Uniswap is a popular decentralized trading protocol that facilitates the automated trading of decentralized finance (DeFi) tokens. It is an example of an automated market maker (AMM), which launched in November 2018 and has gained significant popularity due to the growth of the DeFi ecosystem and the associated surge in token trading.
Uniswap aims to improve the efficiency of token trading compared to traditional exchanges by solving liquidity issues through automated solutions. Unlike centralized exchanges, Uniswap is open to anyone who holds tokens, allowing them to participate in the trading process.
In September 2020, Uniswap took a further step by creating and distributing its own governance token, UNI, to past users of the protocol. This added both profitability potential and the ability for users to shape the future development of the platform, which is in line with the decentralized nature of DeFi. The total supply of UNI is 1 billion tokens, with a significant portion (60%) allocated to the Uniswap community members, including past users.
Uniswap has continued to evolve, with the launch of Uniswap V2 in November 2018, which introduced new features such as ERC-20 pairs, price oracles, and flash swaps. The latest version, Uniswap V3, launched on the mainnet in May 2021, offering greater capital efficiency for liquidity providers, better execution for traders, and enhanced infrastructure. The Uniswap project was founded by Ethereum developer Hayden Adams, with direct input from Ethereum creator Vitalik Buterin.