Not long ago I started in the world of blockchain and cryptocurrencies. I started by reading some posts, watching some videos on YouTube, following Twitter users with knowledge of these fields...
A couple of days ago I started seeing numerous tweets that talked about UniSwap and its UNI token. Following this increased interest in UniSwap,
I was curious to know what UniSwap is and why this increase in tweets.
What is UniSwap?
UniSwap has its origin at the end of 2108 as a project or DeFi funded by the Ethereum Foundation and whose work base is the exchange of ERC-20 tokens generated on the Ethereum network among UniSwap users.
But unlike other cryptocurrency exchanges, which act as intermediaries and in which a series of fees are charged when making the exchanges, in UniSwap there are no intermediaries and no fees are charged.
Why is it attracting so much interest?
It is true, UniSwap is not the first exchange system between users, but it is the first to use a new approach:
On the one hand, while in a traditional exchange system the buyers and sellers of cryptocurrencies are in charge of generating sufficient liquidity to carry out the transactions, in UniSwap what is called an automatic provisioning of liquidity occurs, in which other users can provide liquidity (which is called Pools) so that the exchanges of tokens take place, and that end up earning a part of the generated commissions.
On the other hand, while in traditional systems there is an order book, in which the buy and sell orders are noted, and which end up determining the price of the token, in UniSwap, the price is set by a formula:
Suppose we want to make an exchange between Ethereum and another cryptocurrency. The value of k is calculated, as we have seen by multiplying the amount of Ethereum in the Pool by the amount of the cryptocurrency with which you want to make the exchange. For example, if the exchange pair is ETH/USDC and the Pool is made up of 50 ETH and 5,000 USDC, the value of k will be:
k = 50 * 5,000 = 250,000
If what we want is to exchange 10 ETH for USDC, when entering these 6 ETH in the Pool, there will be 60 ETH. Since the value of k is constant, we will have, with respect to the USDC:
60 * USDC = 250,000 -> USDC = 250,000 / 60 = 4,166.7
Therefore, the user will receive:
5,000 USDC - 4,166.7 USDC = 833.3 USDC
OK it's good. But all the fuss?
The commotion began with a tweet from UniSwap, announcing the launch of its UNI token.
This token gives its holders, governance rights over the UniSwap platform. Which means that all users who have UNI tokens can vote for changes on the platform.
One billion UNI tokens have been originally minted, with 60/40 split between UniSwap users (that is, those who have used an Ethereum address in UniSwap at some point) and UniSwap development members and advisers.
But there is still more
UniSwap reported that all users who at some point used UnisSwap with an Ethereum address could receive 400 UNI tokens.
To do this, simply follow these steps:
- Access https://app.uniswap.org/
- Connect the wallet with the Ethereum address that was used in UniSwap.
- Click on "Claim your UNI tokens"
- Confirm the transaction.
Today these 400 UNI tokens have a value of $2,176 (1 UNI = $5.44).
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