Deepika- Uniswap, a decentralized exchange based on Ethereum blockchain, facilitates crypto trading and exchanging various Ethereum-based tokens.
- The platform has its own native token called UNI, which facilitates transactions in the overall protocol and provides governance.
Decentralization has changed the whole centralized world by giving users the right to manage their data on their own. This has resulted in a flood of platforms that are decentralized in nature making their way into the digital world. One such platform is Uniswap, which acts as a decentralized exchange (DEX) and has changed the way we trade digital assets.
The platform started in 2018 with its first version, which enabled trading between Ethereum and ERC-20 Tokens. The platform has always gained mainstream attention due to its efficient and decentralized trading system. Recently, it has gained a significant name in the crypto landscape by surpassing the trading volumes of Coinbase, one of the largest centralized exchanges.
Uniswap- A Platform Enabling to Trade Cryptocurrencies
Uniswap is one of the largest decentralized exchanges, allowing users to trade cryptocurrencies. The platform is based on the Ethereum blockchain and uses automated market makers (AMM) to execute the swap or exchange. It was launched on November 2, 2018 as a V1, which enabled the trading of ERC-20 Tokens.
After V1, the platform launched V2, which has amazing gestures such as trading pools, flash swaps, and the trading of ERC-20 pairs. After V2, the current V3 was launched by the platform, which has unlocked the maximum throughput of the platform and increased focus on concentrated liquidity.
However, V4 was launched recently, but features will be upgraded in the future. The platform has consistently upgraded itself technology wise so as to outperform its competitors and stands as one of the largest decentralized exchanges.
How Has The Platform Outperformed Centralized Exchanges?
While taking into consideration centralized exchanges, there are a few at the top of the market, which are Coinbase, Kraken, and a few others. According to The Block Research, the spot market volume of Uniswap in March reached $71.6 Billion, surpassing Coinbase’s volume by up to 45%.
The data shows that the platform has gained popularity and experienced significant growth. Moreover, we talk about the current scenario of centralized exchanges. They are facing a tough situation as the SEC has intensified its scrutiny of centralized exchanges.
Coinbase is facing regulatory scrutiny from the SEC’s side, and the SEC is investigating the potential sale of unregulated securities from Coinbase’s side. Kraken, another centralized exchange, recently paid $30 Million for its failure to register the offer and sale of digital assets.
This legal action has also resulted in the popularity of decentralized exchanges, as they didn’t face any scrutiny and also worked on behalf of the user’s interests. This has popularized the Uniswap and resulted in an increase in trading volume.
Conclusion
In a nutshell, if we see the current scenario, the digital world is all about decentralization, as Web 3 theory is paving the way. That’s why decentralized exchanges have gained popularity in the current crypto space. Moreover, they are far from any regulations in the near future, as the focus is mainly on centralized exchanges because of their various mishaps, downfalls, and frauds.
Uniswap will remain at the top of the crypto landscape with the help of its groundbreaking innovation, which has increased its popularity and noted significant growth. However, it’s interesting to see what the future holds.
