Uniswap decentralized exchange (DEX) is the most popular DEX built on the Ethereum blockchain. For users who are wondering “What is Uniswap?” In this article, this article provides an overview of what it is and how it works, as well as the many ways users can start using Uniswap DEX.

With Uniswap, users can exchange tokens without relying on an intermediary. The lack of need to rely on a third party results in virtually no financial leasing. Instead, Uniswap relies on smart contracts to complete transactions. Smart contracts are algorithms that are executed even when specific conditions are met.

How does Uniswap work?
Since Uniswap is an open source protocol, many DEXs have been released on the market with the “swap” suffix. These protocols are basically copies of the Uniswap source code. They differ in graphical user interface (GUI) as well as differentiation and positioning progression.

The most famous of these imitators – and the most controversial – is Sushiswap. After copying the source code, Uniswap set out to attack vampires. A vampire attack is when the DeFi protocol offers various incentives to liquidity providers. The vampire attack aims to divert liquidity from the target protocol.

How did Sushiswap achieve a successful vampire attack? The platform launched an intense marketing campaign. It also made it easier for Uniswap to convert liquidity providers. In the end, they offered an insanely lucrative bonus to make it worth the time spent.

Another less controversial example is Pancakeswap. This DEX runs on the Binance Smart Chain. Pancakeswap offers non-fungible tokens (NFTs) and selection opportunities that Uniswap do not.

However, Uniswap is the first DEX to build on the Automated Marketer Model (AMM), and reject the traditional open ledger model. The open ledger model is not very suitable for DEX, also due to liquidity issues. In contrast, the AMM model uses a liquidity pool with a fixed product market maker model and is thus based on a fixed product formula:

It is noteworthy that in version 1 or version 1 of Uniswap, the liquidity providers were at risk of losing the maximum earnings. In other words, version 1 is best viewed as the minimum viable product released for beta testing (or even alpha testing).

With each iteration, Uniswap has made great improvements to users. For example, version 2 introduced oracles and UNI tokens distributed over the air. UNI tokens are the governing token of Uniswap DEX. Uniswap users received these airdrop codes if they used the platform before September 2020.

For version 3, the most notable improvements came in the form of focused liquidity. This new form of liquidity allowed liquidity providers to set the terms under which they would receive their fees.

In addition, the third version of Uniswap has been released on the Optimistic Ethereum network. Optimism is a two-tiered scaling solution that is much better than the first layer of Ethereum. Key advantages include reduced slippage and higher gas costs, as well as near-instant transaction speeds.

So how do you buy coins on Uniswap? Before moving on to how to use Uniswap, it is important to answer the question: Is it safe to use Uniswap? Are Smart Contracts, Blockchain Technology, and Decentralized Finance (DeFi) Safe? These are the technologies Uniswap is built on.

The Ethereum blockchain is very secure, unless there are vulnerabilities that can be exploited. For example, Uniswap was abused in the past with a replay attack, but the bug has since been fixed (and made Uniswap stronger in the long run). Since then, liquidity and trading volume have only increased, which is important.

Now let’s see how people can use the platform.

How to use Uniswap?
There are many options available to users who want to know how to shop on Uniswap. This section explains how to use Uniswap with Mobile Wallet and Trust Wallet as well as Coinbase Wallet.

But first, the steps for using the Uniswap protocol are discussed with Metamask. This section then provides steps for two mobile-compatible approaches.

Remember that Metamask is mobile-friendly too. However, just like a web wallet that acts as a browser extension, the user interface is impeccable on the desktop, with little or no competition. That’s why this Metamask article discusses working with the desktop.

Source: CoinTelegraph