If you’ve ever traded ERC-20 tokens, you’ve probably heard of Uniswap. Uniswap is a decentralized exchange (DEX) that allows investors to quickly and securely convert ERC-20 tokens or Ethereum into other projects on the Ethereum network. The Uniswap UNI token is a governance token that allows investors to vote on future project developments.
Crypto enthusiasts like Uniswap because it allows them to diversify their investments and gain exposure to crypto assets. To begin, learn how to purchase Uniswap.
What Is Uniswap?
Because Uniswap is a decentralized exchange (DEX), there is no single point of failure. The vast majority of exchanges, on the other hand, are centralized. When you buy and sell cryptocurrency on a platform like Coinbase, for example, you rely on Coinbase to complete your transactions as a middleman.
While this is convenient and allows for a quick exchange, it also means that you must pay any fees that the exchange decides to charge you, whether they are higher than market rates or not. This also means that if the exchange is hacked, your on-exchange wallet is vulnerable to a single point of failure.
If the exchange runs out of tokens, they may never be seen again. While most modern exchanges are quite secure, there are still numerous risks associated with holding cryptos on an exchange.
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Cryptocurrency assets are volatile in nature. Buy and trade at your own risk.
Trading with financial instruments carries high level of risks that is not suitable for all investors. Before making any investment decisions, you should seek advice from independent financial advisor to ensure you understand the risks involved.
Trading with financial instruments carries high level of risks that is not suitable for all investors. Before making any investment decisions, you should seek advice from independent financial advisor to ensure you understand the risks involved.
How Does Uniswap Work?
Uniswap’s decentralized exchange protocol enables investors and traders to quickly “swap” any ERC-20 token for another ERC-20 token or Ethereum. Because Uniswap is built on the same technology that powers the Ethereum network, its token (UNI) is an ERC-20 token that can be stored in virtually any Ethereum-compatible wallet. You can try out Uniswap via its app if you have Ethereum or another ERC-20 token in your wallet. It’s surprisingly easy.
The Uniswap system was developed in 2018. The UNI token functions as a governance protocol. This means that if you own UNI, you will have a say in future Uniswap treasury and network upgrade decisions. On September 16, 2020, the token was launched, and it has since risen to become the 13th largest cryptocurrency by total market capitalization.
The third version of Uniswap, Uniswap V3, was released in 2021 and proved to be one of the most significant achievements in the DeFI ecosystem. Its improved automated market maker (AMM) technology was exceptional.
The first wave of UNI was distributed via airdrop to network users who had participated in some way in the exchange. UNI can now be bought and sold in the same way that any other ERC-20 token can.
Where To Buy UNI
UNI is a widely available cryptocurrency that can be purchased on a variety of cryptocurrency exchanges. The following are some locations where you can exchange US dollars or other fiat currency for UNI:
- Coinbase
- Gemini
- Kraken
- eToro
Some exchanges list trading pairs, which are assets that can be traded for one another on an exchange. Here are a few exchanges that support USDT and UNI if you want to buy and sell UNI using Tether, a popular stablecoin:
- Binance.US
- Huobi Global
- KuCoin
How To Buy Uniswap
Step 1: Choose A Crypto Exchange For Uniswap
You don’t have an ERC-20 token to trade in for Uniswap? You can still buy and sell UNI on centralized exchanges, so don’t worry. A cryptocurrency exchange (also known as a “cryptocurrency broker”) gives you access to a trading platform where you can place buy and sell orders for cryptos. Following the placement of an order, your broker will execute it in accordance with your instructions, usually for a fee or commission. SoFi is an investment platform that accepts the Uniswap token as well as many other assets if you’re looking for a Uniswap token exchange. In addition, SoFi account holders will receive free bitcoin.
Step 2: Buy A Wallet
One of the most serious problems with centralized exchanges is that they provide a single point of failure for hackers, making theft easier. Binance, the world’s largest cryptocurrency exchange, was hacked in 2019, and thieves stole $40 million in Bitcoin from on-exchange wallets.
You can protect yourself and your investment by storing your tokens in a private wallet. A cryptocurrency wallet is a hardware or software device that stores your tokens while they are not in your exchange account. A hardware wallet will give you the greatest level of security. Consider using a software wallet if you want a free option.
Step 3: Buy Uniswap
You can fund your account by adding a payment method after you’ve chosen an exchange and purchased a wallet. Most accept a bank account or a debit card to purchase cryptocurrency, and some even accept credit cards.
While purchasing UNI with a credit card is possible, we strongly advise against it. This is due to the exorbitant credit card transaction fees on cryptocurrency exchanges. When you use a credit card to buy cryptocurrency, you are committing to a cash advance, which carries a higher interest rate than regular charges.
To purchase Uniswap, go to the exchange’s trading platform and enter the ticker symbol UNI. Enter the number of tokens or the amount of money you wish to invest.
Market and limit orders are usually available. Limit orders are processed only if the cryptocurrency reaches a price you specify, whereas market orders are processed immediately at the best available price.
Trading/Selling Your UNI
Your tokens will appear in your exchange wallet once you complete your order. You must now decide how to spend your tokens. If you believe the value of Uniswap will rise in the coming weeks, months, or years, you should transfer your tokens to an off-exchange wallet as soon as possible. This reduces the possibility of a hack and protects your investment.
If you believe your Uniswap tokens have more value in the context of short-term price movements, you may want to scalp or day trade them. This strategy will allow you to profit from a variety of short-term price movements by converting your UNI to a stablecoin when it is most advantageous for you and cashing out excess tokens as profits.
Is UNI A Good Investment?
Make sure you understand the risks before purchasing Uniswap. Cryptocurrencies are volatile, and your investment may become worthless in the future. One of the most serious potential issues is that regulators may try to crack down on DeFi in general, which could hurt Uniswap.
Despite the risk, there are several reasons to consider Uniswap as an investment. With 63.8% of the decentralized exchange market share at the time of writing, it has a commanding lead over the competition. That’s just with Ethereum’s issues. If Ethereum 2.0 is a success, Uniswap may be able to attract more users who were previously turned off by high fees.
For those who believe DeFi is the future, Uniswap makes sense as a cryptocurrency investment. If you do decide to buy any, remember that you can earn rewards by lending it to a liquidity pool.
