Uniswap

Uniswap (UNI) is the governance token of the Uniswap Protocol, a decentralised exchange that uses automated market makers (AMMs) to enable token swaps directly from user wallets. The protocol launched on Ethereum and has since expanded to multiple Layer 2 networks and other chains, with deployments handling a significant share of decentralised trading volume.

Rather than matching individual buy and sell orders through an order book, Uniswap pools liquidity from depositors into smart contracts that price swaps according to a deterministic formula. Liquidity providers earn a share of trading fees in proportion to their contribution. Successive protocol versions have added concentrated liquidity, allowing providers to allocate capital within specific price ranges, and a hooks framework that enables custom logic at key points in the swap lifecycle.

UNI holders govern the protocol through onchain proposals, deciding on parameter changes, deployments to new chains and the activation of fee mechanisms. The token has a capped supply and is distributed across the community, contributors and treasury. Within the broader landscape, Uniswap is one of the foundational pieces of decentralised finance infrastructure and a reference implementation for AMM-based exchange design.

Decentralised exchanges use automated market makers and onchain liquidity pools to enable token swaps without intermediaries, forming a core layer of decentralised finance. Uniswap sits within this category as one of the most widely used protocols by trading volume. Readers tracking how onchain markets evolve can explore broader trends across crypto and Web3.