If you are interested to the previous posts of this series, check it out here:

• Bitcoin (BTC)

• Ethereum (ETH)

• Cardano (ADA)

• Binance Coin (BNB)

• Tether (USDT)

• XRP (XRP)

• Dogecoin (DOGE)

• USD Coin (USDC)

• Polkadot (DOT)

• Solana (SOL)

What is it?

Uniswap began as a project designed to offer two functions: first, to serve as a DEX within the Ethereum ecosystem. Second, to act as an automated liquidity protocol (automated market maker or AMM). The fact that Uniswap relies on Ethereum and its smart contacts to achieve this ensures that decentraliazion is required for its operation. It also integrates with the large number of ERC-20 tokens that exist In short, Uniswap is a completely autonomous system that follows only one thing: its own programming, transparent and immutable. The beginnings of the project are quite unique because it all started with a series of posts created by Vitalik Buterin in 2017. The first of them was on Reddit :), where Buterin envisioned the possibility of creating DEX on Ethereum. In fact, this first post was the trigger for several such projects. Later, in March 2018, Buterin once again showed off his knowledge in another post aimed at decentralized market makers. At this point Hayden adams has published your idea, showing what your first contract for Uniswap is. Since then, Uniswap has been an ever-evolving and developing project, which has led it to become one of the largest Ethereum DeFi systems today.

How does it work?

Uniswap focuses on two points: first, to provide a decentralized medium of exchange (DEX) to its users, and secondly, to provide a means to create an automated liquidity protocol (AMM). In the first case, Uniswap works exactly like the exchanges we usually use. That is, we ask for a change from one currency to another, and this change is done by the platform, in this case in a completely decentralized way. The good thing about Uniswap at this point is that control of the funds is always in the hands of the user (similar to the 0x protocol), and the second thing is that due to the large base of users and liquidity providers (LPs) of the platform, there is always quick response for exchanges. However, in this second aspect there is an important change compared to other AMM platforms, and that is that Uniswap works under a design called Constant Product Market Maker (CPMM). What this operating model does is create liquidity buffers (or pools of liquidity) that traders can quickly trade with. Yes, we are talking about the liquidity pools that are maintained by users who wish to take on this role, who are encouraged to invest in these pools to get commissions for their participation in them. This point is what has made Uniswap an interesting platform for users, since liquidity injection means more profits, and giving rise to a very fashionable phenomenon currently, liquidity extraction or liquidity extraction. The goal of this operation is clear: to create large pools of cryptocurrencies ready to trade and, consequently, to generate profits for the liquidity providers and the platform too. Furthermore, these pools are configured in such a way that liquidity providers have to deposit two tokens in them. Typically these tokens are ETH or some ERC-20 tokens supported by the platform, including stablecoins. The idea behind this is to create a balanced liquidity system that allows for the creation of trading options that are of interest to liquidity providers and platform users. For example, if liquidity providers create a DAI / ETH pool, they must enter the value in ETH and DAI. Once the pool is created, it will appear listed in Uniswap and users will be able to request exchanges within it.

Where to store it?

The best hot wallets for UNI are MyEtherWallet, TrustWallet and Atomic Wallet. If you want more security, a cold storage like Ledger or Trezor is the right choice.

Pros&Cons

*DISCLAIMER* These lists are subjective, it depends from person to person

Pros

1. Professional development team

2. Solid and updated Blockchain structure

3. High speed in transactions

Cons

1. Potential new DEX exchanges

2. Devs team is under investigation by SEC