Uniswap Trading – Tutorial and Brokers
Uniswap is a crypto token with the ticker symbol UNI. In this article, we’ve explained what the coin is, how it relates to the Uniswap exchange, and the risks and potential rewards in trading the token. This review aims to give you all the information you need to join the UNI community, including strategies and a how-to guide for getting started trading Uniswap.
Uniswap Brokers & Exchanges
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1
eToro USAInvest $100 and get $10https://www.daytrading.com/ is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$10$10SEC, FINRAStocks, Options, ETFs, CryptoeToro Trading Platform & CopyTraderACH Transfer, Debit Card, PayPal, Wire TransferUSD -
2
OANDA USCFDs are not available to residents in the United States.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)OANDA Trade, MT4, TradingView, AutoChartistWire Transfer, Visa, Mastercard, Debit Card, ACH TransferUSD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD -
3
DNA Markets
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$1000.01 Lots1:500ASICCFDs, Forex, Indices, Commodities, Stocks, CryptoMT4, MT5Credit Card, Debit Card, Wire Transfer, BPAY, Skrill, Neteller, Bitcoin Payments, Bitwallet, AstroPay, MastercardUSD, EUR, GBP, CAD, AUD, NZD, SGD -
4
IGForex trading involves risk. Losses can exceed deposits.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:30 (Retail), 1:250 (Pro)FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOBCFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread BettingWeb, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentralPayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit CardUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD -
5
Pocket Option50% Deposit Bonus
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$50$1MISABinary Options, Currencies, Commodities, Stocks, Indices, CryptosWeb, MT4, MT5Wire Transfer, Credit Card, Bitcoin Payments, Volet, Perfect Money, Visa, Mastercard, Debit Card, WebMoney, FasaPay, Ethereum Payments, Maestro, JetonCashUSD -
6
CEX.IO
$20$1GFSCCryptosTradingViewDebit Card, Credit Card, Wire Transfer, Swift, Skrill, Visa, Mastercard, PayPal, Neteller, Apple Pay, Google Wallet, Bitcoin PaymentsUSD, EUR, GBP -
7
UpholdTerms Apply. Cryptoassets are highly volatile. Your capital is at risk.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$0$1CryptosDesktop Platform, Mobile AppWire Transfer, ACH Transfer, Bitcoin Payments, Debit Card, Credit Card, Mastercard, Visa, Ethereum PaymentsUSD, EUR, GBP -
8
Videforex20% to 200% Deposit Bonus
$250$0.011:500Binary Options, CFDs, Forex, Indices, Commodities, CryptoTradingViewSkrill, Perfect Money, Bitcoin Payments, Neteller, Credit Card, Visa, Mastercard, Ethereum PaymentsUSD, EUR, GBP, AUD, RUB -
9
InstaTrade
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$10.011:1000BVI FSCFISP, CFDs, Forex, Stocks, Indices, Commodities, Cryptos, FuturesInstaTrade Gear, MT4Visa, Mastercard, Wire Transfer, Credit Card, Debit Card, Bitcoin Payments, Ethereum PaymentsUSD, EUR, RUB -
10
RevolutRevolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Securities products and services provided by Revolut Securities Inc, member FINRA/SIPC. Securities products are not insured by the FDIC or any federal government agency, are not bank deposits, are not obligations of or guaranteed by Metropolitan Commercial Bank and are subject to investment risks, including possible loss of the principal amount invested.
$0$1FINRA, SECStocks, CryptosOwnWire Transfer, Debit Card, Credit Card, Apple Pay, Google Wallet, Visa, MastercardUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, NOK, DKK, CHF, HKD, PLN, CZK, HUF
This is why we think these brokers are the best in this category:
- eToro USA - eToro US offers 24 tradeable cryptoassets, with just a 1% buying/selling fee added to the spread. Additionally, there are 80 different coins available through the broker’s proprietary wallet service. You can also practice your crypto strategies easily by switching between live and demo mode. Crypto asset investing is highly volatile and unregulated. No consumer protection. Tax on profits may apply.
- OANDA US - Cryptocurrency trading is offered via Paxos, a separate entity from Oanda. You can speculate on the world’s biggest cryptos by market cap. Commissions are lower than many peers starting at 0.25%. Through the broker’s partnership with Paxos, clients can spot trade cryptocurrencies on the itBit exchange through the OANDA native platform.
- DNA Markets - You can trade a strong range of 120+ cryptos 24/7, surpassing alternatives like Vantage with its 40+ tokens. That said, the spread from 170 on Bitcoin is significantly higher than the cheapest crypto brokers.
- IG - IG's modest selection of 11 crypto CFDs trails top crypto brokers like Vantage which offers 40+ tokens. That said, it stands out with its crypto index, which tracks the value of the top 10 digital currencies by market cap and provides a holistic way to speculate on the value of the crypto market.
- Pocket Option - Pocket Option offers a modest crypto offering with 10+ digital currencies including Bitcoin and 65+ tokens if you deposit $1000. The integrated analytics feature in the platform is helpful for finding opportunities, while the daily signals service makes it straightforward to act on short-term crypto opportunities.
- CEX.IO - CEX.IO offers hundreds of popular cryptocurrencies including big names like Bitcoin, Ethereum and Litecoin. The trading platform is well-designed with sophisticated charting and analysis tools, including 50+ in-built indicators. Traders can also reduce their monthly volumes through the tiered pricing structure.
- Uphold - You can buy and sell 250+ crypto assets with fiat currencies or in crypto pairs using the straightforward mobile app or through Uphold's browser-based account homepage. This is significantly more than many rivals. You can also earn up to 16% APY by staking one or more out of 32 valid tokens, or send tokens to an external wallet.
- Videforex - Traders can speculate on crypto prices in pairs with USD and CNY through binary options and CFDs. The range of digital currencies is fairly narrow vs alternatives but major tokens like Bitcoin are available.
- InstaTrade - InstaTrade offers a modest selection of around 12 cryptos against the USD, tradable via CFDs. Fees are low, especially for major assets like BTC/USD with spreads from 0. There's also a dedicated cryptocurrency blog with useful technical insights to support short-term trading decisions.
- Revolut - Invest in 100+ crypto tokens using 30+ fiat currencies. You can buy, sell and transfer cryptos on the iOS and Android app. We like that traders can also choose to round up leftover cash from card transactions in crypto and use their crypto balance to make card payments.
eToro USA
"eToro remains a top pick for traders looking for leading social investing and copy trading services. With a low deposit, zero commissions and an intuitive platform, the broker will meet the needs of newer day traders."
eToro USA Quick Facts
| Bonus Offer | Invest $100 and get $10 |
|---|---|
| Coins | BTC, ETH, BCH, DASH, LTC, ETC, MIOTA, XLM, EOS, NEO, ZEC, XTZ, MKR, COMP, LINK, UNI, YFI, DOGE, AAVE, ALGO, MANA, ENJ, BAT, MATIC, FLR, SHIBxM |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | BTC 0.75% |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | eToro Trading Platform & CopyTrader |
| Minimum Deposit | $10 |
| Regulator | SEC, FINRA |
| Account Currencies | USD |
Pros
- The broker's Academy offers comprehensive learning materials for beginners to advanced-level investors
- Investors can access Smart Portfolios for a more hands-off approach, covering a range of sectors and markets such as renewable energy and artificial intelligence
- The online broker offers an intuitive social investment network with straightforward copy trading on cryptos
Cons
- The proprietary terminal doesn't support trading bots and there are no additional stock market analysis tools
- Average fees may cut into the profit margins of day traders
- There's no MetaTrader 4 platform integration for traders who are accustomed to using third-party charting tools
OANDA US
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
OANDA US Quick Facts
| Coins | BTC, ETH, LTC, BCH, PAXG, LINK, UNI, AAVE |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | $100 |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | OANDA Trade, MT4, TradingView, AutoChartist |
| Minimum Deposit | $0 |
| Regulator | NFA, CFTC |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD |
Pros
- There's a strong selection of 68 currency pairs for dedicated short-term forex traders
- The broker offers a transparent pricing structure with no hidden charges
- Day traders can enjoy fast and reliable order execution
Cons
- It's a shame that customer support is not available on weekends
- There's only a small range of payment methods available, with no e-wallets supported
- The range of day trading markets is limited to forex and cryptos only
DNA Markets
"DNA Markets is an excellent choice for short-term traders familiar with the MetaTrader platforms. The smooth sign-up process also makes it easy to get started while the $100 minimum deposit is accessible. That said, DNA Markets trails the top brokers in education, research and mobile trading. "
DNA Markets Quick Facts
| Coins | BTC, ETH, LTC, XRP, 1INCH, AAVE, ADA, AGIX, ALCX, ALGO, ALPHA, APE, APT, ARB, ASTR, ATOM, AUDIO, AVAX, AXS, BADGER, BAND, BAT, BCH, BLUR, BNB, BNT, BTTC, CAKE, CELO, CFX, CHR, CHZ, CLV, COMP, CREAM, CRV, DENT, DODO, DOGE, DOT and many more |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | $28 (Bitcoin) |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | MT4, MT5 |
| Minimum Deposit | $100 |
| Regulator | ASIC |
| Account Currencies | USD, EUR, GBP, CAD, AUD, NZD, SGD |
Pros
- You can access low trading fees with spreads from 0.0 pips in the Raw account and zero non-trading fees
- After a recent upgrade, there are now over 800 assets available to trade via CFDs, with a particularly impressive range of 120+ cryptos
- The broker provides 24/5 customer support with response times of <2 minutes during testing
Cons
- Unlike many alternatives, there are limited educational and research tools for traders seeking an all-in-one solution
- Although it continues to strengthen its client base and reputation, DNA Markets lacks the track record of top brokers like Vantage
- Despite access to MT4 and MT5, there is no proprietary trading app for seamless account management whilst on the go
IG
"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."
Christian Harris, Reviewer
IG Quick Facts
| Coins | BTC, BCH, LTC, ETH, ADA, DOT, DOGE, LINK, UNI, XLM |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Variable |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral |
| Minimum Deposit | $0 |
| Regulator | FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD |
Pros
- The ProRealTime advanced charting platform is free as long as certain modest monthly trading activity requirements are met
- The proprietary web-based platform continues to caters to traders of all levels, with advanced charting tools and real-time market data useful for day trading
- IG is amongst the best in terms of its range of instruments, which includes stocks, forex, indices, commodities, and cryptocurrencies, providing ample diversification opportunities
Cons
- IG has discontinued its swap-free account, reducing its appeal to Islamic traders
- IG applies an inactivity fee of $12 per month after 2 years, deterring casual investors
- Stock and CFD spreads still trail the cheapest brokers like CMC Markets based on tests
Pocket Option
"Pocket Option excels for its easy-to-use web platform which provides a best-in-class user experience for short-term binary traders. The $50 minimum deposit is also accessible for beginners while opening an account is really easy. Looking at the negatives, Pocket Option still trails alternatives in its market offering and regulatory credentials."
Pocket Option Quick Facts
| Bonus Offer | 50% Deposit Bonus |
|---|---|
| Coins | BTC, ETH, BCH, LINK, AAVE, ALGO, TLM, ALPP, ANT, AVAX, AXS, BNB, ADA, CHZ, COMP, ATOM, DASH, MANA, DGB, DOGE, ENJ, EOS, FIL, GLMR, ILV, ICP, KAVA, LTC, MKR, MASK, MIOTA, XMR, ALICE, NEAR, NEO, NULS, OMG, DOT, MATIC, QTUM and many more |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | N/A |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Web, MT4, MT5 |
| Minimum Deposit | $50 |
| Regulator | MISA |
| Account Currencies | USD |
Pros
- Extremely fast and smooth sign-up process that takes less than 2 minutes
- The range of payment methods beats the majority of rivals, providing fast, secure and convenient deposits for traders in most countries
- Well-funded traders who deposit $1000+ can qualify for a 2%+ payout boost, more tradable assets and exclusive perks
Cons
- You need to deposit $1000 to access the extended list of 250+ assets, otherwise just 130+ assets are available
- The MISA is a weak regulator with limited investor protection for retail traders
- The maximum binary contract length of 4 hours is restrictive for longer-term trading strategies. Alternatives like Videforex offer binaries up to 1 month
CEX.IO
"CEX.IO continues to serve a range of crypto investors looking to buy, sell, trade, hold and earn with low fees. The tiered pricing structure will appeal to active traders while rookie investors will enjoy the straightforward platform interface and excellent education."
CEX.IO Quick Facts
| Coins | ZRX, 1INCH, AAVE, BTC, BCH, ADA, LINK, COMP, ATOM, DAI, DOGE, ETH, GUSD, ICP, LTC, LRC, MATIC, MKR, DOT, SHIB, SOL, XLM, SUSHI, SNX, USDT, XTZ, USDC, UNI, WBTC, ZIL |
|---|---|
| Crypto Mining | Yes |
| Auto Market Maker | No |
| Crypto Spread | 0.15% maker & 0.25% taker (Standard) |
| Crypto Lending | Yes |
| Crypto Staking | Yes |
| Platforms | TradingView |
| Minimum Deposit | $20 |
| Regulator | GFSC |
| Account Currencies | USD, EUR, GBP |
Pros
- CEX.IO has remained a trusted crypto exchange since its launch, with 5+ million users
- CEX.IO continues to offer competitive pricing with 0.01% taker and 0% maker fees for high-volume traders
- High quality educational materials are available through the University feature
Cons
- Deposit and withdrawal fees are relatively high, including 0.3% + $25 for SWIFT withdrawals
- The broker has limited regulatory oversight
- It's a shame that there's no demo account for traders looking to practice strategies
Uphold
"Uphold remains a top choice for crypto investors looking for a one-stop-shop solution to accessing the markets. There are over 250 tokens to buy, sell and trade through flexible platform options."
Uphold Quick Facts
| Coins | BTC, BTCO, AAVE, ALCX, DYDX, INH, XYO, API3, GHST, LSK, AUDIO, GLMR, NMR, CAKE, GODS, REQ, CHR, TRB, DAO, ROOK, XRP, ETH, BAT, ADA, ALGO, ATOM, AVAX, AXS, BCH, BAL, BTG, CSPR, COMP, CRV, DASH, DCR, DGB, DOGE, DOT, EGLD and many more |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Up to 1.5% |
| Crypto Lending | No |
| Crypto Staking | Yes |
| Platforms | Desktop Platform, Mobile App |
| Minimum Deposit | $0 |
| Account Currencies | USD, EUR, GBP |
Pros
- Uphold is 100% reserved which helps to protect client funds
- Fees are competitive based on tests, with 26 underlying platforms helping to source the best prices
- Over 250 cryptos are available including major tokens like Bitcoin and Ethereum
Cons
- There is a 2.49% fee if you want to use debit or credit cards
- Customer service is slow based on tests, with limited contact options
- Uphold operates with limited regulatory oversight
Videforex
"Newer traders will find a lot to enjoy about trading binary options on Videforex's easy-to-use proprietary platform, as well as the broker's copy trading solution. Payouts also remain higher than most alternatives climbing to 98%."
Videforex Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| Coins | BTC, ETH, QUANT, UNI, SOL, BNB, DOGE, XRP, XMR, MATIC, USDT |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Floating |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | TradingView |
| Minimum Deposit | $250 |
| Account Currencies | USD, EUR, GBP, AUD, RUB |
Pros
- Global clients can make free and fast transfers via a wide range of payment types, from credit cards to cryptocurrencies
- Videforex regularly runs trading contests, offering great practice opportunities and cash prizes to beginners and experienced traders
- Traders can earn up to 98% payouts on 100+ assets with the broker’s binary options, which is in line with competing brands like IQCent
Cons
- US clients aren’t accepted due to legal restrictions
- The broker isn’t overseen by a trusted regulatory agency
- No MetaTrader 4 integration
InstaTrade
"Although InstaTrade offers active trading on a comprehensive platform, it stands out with its fairly unique Fixed Income Structured Product (FISP), providing passive investment opportunities with up to 50% returns in 6 months if conditions are met. "
InstaTrade Quick Facts
| Coins | BTC, ETH, XRP, LTC, SOL, UNI, DOGE, BCH, FIL, ADA, DOT, LINK |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | InstaTrade Gear, MT4 |
| Minimum Deposit | $1 |
| Regulator | BVI FSC |
| Account Currencies | USD, EUR, RUB |
Pros
- VPS hosting caters to algo trading strategies with a dedicated physical server providing rapid execution speeds as low as 9 milliseconds.
- Despite an average investment offering of around 300 assets, InstaTrade offers a particularly strong suite of currency pairs, catering to advanced traders seeking opportunities in volatile exotics.
- InstaTrade delivers an excellent suite of charting tools for day traders with its web trader comprising 250+ indicators, 11 chart types and a user-friendly design.
Cons
- InstaTrade sports one of the most cluttered websites and client cabinets in the industry, potentially overwhelming new traders, especially compared to XTB’s intuitive trading journey and resources.
- Profits are only guaranteed in the FISP if investors do not reach the 50% profit level and attract other users with a total sum of $4 for each dollar in compensation.
- InstaTrade is registered in the offshore jurisdiction of the British Virgin Islands, resulting in limited regulatory safeguards for retail investors.
Revolut
"Revolut is suitable for casual stock traders looking for an easy-to-use app with transparent fees and a low minimum investment."
Revolut Quick Facts
| Coins | ZRX, 1INCH, AAVE, ALGO, AMP, ANKR, BNT, BAND, BAT, BTC, BCH, ADA, CTSI, CELO, LINK, CHL, COMP, ATOM, CRV, MANA, DOGE, ENJ, EOS, ETH, FIL, RLC, ICP, KEEP, KNC, LTC, LRC, MATIC, MIR, NKN, NU, NMR, OMG, OXT, OGN, DOT and many more |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | 2.5% commission for standard profiles |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Own |
| Minimum Deposit | $0 |
| Regulator | FINRA, SEC |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, NOK, DKK, CHF, HKD, PLN, CZK, HUF |
Pros
- Straightforward joining process
- No inactivity charge
- No commissions or custody fees on stocks
Cons
- Relatively narrow product range
- No advanced trading platform
- No margin trading
What Is Uniswap (UNI)?
Uniswap (UNI) is a top ten cryptocurrency with a market cap of nearly $20bn. It is an Ethereum blockchain token that powers the Uniswap Exchange, a decentralised liquidity provider (or a DEX as they are sometimes known). The Uniswap token is a governance token. This means it allows holders to vote on development work and decisions such as new fee structures.
Unlike cryptos such as Bitcoin and Dogecoin, Uniswap does not use an order book to match buyers and sellers or determine the token price. Instead, holders of Uniswap create market liquidity by adding their coins to a liquidity pool (LP).
Whenever liquidity is added, new liquidity tokens are minted that represent the value of the coin deposited. This allows Uniswap to be bought and sold by other traders while the owner holds onto the liquidity token. When any transaction occurs with the lent out Uniswap, the liquidity pool receives 0.3% of the transaction in return for lending their holdings. This is distributed proportionately among the pool. This is a form of decentralised finance (or DeFi), allowing users to create their own market liquidity rather than relying on banking institutions.
Uniswap liquidity providing is similar to staking and mining in that holders lend their coins to pools in exchange for interest. However, there are fundamental differences in the aim. Mining and staking aim to validate the network whereas liquidity pools replace the requirement for an order book. Staking is fairly risk free, but LPs have the potential for impermanent loss.
History Of Uniswap
Uniswap was created in September 2020 to prevent exchange users from using rival DEXs such as SushiSwap. At its initial coin offering (ICO), Uniswap handed out 400 governance tokens to everyone who had ever used the platform. At the time, these tokens were worth around $1000, the current value is nearly $15,000. The price more than tripled in the first quarter of 2021, the height of the latest cryptocurrency bull run.
Uniswap’s founder, Hayden Adams started the company in 2018, having received the backing of various venture capital funds.
In April 2020, over $25m of cryptocurrency was stolen during a hack of the Uniswap exchange and Lendf.me (a DeFi lending platform). Uniswap was affected to a much lesser degree than Lendf.me, but the website was taken offline for a short time while developers fixed the vulnerability. In general, Uniswap is safe from hackers because of its decentralized nature. While centralized exchanges such as Coinbase look after the crypto-wallet on behalf of owners, Uniswap operates on a system of self-custody, meaning individuals hold their own crypto. This makes it much harder to hack on any large scale.
The 2020 Uniswap white paper set out the intentions for the Uniswap version 2 (v2) core contracts, in particular, the development of a hardened price oracle, flash swaps and the introduction of a protocol fee. In 2021, the version 3 (v3) whitepaper was released, introducing concentrated liquidity and multiple fee tiers allowing LPs to be compensated appropriately for risk.
Uniswap Trading Chart
Why Trade Uniswap?
There are many reasons why Uniswap is a good buy. Ultimately, investors should consider whether they believe the technology that underpins Uniswap will be the future.
- A good deal for liquidity providers – Uniswap is based on the emerging concept of DeFi (decentralized finance). This concept aims to revolutionize the finance industry, taking the power of credit from institutional banks and putting it into the hands of anyone with capital. By contributing to a liquidity pool, UNI holders lend their share to others and receive interest in return. This is likely to be a better return on investment than banks are offering.
- DEX growth – In March 2021, the daily trading volume of Uniswap reached $7 billion, having increased 450% in 24 hours. This was partly due to a brand new ERC-20 coin called Delta, which aims to reduce volatility issues in options trading. To buy Delta you have to use Uniswap, and so the DEX saw a huge jump in trading volume. Growth in the exchange means that the price of UNI is likely to hold its value, or rise.
- Future coin distribution – When UNI was created in 2020, users of the DEX received free UNI tokens in what is known as an airdrop. An airdrop is when crypto coins are distributed for free as a way of gaining attention for the token. Since this initial distribution, users have been speculating on when the next airdrop will be. Holders of UNI or ETH on the exchange could profit hugely. However, no further airdrops have been confirmed yet.
Risks Of Trading Uniswap
Investors should be aware that there are risks involved with trading on this relatively new asset.
- Extremely high gas fees – Uniswap’s liquidity pool system means that gas fees increase as Ethereum usage rises. Gas fees are paid by users to compensate for the energy usage required to complete a transaction on the Ether network. Currently, investors are finding that the price of gas fees, which can reach into the hundreds of dollars, are just too high. If this continues, it will impact the long term viability of the DeFi system Uniswap is built on, and therefore the value of the token itself.
- Risky tokens on the DEX – Anyone can create an ERC20 cryptocurrency on the Uniswap exchange and therefore new token listings, such as Hoge, Unistake and Ecomi, are added regularly. But, it’s vital that investors research an upcoming token thoroughly before investing. There has been news of fake versions of existing tokens popping up on Uniswap. Plus there’s no guarantee that a cryptocurrency will increase in value. If trust in the system fails, this could have an impact on the value of UNI.
- Uncertainty of price predictions – The Uniswap token saw growth of over 250% in the first quarter of 2021, causing optimism within the UNI community. Some coin commentators forecast that $100 is achievable by 2025. But investors should be cautious. Past performance is not an indication of future gain and there is no guarantee of ROI. Any price prediction should be fully researched and the risks taken into account.
Uniswap Trading Strategies
Arbitrage
Arbitrage is one of the best strategies to use with Uniswap because it utilises the automated market maker (AMM) system that bases coin prices on demand and supply within the pool. AMM means that there is often a difference in a coin price on Uniswap vs other centralized exchanges, such as Coinbase or Binance. Arbitrage involves taking advantage of this price discrepancy. For example, if Kraken is offering Bitcoin at $50,000 and Coinbase at $50,500, you can buy BTC on Kraken and sell on Coinbase, pocketing the difference. Arbitrage is a vital part of the AMM system on Uniswap, as traders will continue to buy until the price is in line with the market.
Flash Swaps
Whilst arbitrage is a strategy reserved for those with capital in their back pocket (not everyone has 1 BTC lying around), flash swaps allow traders to take advantage of the risk-free strategy without the capital. Traders can withdraw up to the full amount of their ERC-20 holdings in any token to arbitrage providing that after the transaction, they pay for the withdrawn ERC20 tokens with the corresponding pair tokens or return the withdrawn ERC20 tokens along with a small fee. Traders can optimistically withdraw their coins using a flash swap, purchase the coin on the other end of the pair through another exchange, and then pay Uniswap back the original amount that was borrowed, keeping what’s leftover for themselves. This strategy is fairly risk-free, profitable, and actively encouraged by Uniswap to keep the price in line with the market.
How To Start Trading Uniswap
Uniswap is available to trade with a number of brokers, including Gemini and Coinbase. You can also swap tokens for UNI directly on the Uniswap exchange. To do this, you’ll firstly need to sign up to an ERC-20 compatible wallet service, such as WalletConnect, MetaMask or Portis and make sure you load it with ETH. Then, create a Uniswap account and login. Since Uniswap is decentralised, there are no KYC (know your customer) identity checks.
Login to your wallet and allow it to connect to Uniswap.5. You’ll then be able to swap ‘from’ one token ‘to’ another. Uniswap will provide you with a non-negotiable quote. Confirm the transaction and wait for it to be added to the blockchain. You can track its progress using Etherscan. The Uniswap exchange app is also available on mobile on both iPhone and Android.
If you’ve been waiting for confirmation of the transaction for a while, you might need to adjust your allowed slippage in the settings to account for the fee taken in the swap. Alternatively, you may not have enough gas for the fee. Top up your wallet with Ether and try again. If your transaction keeps failing or something else is not working, help and support for your query is available through the Uniswap community on Reddit, Discord and Twitter. Users can also keep up-to-date with announcements via the Uniswap blog.
Final Word On Uniswap
Uniswap is one of the biggest cryptocurrencies by market cap and has seen a huge jump in value since its creation. As a governance token for the Uniswap exchange, its price is determined by the success of the DEX technology it is built on. Investors should consider whether they believe in the concept of decentralised finance before investing. However, all indications so far suggest that rerouting power from institutional banks into the hands of the people could be the future of finance.
FAQ
What Is Uniswap (UNI)?
Uniswap (UNI) is an ERC-20 token that powers the Uniswap exchange. It is a governance token, which allows holders to vote on major decisions regarding the future of the exchange.
How Do I Use Uniswap (UNI) To Vote?
To vote on Uniswap exchange governance, visit the ‘Vote’ page of the Uniswap website. Here you’ll see a list of proposals that you can vote on. Create an account on gov.uniswap.org to participate in discussions and debates around the votes. Any holder can cast a vote, but you’ll need a minimum of 1% supply to submit a proposal.
How Do I Buy Uniswap?
Uniswap is available to purchase from some of the largest cryptocurrency exchanges, including Binance and Gemini. However, it can also be obtained on the Uniswap exchange by loading your ERC-20 compatible wallet with ETH and then swapping to UNI.
Can I Make Money From Uniswap?
Yes, Uniswap is a decentralised exchange that does not use an order book to determine the price of assets. Instead, it uses liquidity pools. Users that add their assets to a liquidity pool can earn a transaction fee for lending their liquidity to the market. As long as the value of the crypto increases, this will translate into real-world earnings. However, users should understand the risks involved as impermanent loss can occur.
Is Uniswap A Popular Cryptocurrency?
Uniswap is a top ten cryptocurrency by market cap, with a current valuation of nearly $20 billion. As a result, it’s a hugely popular option in the crypto space.