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Uniswap
Decentralized cryptocurrency exchange

Uniswap is a decentralized cryptocurrency exchange protocol built on the Ethereum blockchain that enables automated trading through smart contracts, eliminating intermediaries. Launched in 2018 as open-source software, it has become a leading platform in decentralized finance (DeFi), facilitating token swaps via user-contributed liquidity pools. As of 2024, Uniswap ranks as the second largest decentralized and seventh overall cryptocurrency exchange by daily trading volume. Users trade directly from their wallets, while governance is handled by holders of the UNI token, introduced in 2020 to vote on protocol upgrades, though using UNI is not required to access the platform.

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History

Uniswap was created on November 2, 20184 by Hayden Adams,5 a former mechanical engineer at Siemens.6 Adams is the founder and CEO of Uniswap Labs, the company responsible for the development of the Uniswap Protocol, a decentralized exchange (DEX) built on the Ethereum blockchain.7 Adams launched Uniswap in November 2018, after working as a mechanical engineer8 and being inspired by a blog post written by Vitalik Buterin, the co-founder of Ethereum.9 His goal was to create a decentralized platform for exchanging tokens without relying on centralized exchanges.

Adams had no prior experience in blockchain technology or software development but taught himself through online resources. His innovative work on Uniswap has played a key role in the growth of decentralized finance (DeFi) by introducing the Automated Market Maker (AMM) model, which allows users to trade cryptocurrencies directly from their wallets.10

Uniswap’s average daily trading volume was US$220 million in October 2020.11 Traders and investors have utilized Uniswap because of its usage in decentralized finance (DeFi).12

Uniswap Labs

Uniswap Labs is a software company in the decentralized finance (DeFi) space, founded in 2018 by Hayden Adams.13 The company's early investors included venture capital firms like Andreessen Horowitz, Paradigm Operations,1415 Union Square Ventures LLC and ParaFi.1617

In 2022 Uniswap Labs had raised $165 million, after announcing in 2021 that it was looking to raise between $100 and $200 million and was working with Polychain.18

Uniswap offers products such as a self-custodial mobile wallet, a Trading API for professional users, and a web interface. These tools provide access to liquidity across multiple blockchains, including Ethereum, Polygon, and Optimism. The company has also collaborated with traditional finance platforms like Fireblocks to integrate DeFi features into traditional financial systems, thereby expanding its reach to institutional clients.19

Uniswap Foundation

The Uniswap Foundation was founded in 2022 by Devin Walsh and Ken Ng, after 95% of Uniswap token holders voted in favor of the proposal.20 The Foundation's mission is to support the decentralized growth and sustainability of the Uniswap Protocol and its supporting ecosystem and community.21 It facilitates community governance of the Uniswap DAO, development of the Uniswap Protocol, and communication among contributors.22 Uniswap Foundation's most recent vision and funding proposal—Uniswap Unleashed—outlined a plan to make the Uniswap Protocol the world’s infrastructure for digital value transfer with significant support for Uniswap v4 and Unichain.23 It passed with overwhelming support.24

Protocol

Uniswap acts as an automated market maker and uses liquidity pools to fulfill orders, instead of relying on a traditional market maker, with an aim to create more efficient markets.252627 Individuals and bots—termed "liquidity providers"—provide liquidity to the exchange by adding a pair of tokens to a smart contract which can be bought and sold by other users according to the constant-product rule ϕ ( x , y ) = x y {\displaystyle \phi (x,y)=xy} .28 In return, liquidity providers are given a percentage of the trading fees earned for that trading pair. For each trade, a certain amount of tokens is removed from the pool for an amount of the other token, thereby changing the price. No fees are required to list tokens which allow a large amount of Ethereum tokens to be accessible and no registration is required for users.29 As open-source software, Uniswap's code can also be forked to create new exchanges.30

UNI token

UNI is the governance token of the Uniswap protocol, enabling holders to participate in the platform's decentralized governance. Introduced in September 2020, UNI was distributed through an airdrop to early users of the platform and allocated to various stakeholders, including the development team, investors, and a community treasury.

The token allows holders to propose and vote on protocol upgrades, changes to fee structures, and other governance-related matters. UNI operates on the Ethereum blockchain following the ERC-20 standard, ensuring compatibility with a wide range of decentralized applications. Its total supply is capped, with a scheduled release over several years to support ongoing development and ecosystem growth.31

See also

References

  1. "DeFi Boom Makes Uniswap Most Sought-After Crypto Exchange". Bloomberg.com. 16 October 2020. https://www.bloomberg.com/news/articles/2020-10-16/defi-boom-makes-uniswap-most-sought-after-crypto-exchange ↩

  2. "Crypto Exchange Gets Millions After Copy-Paste of a Rival's Code". Bloomberg.com. 11 September 2020. https://www.bloomberg.com/news/articles/2020-09-11/-come-to-jesus-moment-for-crypto-finance-apps-rocks-valuations ↩

  3. Crypto Confidential. "Stimulus Checks From A Crypto Exchange; Bitcoin Rebound". Forbes. https://www.forbes.com/sites/cryptoconfidential/2020/09/20/stimulus-checks-from-a-crypto-exchange-bitcoin-rebound/?sh=2f66301178d5 ↩

  4. Adams, Hayden (11 February 2019). "A short history of Uniswap". Uniswap. https://uniswap.org/blog/uniswap-history/ ↩

  5. "Hayden Adams". Forbes. https://www.forbes.com/profile/hayden-adams/ ↩

  6. "DeFi Boom Makes Uniswap Most Sought-After Crypto Exchange". Bloomberg.com. 16 October 2020. https://www.bloomberg.com/news/articles/2020-10-16/defi-boom-makes-uniswap-most-sought-after-crypto-exchange ↩

  7. "Who is Hayden Adams? Founder of Uniswap". Metaschool. 5 January 2023. https://metaschool.so/articles/hayden-adams-founder-uniswap-profile-2#:~:text=Hayden%20Adams%20was%20born%20on,Bachelor%20in%20Engineering%20in%202016. ↩

  8. "Hayden Adams". Golden. https://golden.com/wiki/Hayden_Adams-4NRA5KE ↩

  9. Adams, Hayden (2019-11-05). "🦄 Uniswap Birthday Blog — V0". Uniswap. Retrieved 2025-05-14. https://medium.com/uniswap/uniswap-birthday-blog-v0-7a91f3f6a1ba ↩

  10. "A crypto-exchange founder makes his case for decentralised finance". The Economist. ISSN 0013-0613. Retrieved 2024-12-13. https://www.economist.com/by-invitation/2022/12/06/a-crypto-exchange-founder-makes-his-case-for-decentralised-finance ↩

  11. "DeFi Boom Makes Uniswap Most Sought-After Crypto Exchange". Bloomberg.com. 16 October 2020. https://www.bloomberg.com/news/articles/2020-10-16/defi-boom-makes-uniswap-most-sought-after-crypto-exchange ↩

  12. "DeFi Boom Makes Uniswap Most Sought-After Crypto Exchange". Bloomberg.com. 16 October 2020. https://www.bloomberg.com/news/articles/2020-10-16/defi-boom-makes-uniswap-most-sought-after-crypto-exchange ↩

  13. "A crypto-exchange founder makes his case for decentralised finance". The Economist. ISSN 0013-0613. Retrieved 2024-12-13. https://www.economist.com/by-invitation/2022/12/06/a-crypto-exchange-founder-makes-his-case-for-decentralised-finance ↩

  14. Gara, Antoine. "From Wall Street's Greatest Trade To The Top Dealmakers And Financial Entrepreneurs: 30 Under 30 In Finance 2021". Forbes. https://www.forbes.com/sites/antoinegara/2020/12/01/from-wall-streets-greatest-trade-to-the-top-dealmakers-and-financial-entrepreneurs-30-under-30-in-finance-2021/?sh=3962d9013b10 ↩

  15. del Castillo, Michael. "11 Bitcoin And Blockchain Leaders Made Forbes 30 Under 30 List". Forbes. https://www.forbes.com/sites/michaeldelcastillo/2020/12/01/10-bitcoin-and-blockchain-leaders-who-made-forbes-30-under-30-list/?sh=75e45a942198 ↩

  16. "DeFi Boom Makes Uniswap Most Sought-After Crypto Exchange". Bloomberg.com. 16 October 2020. https://www.bloomberg.com/news/articles/2020-10-16/defi-boom-makes-uniswap-most-sought-after-crypto-exchange ↩

  17. "Novogratz Plows Ahead In DeFi Amid the 'Gamifying' of Crypto". Bloomberg.com. 29 September 2020. https://www.bloomberg.com/news/articles/2020-09-29/novogratz-plows-ahead-in-defi-amid-the-gamifying-of-crypto ↩

  18. Singh, Manish (2022-10-13). "Uniswap Labs valued at $1.66 billion in $165 million new funding". TechCrunch. Retrieved 2024-12-13. https://techcrunch.com/2022/10/13/uniswap-labs-raises-165-million-in-new-funding/ ↩

  19. "Uniswap Labs and Fireblocks Collaborate to Bring DeFi Innovation to TradFi". Business Wire (Press release). https://www.businesswire.com/news/home/20241204889966/en/Uniswap-Labs-and-Fireblocks-Collaborate-to-Bring-DeFi-Innovation-to-TradFi ↩

  20. "S2:E8 Uniswap Foundation: Behind the Scenes with Devin Walsh". www.archetype.fund. Retrieved 2025-05-14. https://www.archetype.fund/media/s2-e8-uniswap-foundation-behind-the-scenes-with-devin-walsh ↩

  21. "[Temperature Check] Create the Uniswap Foundation". Uniswap Governance. 2022-08-04. Retrieved 2025-05-14. https://gov.uniswap.org/t/temperature-check-create-the-uniswap-foundation/17358 ↩

  22. Adejumo, Oluwapelumi (2025-04-02). "Compound looks to emulate Uniswap with new foundation initiative". CryptoSlate. Retrieved 2025-05-14. https://cryptoslate.com/compound-looks-to-emulate-uniswap-with-new-foundation-initiative/ ↩

  23. "[Governance Proposal] Uniswap Unleashed: Unichain and Uniswap v4 Liquidity Incentives". Uniswap Governance. 2025-02-14. Retrieved 2025-05-14. https://gov.uniswap.org/t/governance-proposal-uniswap-unleashed-unichain-and-uniswap-v4-liquidity-incentives/25250 ↩

  24. Hitchcock, Decrypt / Logan (2025-03-20). "Uniswap Foundation Gets $177 Million in Funding as Ethereum DeFi Users Await Fee Sharing". Decrypt. Retrieved 2025-05-14. https://decrypt.co/310912/uniswap-177-million-funding-fee-sharing ↩

  25. Lo, Yuen; Medda, Francesca (3 November 2020). "Uniswap and the rise of the decentralized exchange". Mpra.ub.uni-muenchen.de. https://mpra.ub.uni-muenchen.de/103925/ ↩

  26. Konrad, Alex. "These Young Investors Are Still Betting Big On Crypto — And Are Taking Harvard And Stanford Along For The Ride". Forbes. https://www.forbes.com/sites/alexkonrad/2020/10/18/these-young-investors-betting-big-on-crypto-are-taking-harvard-and-stanford-along-for-the-ride/?sh=5e9280d4212d ↩

  27. "DeFi Boom Makes Uniswap Most Sought-After Crypto Exchange". Bloomberg.com. 16 October 2020. https://www.bloomberg.com/news/articles/2020-10-16/defi-boom-makes-uniswap-most-sought-after-crypto-exchange ↩

  28. Adams, Hayden; Zinsmeister, Noah (March 2021). "Uniswap v3 core" (PDF). Uniswap. https://uniswap.org/whitepaper-v3.pdf ↩

  29. "DeFi Boom Makes Uniswap Most Sought-After Crypto Exchange". Bloomberg.com. 16 October 2020. https://www.bloomberg.com/news/articles/2020-10-16/defi-boom-makes-uniswap-most-sought-after-crypto-exchange ↩

  30. Osborne, Charlie. "DeFi SushiSwap creator returns $14m in ETH to project after causing token crash". ZDNet. https://www.zdnet.com/article/defi-sushiswap-creator-returns-14m-in-eth-after-causing-coin-crash/ ↩

  31. "Introducing UNI". Uniswap Labs Blog. https://blog.uniswap.org/uni ↩