Uniswap is the world’s largest decentralised exchange (DEX), enabling anyone to swap Ethereum-based tokens directly from their wallet without a centralised intermediary, KYC, or account registration. Launched in 2018 by Hayden Adams, Uniswap pioneered the Automated Market Maker (AMM) model — replacing traditional order books with algorithmic liquidity pools where the price of any asset is determined by a mathematical formula (x × y = k). This innovation made decentralised trading possible at scale and became the template for hundreds of copycat DEXs across every blockchain.
How Uniswap works: Liquidity Providers (LPs) deposit pairs of tokens (e.g. ETH/USDC) into pools and earn a share of trading fees (0.01%–1% depending on the pool tier). Traders swap tokens against these pools, paying the fee plus Ethereum gas. UNI token is Uniswap’s governance token — holders vote on protocol upgrades, fee structures, and treasury spending. Uniswap v3 (2021) introduced concentrated liquidity — allowing LPs to provide liquidity within specific price ranges for greater capital efficiency. Uniswap v4 (2024) introduced “Hooks” — allowing developers to customise pool behaviour with plugins, enabling features like limit orders and dynamic fees.
Uniswap processes billions in daily volume and has been deployed on Ethereum, Polygon, Arbitrum, Optimism, Base, and many other chains. It is the backbone of Ethereum’s DeFi ecosystem.
Example: A trader wants to swap 1 ETH for USDC without using an exchange. They connect MetaMask to Uniswap, enter the swap, and execute — the AMM calculates the rate automatically and the swap completes in one on-chain transaction.
Learn more: Uniswap — Documentation
