A beginner’s guide to Uniswap $UNI

What is Uniswap $UNI and what does it do?

Uniswap, represented by the symbol (UNI), is a cryptocurrency that allows users to trade cryptocurrencies directly without involving a centralized entity.

Uniswap characterizes its blockchain as a public good, which is open source, enabling anyone to access and contribute to its code. By utilizing smart contracts, Uniswap effectively mitigates liquidity challenges typical in centralized exchanges.

Users can engage with Uniswap's decentralized exchange in various ways, such as creating new markets for digital asset trading through smart contracts, swapping assets on existing markets, and earning rewards by providing liquidity.

How do you make money on Uniswap?

Earning passive income with Uniswap V3 liquidity pools is relatively simple. All you need to do is deposit an equal value of two tokens in a liquidity pool and set a price range for your liquidity provision.

Pros of using Uniswap

Uniswap eliminates the traditional order book model and introduces an automated market maker (AMM) protocol that allows users to trade with a smart contract called a liquidity pool. This approach provides open access to the market. Anyone can swap tokens, add tokens to a pool to earn fees, or list a token on Uniswap.

Cons of using Uniswap

The Uniswap cryptocurrency cons are: Liquidity providers on this platform are exposed to impermanent loss. It is a risk stemming from price volatility. This risk can be substantial, especially in volatile markets.

Conclusion:

Since its inception in 2018 by its founder Hayden Adam, Uniswap $UNI has seen tremendous growth in both user adoption and popularity, making it the largest Decentralized exchange (DEx) to use on the ethereum blockchain. The overall trend is bullish and the market sentiment for $UNI is at 73 (greed).

Note : While looking forward to a greater future for Uniswap $UNI and the crypto world in general, always remember to exercise caution since crypto markets can be highly volatile.