What is Uniswap?Uniswap is the world's largest decentralized exchange (DEX), founded in 2018 by Hayden Adams. Its success is inseparable from the technical principles proposed by Vitalik Buterin, the founder of Ethereum. Uniswap is built on the Ethereum (ETH) network. Over time, Uniswap has been iteratively updated and launched multiple versions, each introducing new features and improvements.
What is UNI coin?
UNI is the native token of the Uniswap protocol and can also be regarded as its platform currency. UNI was launched in September 2020. It was not originally planned by Uniswap, but was forced to launch after competitor Sushiswap attracted users by airdropping SUSHI. UNI is designed not only as a platform currency, but also as a governance token. Holders can participate in liquidity mining, DAO governance, and obtain airdrops and other multiple rights and interests.
Supply and distribution of UNI coins: The total supply of UNI is unlimited, with an additional issuance of 2% every year. The initial supply is 1 billion coins, which have all been allocated. Among them, community users account for 60%. The following is the distribution of the initial supply of UNI:
| Allocation objects | Quantity | Proportion | | Team | 215 million | 21.51% | | Consultants | 069 million | 0.69% | | Investors | 178 million | 17.8% | | Community | 69% | 60% | Billion |
Comparison between Uniswap and centralized exchanges
There are significant differences in the operating mechanisms between Uniswap and centralized exchanges (such as Binance). Uniswap uses an automatic market maker protocol (AMM), which does not require an intermediary to match transactions. Users can trade directly through liquidity providers. Compared with centralized exchanges, Uniswap has advantages in the following aspects:
| Type | Decentralized | Centralized | |----------------|---------------------- |----------------------------| | Security| Rely on smart contracts and blockchain | Rely on platform technology and servers | | Cross-chain transactions | Mainly Ethereum | Supports multi-chain, cross-chain | | Community governance | UNI coin holders | BNB holders | | Liquidity providers | Any user | Institutions or investors designated by Binance | | Deposit and withdraw fiat currency | Not supported | Supported | | Control | User | Platform | | KYC verification | Not required | Required | | Currency | ERC-20 | Almost unlimited | | Token listing permission | Not required | Required |
This mechanism makes Uniswap superior in terms of privacy protection and user control.
Advantages and Disadvantages of UNI Coin
Advantages: High security: users do not need to perform KYC verification and privacy is protected.
Account control: Users have absolute control over their accounts, reducing the risk of the platform running away.
Liquidity mining: Users can receive rewards by providing liquidity.
Disadvantages: Legal currency transaction restrictions: Legal currency deposits and withdrawals are not supported.
Risk of counterfeit currency: Since no permission is required to list the currency, the problem of counterfeit currency may arise.
Higher handling fees: Compared with centralized exchanges, transaction fees are higher.
Slippage Issues: In times of market volatility, trading may be at risk of slippage.
UNI Coin Price Trend Analysis and Forecast: Since the UNI Coin was first listed in September 2020, the price has experienced violent fluctuations. Initially opening at $1.1, it quickly rose to $14. In May 2021, the price of UNI currency reached a historical peak of $45, but then fell back due to the overall market decline. At the end of 2022, the price of UNI currency fell to as low as $3. Although it rebounded after entering 2023, it still failed to break through the previous high.
At present, the price trend of UNI currency is showing a downward triangle, and the trading volume is shrinking, showing signs of bottoming. It is expected that in 2024, UNI currency may usher in new rising opportunities after experiencing a deep washout.
Investment value of UNI coins
According to CoinMarketCap, as of July 2023, the market value of UNI currency was US$3.4 billion, accounting for 0.28% of the total market value of virtual currencies. Among decentralized exchanges, UNI Coin ranks first, with a market share of nearly half of the total DEX trading volume. Regardless of market value or trading volume, UNI has performed well and demonstrated its potential as an investment target.
All in all, although UNI Coin has some shortcomings, as a representative of decentralized exchanges, combined with strong community support and governance mechanisms, it is still an investment choice worthy of attention. How the market trend will develop in the future deserves investors' continued attention.