Uniswap is a decentralized exchange, or DEX, that allows users to trade cryptocurrency tokens directly from their own wallets, without needing to deposit funds with a centralized company first. It runs entirely through smart contracts on the Ethereum blockchain and several other compatible networks.
Rather than using a traditional order book that matches buyers and sellers, Uniswap uses a system called an automated market maker, where users called liquidity providers deposit pairs of tokens into a shared pool, and trades are executed against that pool using a pricing formula, with liquidity providers earning a share of trading fees in return.
The native token, UNI, is primarily used for governance, allowing holders to vote on proposed changes to the protocol. Uniswap is widely regarded as one of the projects that helped popularize decentralized trading as a practical alternative to centralized exchanges.
