Uniswap Review
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Uniswap is a decentralized cryptocurrency exchange (DEX) that allows users to trade cryptocurrency, as well as stake crypto into liquidity pools to earn rewards. Users can quickly connect their digital wallets and swap coins without needing to create an account or verify their identity. Uniswap is the most popular DEX on the market, with over several billion dollars traded daily. It offers a very simple interface to swap over 600 coins.
As an Ethereum-based DEX, Uniswap allows users to swap ERC-20 tokens which are used on the Ethereum network. Uniswap has recently added the ability to swap tokens on the Polygon blockchain as well the Optimism and Arbitrum bridges to help save on network gas fees. Uniswap offers an easy-to-use interface and a wide selection of cryptocurrencies, making it the most popular DEX available today.
This review will examine the best features on Uniswap including an assessment of its supported cryptocurrencies, fees, trading experience (on desktop and mobile) and security measures.
- Highest volume DEX on the market
- Reasonable trading fees (0.3%)
- Supports ERC-20 tokens
- No account creation of KYC needed
- Offers liquidity mining for rewards using pools
Uniswap is a decentralized cryptocurrency exchange that offers crypto trading directly from your digital wallet. Founded in 2016, Uniswap allows users to buy, sell, and trade options and futures contracts for both BTC and ETH. Uniswap also offers an advanced trading platform for seasoned traders, as well as institutional trading services for enterprise-level clients.
Uniswap is a decent exchange for both crypto newbies and veteran investors alike and features a discounted fee structure for higher-volume traders (as low as 0.00%).
What Is Uniswap?
Uniswap is one of the best decentralized crypto exchanges that allow users to swap crypto and provide liquidity to earn rewards. The Uniswap team is based in New York and the platform is available around the globe except for a few sanctioned countries.
Uniswap offers access to over 600 Ethereum-based cryptocurrencies to trade, along with a bridge to the Polygon network to trade Polygon-based crypto. Users can also swap tokens that are not listed with Uniswap, as long as they are on the Ethereum blockchain. In addition, users can provide liquidity to earn transaction fee rewards by depositing crypto into the Uniswap liquidity pools.
Uniswap website and trading statistics.Uniswap Overview
Uniswap is one of the most popular DEXs on the market, and a great place for experienced traders to explore trading directly on the blockchain. Uniswap is one of the most popular DEXs, regularly processing over $2 billion in daily volume on the platform. Uniswap is a crypto-only exchange, meaning that all trading happens between crypto trading pairs, such as DAI-ETH, and fiat currency is not available for trading.
Uniswap also facilitates trades from its liquidity pools that allow users to contribute to delegating their coins to earn rewards from processing fees. These pools are made up of crypto pairs (such as ETH-USDC) and contribute to the trading platform allowing users to transact without the need for a centralized liquidity source.
Uniswap does not offer many features in comparison to a traditional centralized exchange such as leverage trading, interest-bearing accounts, lending or an NFT marketplace. Uniswap is purpose-built to focus on crypto swaps and liquidity pools.
| Exchange Name | Uniswap |
|---|---|
| Fiat Currency | Not available |
| Cryptocurrency | 600+ |
| Deposit Method | Crypto only |
| Trading Fee | 0.3% + network fees (swap), network fees (liquidity pools) |
| Mobile App | No |
Uniswap Pros & Cons
Uniswap offers a huge selection of cryptocurrencies and a simple user interface for trading. There is plenty of liquidity available due to the user-generated liquidity pools which can generate interest by depositing crypto into a pool. On the downside, Uniswap doesn’t allow fiat currencies to buy crypto, and users new to crypto may get overwhelmed trying to use a digital wallet to make transactions.
- Simple user interface that will suit intermediate and experienced users
- Vast selection of cryptocurrencies with over 600 supported coins
- Earn passive rewards by providing liquidity in pools
- Low fees for most transactions (~0.3%)
- Digital wallet is required to trade with Uniswap
- Does not provide a fiat-to-crypto onramp
- Difficult to understand for new crypto traders
- No insurance for lost crypto or due to fraudulent activity
- No mobile trading app
How Does Uniswap Work?
Uniswap is a secure exchange that operates directly on the Ethereum blockchain for trading ERC-20 tokens. All transactions are cryptographically secured and independently validated on the blockchain. Uniswap does not take custody of cryptocurrency assets. Moreover, Uniswap does not provide an order book and therefore no transaction fee is paid to the platform.
Uniswap works using a model similar to an Automated Market Maker (AMM) that uses smart contracts to hold and manage liquidity pools. Users trade against the liquidity pools to swap ERC-20 tokens. Buyers and sellers can swap tokens against the token's pool or contribute their tokens to earn a 0.3% reward for providing liquidity.
Don't have a wallet? Here's our list of the best wallets for Ethereum.
Is Uniswap Safe To Use?
Uniswap is a decentralized platform that does not take custody of users cryptocurrency. All transactions are cryptographically secured and recorded on the public Ethereum blockchain. In short, Uniswap is safe to use as long as users fully understand how to use the platform and are diligent with ensuring the wallet address is correct each time.
That being said, DEXs are often targets for crypto scammers that create fraudulent tokens which can be swapped on the platform without any user protection. Some websites even spoof the Uniswap app which is why Uniswap periodically has a banner on the top of their page stating “make sure the address is Uniswap.org.” Fake Uniswap pages can steal the contents of a user’s wallet if they connect the wallet to the website.
Uniswap Top Features
Crypto Swaps
Uniswap is one of the original decentralized exchanges and quickly became the most popular with its simple trading interface for crypto swaps. Users can quickly launch the web-based app, connect a digital wallet and begin trading.
Users can swap Ethereum-based coins as well as use one of the bridges to swap tokens that use other protocols. With over 600+ tokens to choose from without account registration or KYC process, Uniswap is a great option to swap tokens anonymously on an easy-to-use platform. Moreover, Uniswap efficiently routes transactions to save in swap fees. Users can view the route to see where the transaction is routed and where the fees go.
Liquidity Farming To Earn Yield
Uniswap does not provide its liquidity for tokens but relies on users to join and delegate their assets to liquidity pools. Uniswap allows users to create their pools, which is typically a pairing of digital assets, such as USDC/ETH. Users deposit an equivalent amount of each coin and will earn transaction fees when their pool is used to process a transaction.
Users can also browse the top pools (by total value locked) and add liquidity to join the existing pool. Higher-volume pools will pay out more often, as the pool will process more transactions than smaller pools. But the fees may be slightly lower per transaction.
Flat Fee Structure
Uniswap offers a low flat fee of 0.3% per transaction on crypto swaps. This is competitive with the larger centralized exchanges and allows users to save money on transactions. That being said, depending on the network being used, the network fees may be much higher due to network activity. Ethereum is notorious for high gas fees during high market volatility.
To offer competitive swap fees, Uniswap allows users to exchange tokens on the Polygon network or use the Optimism of Arbitrum bridges. By partnering with these networks, Uniswap traders can lower excessive gas network fees during peak volatility.
Uniswap Verification
Uniswap does not have a Know Your Customer (KYC) verification process. Moreover, users can use the platform without signing up and creating an account due to the decentralized structure of the platform. A digital wallet that is compatible with the Ethereum network (e.g. Metamask wallet) and connected to the Uniswap web application is the only requirement to begin trading without KYC. For more information on the best non KYC crypto exchanges, read this article next.
Funding & Limits
Since Uniswap does not have user accounts and trading is performed using individual wallets connected to the platform. As such, there are no minimum or maximum limits on Uniswap transactions. However, large transactions on the Ethereum network may come with high gas fees, or outright fail if they take too long to fill. More importantly, orders can be limited by the amount of liquidity available within the pool.
Volume and Liquidity
Uniswap liquidity is provided by users who delegate funds to liquidity pools that are governed by smart contracts on the Ethereum network. The total liquidity depends on the assets in each pool, with Ethereum (ETH) and stablecoin (e.g. USDC, DAI) pools offering the most liquidity while the smaller projects and lower cap coins offer less liquidity.
Uniswap is one of the highest volume DEXs on the market with over $700,000,000 in daily volume at the time of writing. This makes it one of the most-used decentralized exchanges available with higher trading volumes than competitor's platforms such as PancakeSwap.
Uniswap trading volume and liquidity compared to other DEX's.Trading With Uniswap
Uniswap offers a simple trading experience for users with the ability to quickly swap one cryptocurrency for another. Users can also provide liquidity to earn transaction fees on an easy-to-use web application.
Trading Interface
The user interface on Uniswap is very simple with a basic order form to swap crypto assets. Traders must connect a digital wallet to the application (such as Metamask) and choose which assets to swap between. The wallet must hold at least one supported asset to trade such as Ethereum (ETH) or USD Coin. Holding Ethereum in the wallet is essential to cover the network “gas” fees.
The order form shows an estimated price for the swap and the estimated network fees. These numbers may vary from the actual price paid as crypto prices change from moment to moment. Once an order is placed, Uniswap will route the transaction as efficiently as possible. This helps save on gas fees, and speed up the transaction as well.
Swapping ETH to 1INCH on Uniswap.Liquidity Mining
Users can create their pool, or join an existing pool to begin earning a portion of the trading fees. To provide liquidity into a trading pair, there is a simple form to deposit crypto. An equal amount of each asset needs to be deposited to join the pool (such as ETH/USDC).
Each pool has a fee rate associated, which matches the transaction fees on Uniswap which is shown. Pools either have a 0.05% fee, 0.3% fee, or a 1% fee depending on the cryptocurrency deposited. When joining or leaving a pool, the trader must pay the gas fees to deposit or withdraw cryptocurrency. A screenshot of the order form to add liquidity is shown below.
Farming liquidity on Uniswap.Uniswap Fees
Uniswap offers low fees for crypto transactions and most of the fees go to the liquidity providers. The fee is a flat 0.05% - 1.0% per transaction that varies depending on the coins being swapped. The typical fee is around 0.3% for the common crypto pair. This is very competitive in the market and cheaper when compared to the likes of AscendEX which has similar features based on our review.
Since Uniswap is a decentralized exchange built on Ethereum, there are also network fees (known as “gas fees'') to process each transaction. These fees can be outrageously high, especially during times of high network congestion. Uniswap has built-in bridges (known as “roll-ups”) that allow traders select to help save on fees. Both the Optimism and Arbitrum gateways help lower the overall gas fees of a transaction.
Overall, the fees on Uniswap are quite competitive with many centralized exchanges. The gas fees can negate the low fees when trading pairs with poor liquidity which needs to be considered. Alternatively, using a centralized exchange with deep liquidity across its trading pairs could be a better alternative. For example, Binance offers a maximum trading fee of 0.1% per trade.
Uniswap Mobile (Web Interface)
While Uniswap does not offer a mobile app, users can still make trades on the go using the Uniswap web application on a mobile browser. The website is mobile optimized to connect a mobile digital wallet, place trades and provide liquidity, all from your phone.
This experience may be a bit more cumbersome and risky. However, once a wallet is connected, it is a fairly similar process to using the platform on the desktop to select which crypto to trade, and swap coins. The only difference is that users will need to approve the transaction in the mobile wallet application, as opposed to a web browser plugin. In short, the lack of a mobile app on Uniswap is a downside that can lead to human errors entering a wallet address.
Security of Assets
Uniswap does not take custody of any user assets. As a decentralized exchange, all assets are stored in a user’s digital wallet and Uniswap merely routes transactions. Liquidity pools are also decentralized, meaning that pools are built on the Ethereum blockchain and protected by cryptography and redundancy.
There is no insurance against lost assets and Uniswap is not responsible for lost cryptocurrency when interacting with the platform. This is one of the downsides of decentralization, as there is no legal entity to assist if a trader runs into issues of lost currency, theft or fraud.
Frequently Asked Questions
Uniswap is a decentralized exchange for buying and selling cryptocurrencies. Transactions are handled directly on the Ethereum blockchain, which is a permissionless and trustless platform that requires no account creation or user ID identification. Transactions are validated on the blockchain that are immutable, which is a hallmark of decentralization.
There are questions as to whether Uniswap Labs (who writes and publishes the Uniswap software) is truly decentralized but its governance model suggests the answer is “yes.” All proposals are routed through the Uniswap governance forum and voted on using UNI tokens for weighting.
Uniswap is not a wallet to store purchased digital assets. Users will need to connect their own Ethereum hot wallet or a hardware wallet before trading crypto on and of the platform. Uniswap supports a wide range of wallets including Metamask, Trust Wallet and Coinbase Wallet.
U.S. residents can use Uniswap to trade ERC-20 and provide liquidity. As an unregulated and decentralized exchange, Uniswap is available around the globe (with the exception of a few select countries that are geo-blocked).
Final Verdict
Uniswap is a well-balanced decentralized exchange (DEX) with a simple user interface, deep liquidity and a massive selection of ERC-20 cryptocurrencies to choose from. Users can quickly swap their favorite coins without needing to create an account. Those that want to earn some interest on crypto holdings can also provide liquidity to the DEX and benefit from earning a passive income while on the platform.
Uniswap (or any decentralized exchange) is not suitable for beginners to crypto. The platform requires a thorough understanding of digital wallets, the Ethereum blockchain and how to pay the gas fees on the network. An individual that has not purchased crypto before should start off using a centralized cryptocurrency exchange such as ByBit or Binance.
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