Uniswap may seem to have registered its mark in the crypto-verse, amid the boom seen in DeFi Cryptos.
Members of the crypto-verse are rushing into Uniswap, on the basis that it’s the preferred structure for crypto strategies that include yield farming, where investors and market players can make as high as triple-digit returns by lending or polling cryptos in exchange for interest and fees.
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How Uniswap makes money
Uniswap is designed to be a decentralized protocol. All fees go to market liquidity facilitators, and none of the founding partners get a cut from the transactions that occur through the protocol.
- Currently, the transaction fee paid for these market liquidity providers is 0.3% per successful transaction. That said, these are added to the liquidity pool, but these market liquidity facilitators can redeem them at any time.
- The fees are distributed according to each liquidity provider’s share of the pool.
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What you should know
Uniswap is a decentralized exchange protocol built on the Ethereum network.
Uniswap has no book or any centralized platform for executing trades. It allows users to trade without a middleman or third party, with a high degree of decentralization and censorship-resistance.
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According to data tracker CoinMarketCap, barely two years after the Uniswap launch, its average daily trading volume has kicked up to about $200 million, making it the largest DeFi Exchange on planet earth.
- Uniswap presently lists 845 crypto tokens, while the world’s biggest crypto spot exchange, Binance, currently lists 820 coins.
- Uniswap operates via software that is decentralized in principle. It has a team of computer programmers working endlessly to make it better and is mainly governed by a group of its own users.
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