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
About OANDA US
OANDA is a popular brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features. The top-rated brand has over 25 years of experience and is regulated by trusted agencies, including the NFA/CFTC. Around the clock support is available for short-term traders, alongside flexible contract sizes and automated trade executions.
Pros
- The broker offers a transparent pricing structure with no hidden charges
- The proprietary OANDA web platform continues to deliver a highly competitive charting environment, including 65+ technical indicators powered by TradingView
- OANDA is a reliable, trustworthy and secure brand with authorization from tier-one regulators including the CFTC
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
#2 - 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
About Pepperstone
Established in Australia in 2010, Pepperstone is a top-rated forex and CFD broker with over 400,000 clients worldwide. It offers access to 1,300+ instruments on leading platforms MT4, MT5, cTrader and TradingView, maintaining low, transparent fees. Pepperstone is also regulated by trusted authorities like the FCA, ASIC, and CySEC, ensuring a secure environment for day traders at all levels.
Pros
- Now offering spread betting through TradingView, Pepperstone provides a seamless, tax-efficient trading experience with advanced analysis tools.
- Award-winning customer support is available via telephone, email or live chat with response times of <5 minutes during testing.
- Pepperstone boasts impressive execution speeds, averaging around 30ms, facilitating fast order processing and execution that’s ideal for day trading.
Cons
- Pepperstone does not support cTrader Copy, a popular copy trading feature built into the excellent cTrader platform and available at alternatives like IC Markets.
- Despite enhancements to its range of markets, crypto offerings are relatively limited compared to other brokers such as eToro, with no option to invest in real coins.
- Pepperstone’s demo accounts are active for only 30 days, which may not be not long enough to familiarize yourself with the different platforms and test trading strategies.
#3 - 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
About IC Markets
IC Markets is a globally recognized forex and CFD broker known for its excellent pricing, comprehensive range of trading instruments, and premium trading technology. Founded in 2007 and headquartered in Australia, the brokerage is regulated by the ASIC, CySEC and FSA, and has attracted more than 180,000 clients from over 200 countries.
Pros
- You have access to over 2,250 CFDs across various markets, including forex, commodities, indices, stocks, bonds, and cryptocurrencies, allowing for diversified trading strategies.
- With ultra-fast execution speeds averaging 35 milliseconds and deep liquidity, IC Markets provides an optimal trading environment for scalpers, hedgers, and algorithmic traders.
- IC Markets offers fast and dependable 24/5 support based on firsthand experience, particularly when it comes to accounts and funding issues.
Cons
- There are fees for certain withdrawal methods, including a $20 wire charge, which can eat into profits, especially for frequent withdrawals.
- Interest isn't paid on unused cash, an increasingly popular feature found at alternatives like Interactive Brokers.
- While IC Markets offers a selection of metals and cryptos for trading via CFDs, the range is not as extensive as brokers like eToro, limiting opportunities for traders interested in these asset classes.
#4 - 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
Pros
- With tight spreads from 0 pips, low commission fees, and high leverage up to 1:500 for certain clients, Eightcap provides cost-effective and flexible trading conditions that can accommodate an array of strategies, including day trading and scalping.
- Eightcap stands out with a selection of powerful trading tools, including MT4 and MT5, the innovative algorithmic trading platform Capitalise.ai, and more recently the 50-million strong social trading network TradingView.
- Having excelled across all key areas for day traders, Eightcap outperformed more than 490 competitors to win our 'Best Overall Broker' award for 2024, also securing our 'Best Crypto Broker' title.
Cons
- Despite a useful library of educational guides and e-books, Eightcap still trails IG’s comprehensive toolkit for aspiring traders with its dedicated IG Academy app and 18 course categories.
- In spite of an increasing variety of tools, Eightcap doesn't offer industry favorites like Autochartist or Trading Central, which offer cutting-edge charting analytics, live news, and market insights for short-term traders.
- Eightcap needs to continue bolstering its suite of instruments to match category leaders like Blackbull Markets with its 26,000+ assets, featuring a particularly weak selection of commodities.
#5 - 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 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
About Exness
Exness is a Cyprus-based forex and CFD brokerage established in 2008. With over 260,000 clients, several awards and reputable licensing, the broker has maintained its position as a highly respected global brand. Active day traders can access the popular MT4 and MT5 platforms, raw spreads and multiple account types.
Pros
- Exness is the first brokerage to pass the $1 trillion and $2 trillion marks in monthly trading volumes
- Unlike many other brands, Exness doesn't charge any account maintenance or inactivity fees
- Top-tier licensing with the FCA and CySEC and a strong reputation with over 10 years in business
Cons
- Unlike most competitors, Exness doesn't provide its own education section
- There are several regional restrictions for retail traders including the USA, Europe and the UK
- There are no promotional deals or loyalty schemes for high-volume day traders
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.