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Why are people so excited about UNI?
A year ago I wrote about Uniswap
A revolutionary Decentralized Exchange
It changed the Game, and kickstarted DeFi as we know it.
Thread: https://medium.com/swlh/uniswap-isnt-your-ordinary-dex-c37fcaa67470
A year ago I wrote about Uniswap
A revolutionary Decentralized Exchange
It changed the Game, and kickstarted DeFi as we know it.
Thread: https://medium.com/swlh/uniswap-isnt-your-ordinary-dex-c37fcaa67470
1/ Uniswap was a completely different DEX
Older Dexes had orderbooks and deposit/withdrawals.
While this works for CEXes, for DEXes it's a terrible user experience.
Uniswap let you trade from your wallet in a single transaction.
Easy as Pie.
Older Dexes had orderbooks and deposit/withdrawals.
While this works for CEXes, for DEXes it's a terrible user experience.
Uniswap let you trade from your wallet in a single transaction.
Easy as Pie.
2/ How does it work?
Uniswap pioneered the Automated Market Maker
No orderbook: a simple xy=k formula determines the price.
Anyone can "market make" and earn fees, since market making is as simple as supplying liquidity.
Uniswap pioneered the Automated Market Maker
No orderbook: a simple xy=k formula determines the price.
Anyone can "market make" and earn fees, since market making is as simple as supplying liquidity.
3/ This incentivizes long-tail liquidity
Altcoins no one cared about suddenly had liquidity on Uniswap.
For bigger coins, liquidity was sometimes better than Centralized Exchanges.
Altcoins no one cared about suddenly had liquidity on Uniswap.
For bigger coins, liquidity was sometimes better than Centralized Exchanges.
4/ This simple design also meant extreme Decentralization.
Price determined by the market automatically - No Oracles needed.
Completely non-custodial with no deposits/withdrawals.
Swaps take one transaction
Price determined by the market automatically - No Oracles needed.
Completely non-custodial with no deposits/withdrawals.
Swaps take one transaction
5/ The simple design also meant simple code
This has two great effects:
1. easy to audit, easy to secure
2. low gas fees
#2 has been a competitive advantage as gas fees have risen.
This has two great effects:
1. easy to audit, easy to secure
2. low gas fees
#2 has been a competitive advantage as gas fees have risen.
6/ Its simple, decentralized design has led Uniswap to be the top Decentralized Exchange.
Read more about Uniswap in my introductory article: https://medium.com/swlh/uniswap-isnt-your-ordinary-dex-c37fcaa67470
Read more about Uniswap in my introductory article: https://medium.com/swlh/uniswap-isnt-your-ordinary-dex-c37fcaa67470
