Uniswap Explanation

Can somebody explain me what is Uniswap ?


Uniswap is a protocol that allows buyers and sellers to swap ERC20 tokens without the use of an exchange or order book. Uniswap uses an algorithmic equation that automatically determines the swap rate based on the balances of both tokens and the actual demand for this swapping pair.


Simply I can say that it is Swapping platform


And it is a form of decentralized exchange (DEX)


Thanks for the explanations,

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What is Uniswap?

Uniswap is a protocol on Ethereum for swapping ERC20 tokens without the need for buyers and sellers to create demand. It does this via a equation that automatically sets and balances the value depending on how much demand there is.

Unlike most exchanges, which are designed to take fees, Uniswap is designed to function as a public good–a tool for the community trade tokens without platform fees or middlemen. Also unlike most exchanges, which match buyers and sellers to determine prices and execute trades, Uniswap uses a simple math equation and pools of tokens and ETH to do the same job.

Who Invented Uniswap?
Uniswap was created by Hayden Adams who was inspired to create the protocol by a post made by Ethereum founder Vitalik Buterin.

What’s so special about it?
Uniswap’s main distinction from other decentralized exchanges is the use of a pricing mechanism called the “Constant Product Market Maker Model.”

Any token can be added to Uniswap by funding it with an equivalent value of ETH and the ERC20 token being traded. For example, if you wanted to make an exchange for an altcoin called Poop Token, you would launch a new Uniswap smart contract for Poop Token and create a liquidity pool with–for example–$10 worth of Poop Token and $10 worth of ETH.

Where Uniswap differs is instead of connecting buyers and sellers to determine the price of Poop Token, Uniswap uses a constant equation: x * y = k.

In the equation, x and y represent the quantity of ETH and ERC20 tokens available in a liquidity pool and k is a constant value. This equation uses the balance between the ETH and ERC20 tokens–and supply and demand–to determine the price of a particular token. Whenever someone buys Poop Token with ETH, the supply of Poop Token decreases while the supply of ETH increases–the price of Poop Token goes up.

As a result, the price of tokens on Uniswap can only change if trades occur. Essentially what Uniswap is doing is balancing out the value of tokens, and the swapping of them based on how much people want to buy and sell them.


I will definitely try it, thanks for the information about uniswap


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