What is Uniswap?

Learn more about how Uniswap works, why the UNI token is useful and where to buy it.

Posted

Fact checked
Learn about Uniswap Learn more
Where to buy UNI Find UNI exchanges

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

UNI is the native token of Uniswap.

Uniswap V2 is a decentralised exchange built on Ethereum that allows users to swap any two Ethereum tokens with each other thanks to the use of user-funded liquidity pools.

Quick facts

CryptocurrencyUNI
Circulating supply (approx. as of November 2020)214 million
Maximum supply1 billion
BlockchainEthereum (ERC-20)
PurposeGovernance

How does the Uniswap exchange work?

Uniswap allows users to swap any Ethereum ERC-20 token for any other token directly from their wallets. It does so through the use of the Ethereum blockchain, which makes it a decentralised exchange (DEX) – but it's a DEX with a difference.

Uniswap is unique to other decentralised exchanges in that instead of matching orders through an order book with markets predefined by the developers, users are able to trade any two coins they choose – which is called a swap.

Typically, an exchange will offer a limited range of currency pairs, such as ETH/LINK or DAI/USDT, which means that only a restricted range of coins can be traded with one another.

Uniswap shakes up this model in two ways – the first is by allowing users to list any token they wish, and the second is through the use of liquidity pools to help fund these swap markets. This allows new tokens to enter the market without needing to list on a centralised exchange first, which can be a slow and costly process. The only requirement is that there are enough Uniswap users providing liquidity to a given token pool so that it can be swapped.

What does UNI do?

UNI is the governance token for the Uniswap exchange.

It bestows holders with a say in how the platform is managed, giving them the power to put forward proposals, vote on changes and manage fees.

The token is inflationary and was originally distributed by an airdrop that retrospectively rewarded anyone who had used the exchange before 1 September, 2020, with UNI tokens.

Following the original airdrop, additional tokens were distributed through a liquidity mining program that expired on 17 November, 2020. After this point, all remaining tokens are managed by the Uniswap treasury, which is governed by token holders.

Anyone that missed out on the initial airdrop and UNI distribution can purchase the token on a cryptocurrency exchange, just like any other token.

What to watch out for

Uniswap platform is open-source, which means that anyone can copy the code and create their own version of the platform.

This is a potential threat to the value of the Uniswap token, as Uniswap governance can be side-stepped by creating a fork (copy) of the project. If enough people abandoned the original in favour of a new exchange, then it stands to reason that the original project (Uniswap V2) and it's underlying token may lose value.

Following Uniswap V2's massive success in 2020, several projects launched new platforms based on the Uniswap code, gaining a significant user base in the process. Of note were SushiSwap, DeFi Swap and a slew of other culinary-themed DeFi exchanges.

What is DeFi? Read the beginner's guide

How to buy UNI

Here's a step-by-step guide to one way of buying UNI. Note that there might be other options available, so you may want to compare cryptocurrency exchanges to find the one that's right for you.

  1. Find an exchange that supports UNI, like the ones we've listed in the table below.
  2. Create an account and make a deposit
  3. Search for a UNI market, and trade a suitable cryptocurrency for UNI. For example, to buy UNI on the UNI/BTC market, you will need to have some Bitcoin to trade for UNI.
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.
Name Product Deposit methods Fiat Currencies Cryptocurrencies
CoinSpot Cryptocurrency Exchange
Bank transfer, BPAY, Cash, POLi, PayID
AUD

234
cryptocurrencies

CoinSpot is an Australian exchange that lets you easily buy, sell and trade more than 150 cryptos.
Swyftx Cryptocurrency Exchange
Bank transfer, Credit card, Cryptocurrency, Debit card, Osko, PayID
AUD

225
cryptocurrencies

Buy and sell a wide range of cryptocurrencies at competitive rates on this Australian exchange.
Binance Cryptocurrency Exchange Australia
Credit card, Cryptocurrency, Debit card, Osko, PayID
USD, AUD, GBP, CAD, EUR, CNY, RUB, TRY, NGN, UAH & 40+ more

263
cryptocurrencies

Finder Exclusive: Get $5 cashback when you make your first PayID/Osko deposit on Binance.com/au.
Binance is the world’s largest exchange by trading volume. Get started with instant zero fee AUD deposits and withdrawals in Australia, and enjoy low trading fees, a wide selection of cryptocurrencies and 24/7 local customer support.
Digital Surge Cryptocurrency Exchange
Bank transfer, POLi, Osko, PayID
AUD

225
cryptocurrencies

A digital exchange based in Brisbane where users can pay in AUD to buy their BTC.
CoinJar Cryptocurrency Exchange
Bank transfer (ACH)
AUD, GBP

15
cryptocurrencies

CoinJar offers a simple way to buy, sell, or trade cryptocurrency with AUD. Enjoy free and instant deposits, fees start from 0.05% and withdrawals are free to your bank account
Easy Crypto Cryptocurrency Exchange
Bank transfer (ACH)
AUD

53
cryptocurrencies

Easy Crypto is a simple way to buy and sell a range of cryptocurrencies, straight to and from your own crypto wallet.
Cointree Cryptocurrency Exchange
Bank transfer (ACH)
AUD

132
cryptocurrencies

Buy 100+ cryptocurrencies using POLi, cash or Electronic Funds Transfer.
YoBit Cryptocurrency Exchange
Bank transfer (ACH)
USD, RUB

1427
cryptocurrencies

Pay in USD, RUB or trade crypto to crypto at this Russian-based cryptocurrency exchange with hundreds of coins listed.
Kraken Cryptocurrency Exchange
Bank transfer (ACH)
USD, EUR, GBP, JPY, CAD, CHF, AUD

53
cryptocurrencies

Buy, sell and trade a range of digital currencies on this high-liquidity exchange – suitable for beginners right through to advanced traders.
Huobi Cryptocurrency Exchange
Cryptocurrency
GBP, USD, AUD, EUR, INR, BRL, KHR, CAD,CNY, NZD & 15+ more

290
cryptocurrencies

Huobi is a digital currency exchange that allows its users to trade more than 190 cryptocurrency pairs.
loading

Compare up to 4 providers

Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Disclosure: The author holds a variety of cryptocurrencies at the time of writing.

More guides on Finder

Latest crypto guides

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site