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Uniswap is a decentralized and automated liquidity protocol, which operates under the Ethereum network. This exchange enables exchanging ERC-20 tokens (including ETH), which eliminates the need of intermediaries and thus makes the trading process faster and more efficient.

Uniswap is a decentralized and automated exchange that makes it easy to exchange tokens

How Does Uniswap Work?

Uniswap is a set of liquidity pools built from the reserves of two ERC-20 tokens (including ETH). Each pool is linked to a smart contract, which is executed every time someone injects liquidity into the pool or makes a transaction or exchange through it. Anyone can become a liquidity provider for a pool, as long as one deposits the same amount (in value) of the two tokens that it houses. For example, if 1 ETH were valued at $100, someone could become a liquidity provider for the ETH-USDT pool, contributing 2 ETHs and $200.

Uniswap (UNI) Price

How much does an Uniswap token (UNI) cost? Currently, a 0.30% (commission per transaction) goes to those who inject liquidity into Uniswap pools. However, it is expected the providers will soon get 0.25% instead, while 0.05% will go Uniswap token (UNI) holders. Thus, if you lack crypto liquidity, you can choose to buy Uniswap (UNI).


How Does Liquidity Works?

Uniswap exchange pools receives liquidity at a market price. If, for instance, 1 ETH is valued at $100, liquidity providers must contribute $100 for each ETH in the ETH-USDT pool.

What Determines the Price of a Transaction?

The Uniswap token prices are determined by the liquidity of the pool where the transaction will take place and by the volume of such transaction. Going back to the previous example, if 1 ETH is at $100, you will have to put in a little more than $100 to get one ETH. That little more will go to the pool as commission to compensate for the loss of liquidity, as well as to reward the providers. Besides, as highlighted above, every time someone makes a transaction, Uniswap executes a smart contract, which requires Gas, for which you also have to pay. If you want to learn more about what Gas is, visit our What is Ethereum page.

Hardware Wallets for Uniswap (UNI)

We encourage you to use a hardware wallet (a physical crypto wallet) to keep your Uniswap (UNI) tokens safe. This is the safest option, not only because it is physical (which keeps the key away from the web), but also because, in addition, you are very unlikely to lose it, as it may easily happen to apaper wallet, which is just a piece of paper with the keys written on it. Therefore, you will never regret investing into a hardware wallet. We recommend you using Ledger and Trezor, both coming in two versions. For more information, please see our Hardware Wallets page.

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