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What is the Uniswap Protocol Token? ($UNI)
The Uniswap Protocol is a decentralized finance ecosystem which enables the seamless transfer of cryptocurrencies, more specifically ERC20 tokens traded on the Ethereum network, without the need for any intermediaries. The Uniswap decentralized exchange was launched in 2018, and quickly became the most used decentralized exchange (DEX) on the Ethereum network. Its associated cryptocurrency and native token is known by its token symbol $UNI.
Uniswap is one of the most heavily traded of all active DEXs globally. The 24 hour trade volume most recently averaged just under $1.4 billion USD. The Uniswap platform uses an underlying Automated Market Maker (AMM) system, and in fact had a hand in developing the concept to its common use across decentralized finance (DeFi) today.
What is an automated market maker?
An automated market maker system replaces the model of market making used by centralized exchanges. In a centralized exchange market making model, liquidity is provided by select institutional investors or financial institutions. In decentralized exchanges like Uniswap, the market making system is facilitated by a synergy of liquidity provided by individuals in the form of 50-50 liquidity pool tokens and trade implemented via smart contracts.
When a trade is processed on a decentralized exchange using the Automated Market Maker system, smart contracts provide the enacting wallet with the liquidity traded for. Liquidity is provided by the collection of individuals actively giving liquidity with LP tokens designated to the various liquidity pools on Uniswap ($UNI) and other DEXs with similar processes.
More about Uniswap Protocol ($UNI)
Further details about Uniswap reveal that changes to the protocol depend on a system which relies on votes from members of the holders community. Changes decided upon in this way are implemented by a dedicated team of Uniswap developers.
The Uniswap ($UNI) ecosystem is fueled and powered by the governance token, $UNI, which is used to determine the amount of voting power distributed among the governing holders. Registered customers can buy Uniswap ($UNI) on Firstrade.
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