DeFi

Uniswap UNI

The governance token of Uniswap, the largest decentralized exchange on Ethereum and the original AMM that defined DeFi.

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Founded
2018
Founder
Hayden Adams
Consensus
Token on Ethereum and many L2s
Max Supply
1,000,000,000

What UNI is

Uniswap is the largest decentralized exchange on Ethereum and the canonical implementation of the automated market maker model. It was launched in 2018 by Hayden Adams, inspired by ideas Vitalik Buterin had written about. Uniswap V2 (2020) introduced the simple constant-product formula that remains the reference design for AMMs everywhere. UNI is the governance token, distributed via a 2020 airdrop that gave 400 UNI to every wallet that had used the protocol.

How it works

Uniswap V2 used a single constant-product formula x * y = k for all pools. Uniswap V3 (2021) introduced concentrated liquidity, where LPs deposit into specific price ranges for higher capital efficiency. Uniswap V4 (2024-2025) adds "hooks", programmable extensions that let pool creators add custom logic for fees, dynamic curves, oracles, and more. UNI holders vote on protocol upgrades, fee structure, and treasury allocations.

Use cases

Trading: Uniswap is where most ERC-20 tokens get their first market. Liquidity provision: anyone can deposit tokens and earn trading fees. Permissionless market creation: any token pair can have a Uniswap market without listing fees or approvals. The protocol is deployed on Ethereum and most major L2s, with multi-chain governance executed via cross-chain messaging.

Tradeoffs and criticism

LPs face impermanent loss when token prices diverge significantly from when they deposited. The constant-product formula is capital-inefficient for stablecoin pairs (Curve handles those better). Uniswap's "fee switch" (sending a fraction of trading fees to UNI holders) was debated for years and has been activated in limited form via governance.

Where to track UNI

See AMM, liquidity pool, and slippage for foundational concepts.

Related coins

Frequently asked questions

How is Uniswap different from a centralized exchange?
Uniswap is a smart contract anyone can interact with directly. There is no order book, no account, no KYC, no listing process. Trades execute against liquidity pools at formula-determined prices.
What is impermanent loss?
Impermanent loss is the gap between holding two tokens directly and depositing them as Uniswap liquidity, when the token prices diverge. The LP's share of the pool gets rebalanced toward the falling asset, locking in less upside than just holding.
Does UNI generate income?
Historically no, though the "fee switch" governance mechanism allows UNI holders to vote on whether a portion of pool fees should be routed to the UNI treasury or stakers. This has been activated in limited form.