When a few years ago, the cryptocurrency space took a turn in the direction of decentralized finance (DeFi), expanding the fundamental principle of decentralization announced by the creator of Bitcoin, Satoshi Nakamoto; Uniswap emerged as one of the first DeFi platforms and started showing users all the benefits of DeFi versus CeFi (centralized finance).
Many Bitcoin maximalists immediately started criticizing DeFi applications as scams and their creators as con artists and rug pullers. Still, UNI is one of the top 20 digital currencies, with a large army of users making their profit on UNI and enjoying the benefits of this decentralized application.
About Uniswap and dexes overall
Uniswap is one of the first decentralized exchanges (dexes) launched in 2018 instead of centralized ones – Binance, Coinbase, Bitmex, etc. Based on the Ethereum blockchain, Uniswap became one of the first DeFi applications that allowed crypto users to start making passive profits on their crypto holdings through staking, lending, etc, without intermediaries. After Uniswap emerged in the crypto market, other similar projects on Ethereum also appeared. Among them were SushiSwap, the Balancer, Curve, and many others. Still, Uniswap remains the largest and the most popular dex on Ethereum.
Uniswap is an open-source dex, although, in 2022, the Uniswap team did implement their powers to freeze more than 250 accounts about supposedly illegal activities on the Tornado Cash mixing service. Many DeFi critics among Bitcoiners then pointed out that Uniswap is not that much decentralized after all.
UNI is Uniswap’s native token leveraged by the dex users for voting on critical adjustments and changes made to the Uniswap protocol by the dev team. It also allows third-party developers to build their apps (decentralized applications) and other tools on top of it.
Uniswap was the first to come up with the idea of launching the Automated Market Maker (AMM) model. In it, users supply Ethereum-based coins to Uniswap’s liquidity pools, where specially built algorithms set prices for those coins based on the supply and demand principle. This works contrary to order books operating through mechanisms that match bids and asks on centralized exchanges.
Supplying tokens to the liquidity pools on Uniswap opens a wide range of success-making opportunities to users: they can earn rewards off their tokens while enabling others to do peer-to-peer trading with the tokens in the pools. This goes beyond just adding crypto to the liquidity pools on this dex – users can also create their tokens based on Ethereum’s ERC-20 protocol and list them on Uniswap. At the moment, there are hundreds of tokens to be traded on this dex. Later, Uniswap evolved to V2, which allowed not only swapping ERC-20 tokens but also stablecoins, such as (USDT, USDC, etc). In 2021, Uniswap V3 was rolled out, offering such features as Concentrated Liquidity, Flexible Fees, and Improved Price Oracle.
What appeals to many Uniswap users is the fact they do not have to transfer their crypto to any third-party platforms and the anonymous use of the dex, meaning that they can avoid creating any signup accounts or providing their details, unlike in the case with centralized exchanges.
Using Uniswap requires an active Ethereum-based wallet and a bit of ETH for gas (transaction fees).
UNI price prediction for this year
This year, many experts expect UNI to surge high, along with many other altcoins, since there is a significant driver to consider – the Bitcoin halving, which is less than two months away. Bitcoin’s upward trajectory is already driving the growth of altcoins from the top ten list and beyond.
Among these experts is market analyst Michael van de Poppe, who stated that this year, he is betting on the Ethereum ecosystem and all the altcoins based on Ethereum as he expects an explosive growth of the DeFi sector to begin along with coins used in it. He expects altcoins to start picking up in March or May, right after the Bitcoin halving is completed.
Now, UNI occupies the top 18th position on CoinMarketCap with a market capitalization equalling $7,271,300,389 and a circulating supply of 598,736,140 UNI. This year, experts predict a possible high close to $26, while at press time, UNI is trading at $12.17. During the last week, UNI increased by nearly 17%.
