of cryptocurrency. It seems it price represents how valuable people believe uniswap will be in the future and are therefore willing to be part of it's project. In cryptocurrency space it's not uncommon for coins which weren't made with the intention of being used as a financial asset to become very valuable.

CONCLUSION

With everything said so far, you get to know uniswap has its advantages in that it helps a user get a token very cheap before it gets listed on exchanges, which when listed can give you multiple times your invested funds, and disadvantages in that you can end up buying scam coins,shit coins or pump and dump coins, which is presently the scare presently, where some celebrities hype a particular coin and when people rush in and it pumps they dump it. Uniswap has been been receiving lawsuit threats for permitting that to happen, cause users feel they've been used and scammed. So that's why it's very expedient to make thorough research on a coin before investing into it, because uniswap is a Decentralized exchange it doesn't do that research like centralized exchange like binance,Gemini,Coinbase etc.

Thank you all for reading through. I hope you learnt a thing or two. Have a fruitful week.