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

#1 - OANDA US

Why We Chose OANDA US

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.

"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."

- DayTrading Review Team
  • 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

#2 - Exness

Why We Chose Exness

There is a small range of popular crypto tokens paired with fiat currencies available, with zero swap fees and no commissions in the Standard account. Trading is available via desktop or mobile apps, and deposits via crypto are also available in some countries. Exness has also lowered its spreads on Bitcoin, appealing to active traders.

"Exness remains an accessible broker for all experience levels, though experienced day traders will particularly appreciate the ultra-low commission rates, fast withdrawals and high-quality charting software."

- DayTrading Review Team
  • Coins: BTC, LTC, ETH, XRP, BCH, SOL, SNX, UNI, BAT, DOT, XTZ, ADA, BNB, ENJ, FIL, DOGE, COMP, THETA, AAVE, LINK, IOST, CAKE, MATIC, HT, MANA, HBAR, INCH
  • Crypto Mining: No
  • Auto Market Maker: No
  • Crypto Spread: Floating
  • Crypto Lending: No
  • Crypto Staking: No
  • Platforms: Exness Trade App, MT4, MT5, TradingCentral
  • Minimum Deposit: $10
  • Regulator: FSA, CySEC, FCA, FSCA, FSC, CBCS

#3 - Pepperstone

Why We Chose Pepperstone

Pepperstone continues to prove itself as one of the most trusted crypto brokers. Although its selection of digital tokens is average, you can trade popular cryptos like Bitcoin and altcoins like Ripple with up to 1:10 leverage, while its crypto indices provide a holistic view of the digital currency markets not found on most day trading platforms.

"Pepperstone stands out as a top choice for day trading, offering razor-sharp spreads, ultra-fast execution, and advanced charting platforms for experienced traders. New traders are also welcomed with no minimum deposit, extensive educational resources, and exceptional 24/7 support."

- DayTrading Review Team
  • Coins: BCH, BTC, ETH, LTC, DASH, ADA, LINK, DOGE, EOS, DOT, XRP, XLM, XTZ, UNI, BNB
  • Crypto Mining: No
  • Auto Market Maker: No
  • Crypto Spread: BTC 30, ETH 0
  • Crypto Lending: No
  • Crypto Staking: No
  • Platforms: MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
  • Minimum Deposit: $0
  • Regulator: FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB

#4 - IC Markets

Why We Chose IC Markets

IC Markets offers 20+ cryptocurrencies which are tradable via CFDs, including lesser-known tokens such as Avalanche, Kusama and Uniswap. Commission-free trading is available, and experienced crypto traders can access high leverage up to 1:200 in the MetaTrader platforms.

"IC Markets offers superior pricing, exceptionally fast execution and seamless deposits. The introduction of advanced charting platforms, notably TradingView, and the Raw Trader Plus account, ensures it remains a top choice for intermediate to advanced day traders."

- DayTrading Review Team
  • Coins: BTC, BCH, DOT, DSH, EMC, EOS, ETH, LNK, LTC, NMC, PPC, XLM, XRP, ADA, BNB, DOG, UNI, XTZ
  • Crypto Mining: No
  • Auto Market Maker: No
  • Crypto Spread: BTC 42.036
  • Crypto Lending: No
  • Crypto Staking: No
  • Platforms: MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade
  • Minimum Deposit: $200
  • Regulator: ASIC, CySEC, FSA

#5 - Eightcap

Why We Chose Eightcap

Eightcap’s crypto offering is best-in-class with 250+ crypto derivatives, surpassing that of almost every alternative. Testing also reveals Bitcoin spreads of 12 pips, coming in lower than most competitors, while it offers real-time trading ideas through the Crypto Crusher market scanner. Add in convenient deposits and withdrawals in digital currencies, and Eightcap offers the complete package for serious crypto traders.

"Eightcap delivers in every area for day traders with a growing selection of charting platforms and AI-powered tools. Now sporting 250+ crypto CFDs and the Crypto Crusher market scanner, it's also become a stand-out choice for crypto trading, winning our 'Best Crypto Broker' award two years in a row."

- DayTrading Review Team
  • Coins: BTC, ETH, LTC, BCH, XRP, XMR, DSH, EOS, XLM, ADA, TRX, DOGE, BNB, DOT, MATIC, VET, AXS, NEO, SOL, UNI, AAVE, KSM, THETA, CAKE, SUSHI, ATOM, XTZ, SNX, COMP, FLOW, EGLD, PUNDIX, RAY, ZIL, QTUM, BAND, OMG, FIDA, BADGER, NEAR and many more
  • Crypto Mining: No
  • Auto Market Maker: No
  • Crypto Spread: $12 (BTC)
  • Crypto Lending: No
  • Crypto Staking: No
  • Platforms: MT4, MT5, TradingView
  • Minimum Deposit: $100
  • Regulator: ASIC, FCA, xCySEC, SCB

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).

Uniswap crypto

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.

Uniswap history

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.

UNI breakdown
UNI price

Risks Of Trading Uniswap

Investors should be aware that there are risks involved with trading on this relatively new asset.

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.

How to trade with Uniswap
Wallet connect

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.

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.