Uniswap Protocol

Uniswap started as a project for Hayden Adams to practice his coding skills as his friend Karl Floersch advised him. Hayden had just been laid off from his job as a mechanical engineer. Karl advised him to come over to Ethereum and learn how to write smart contracts. Thank Goodness Hayden listened to his friend. We would not have heard about the exchange today.

Uniswap today is a growing protocol that is home to a lot of decentralized applications. Built on Ethereum and launched in 2018, it is made up of various smart contracts that enable liquidity to be provided to ERC-20 tokens, swap digital assets and create liquidity pools.

It is one of the largest decentralized exchanges on Ethereum since its inception with over $50 million daily in trading volume according to Nomics statistics.


To transition into a state of community and decentralization, The founders of Uniswap decided to make it into a DAO(Decentralized Autonomous Organisation) by airdropping 400 UNI tokens to users who have interacted with the protocol previously. Shortly after, the value of the token increased and the airdrop was worth over $1000.

UNI token is the governance token of Uniswap protocol. Every holder of the token has the power to make a proposal or decision on how things are being run.


Current price: $6.60

Total Supply: 1 Billion

Circulating supply: 753.8 million.

Market capitalization: $4,984,418,794

Trading Volume: $265,818,091


Before any decision affecting Uniswap Protocol is made, there has to be a sufficient number of people who support that same view as yours. This brings me to the first step in governance.

This is just a general brief of how decisions in Uniswap DAO are made.

Developments in Uniswap

There have been various upgrades since the launch of Uniswap protocol. Uniswap v1 was an exchange between Ether(ETH) and ERC-20 tokens. The price feeds in version 1 were not up to standard and were easily manipulated.

Version 2 came with more flexibility by allowing the conversion of ERC-20 tokens to any ERC-20 without converting to Ether (ETH) first. Flash swaps were also introduced, this allowed users to borrow ERC 20 tokens and repay with the exact token borrowed plus little interest. A new oracle making price feeds more decentralized was proposed and implemented.

Uniswap v3 was launched on the 5th of May, 2021 on Ethereum mainnet. It came with Specific features like concentrated liquidity and multiple fee tiers. Concentrated liquidity gives a user more control over price ranges. The crypto market is a volatile one so with concentrated liquidity LPs(Liquidity providers), it can thereby pick price levels they want their capital to be allocated to. Once price goes overboard, the algorithm notifies them. Multiple fee tiers provide liquidity providers with more options and reduce trading fees.


In recent news, Hayden Adams, founder of Uniswap announced a raise of $165 million led by Polychain Capital for the launch of Uniswap Foundation which will contribute to the development of decentralized solutions by offering grants to projects. This is a welcome development to the growth of blockchain technology and web 3 as a whole. With the massive growth Uniswap has experienced in 3 years. It’s gaining enough momentum to compete with major centralized exchanges.

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