The growth of cryptocurrencies is on a gradual rise and Uniswap is surely becoming a top competitor on the list. It is one of the largest decentralized crypto exchanges that enable users to swap cryptocurrency with optimal convenience when they sign up for the account.
Uniswap also enables the users to earn lucrative interest on the crypto investments and holdings. But, like most of the digital currency platforms, even Uniswap charges quite a high-interest rate on the profits that you make through investments.
This post will explore everything about Uniswap and the pros and cons associated with the platform.
What is Uniswap?
Uniswap is a decentralized platform that supports cryptocurrency exchange and investments, titled an automated market maker (AMM). Under AMM, the users can make the most use of smart contracts for easy trading of the various digital cryptocurrencies.
Since Uniswap works as a decentralized platform, they don’t have any kind of the central governing body that overlooks its processing and functions. Uniswap is termed decentralized financial services, abbreviated as Defi.
They work based on liquidity pools including that crypto funds that are initially worked around by the users. For sustaining the platform, Uniswap charges a minimal fee for the individual crypto investments and transactions involved. The generated liquidity is then distributed among the users.
How does one use Uniswap?
If you are new to the concept of crypto trading and don’t have much idea about the same, Uniswap directly binds with your crypto wallet and follows two different modes of function, including:
You can trade crypto
Under the swap option on Uniswap, the users can select the individual crypto fund that they want to trade with the one that they want to receive from the process.
You can stake crypto
Under the pool option, the users can deposit and trade with two cryptos at a time using the theUniswap pool option. There are different pools available wherein you can stake the cryptos that you can look into.
What are the benefits of using Uniswap?
Given that there are so many different types of decentralized crypto platforms available on the internet, why should you consider Uniswap for your trading needs?
Let us walk you through the list of benefits associated with the process.
Has a user-friendly design
One of the biggest benefits of Uniswap is its minimal and clean UI. When you look through the websites of other competitor crypto trading websites, Uniswap stands out for its user-friendly design. Despite being one of the earliest decentralized online exchanges for cryptocurrencies, Uniswap doesn’t fall short on the design front, and rightfully so. Even if you are new to the concept of online trading of cryptocurrencies, with Uniswap, you shouldn’t have any hassle understanding the website’s layout.
Earn lucrative interest
If you stake your cryptocurrencies using Uniswap, which is a decentralized exchange, you can earn pretty great and tangible interest rates. It operates on the crypto funds from the varying users present in the liquidity pools that contain two cryptocurrencies. When you make the trades into the liquidity pools using Uniswap, you get to have direct access to a range of interest rates, even after Uniswap collects their minimal fees from the profits.
Access to ample liquidity
When it comes to decentralized cryptocurrencies, liquidity is part of the crypto exchange process. With Uniswap, you won’t have to worry about the platform running low on funds because that’s exactly what you don’t want with your investments. The significant size of the platform is another winning streak that you get to exemplify. The total value locked on the platform is significantly high, which is another reason why it has gained the kind of popularity that it has.
Doesn’t require registration
Although this is a hit or miss among most users, we’d club it under the advantages. When you don’t have to register on a decentralized cryptocurrency trading platform, you get to overcome a lot of different security hassles. There are no personal information or account details involved with Uniswap. All you have to do is link your crypto wallet and you are good to go. However, that comes with a few drawbacks; like you can’t invest in buying crypto with the flat money or you might run into certain regulatory issues with the platform too.
Crypto wallet support
Last on the list of benefits with Uniswap is that it provides direct crypto wallet support. You can connect your Ethereum crypto wallet directly with Uniswap to then go ahead with the trading or staking process. This comes a lot in handy for the day-to-day traders who want a hassle-free yet reliable platform to carry on with their daily cryptocurrency trading processes. It connects with some of the most popular crypto wallet platforms like Coinbase, MetaMask, etc.
Uniswap is one of the leading decentralized cryptocurrency platforms, which is growing bigger and bigger by the minute. If you are starting out investing in digital currencies and you want a reliable and hassle-free platform to do so, Uniswap is no doubt one of the best platforms to do so. It does integrate a lot of pros and cons to it but we’d recommend keeping it in your top 3 choices, especially because of how competitive the features are.
Does Uniswap accept Fiat money?
One of the biggest downsides to using Uniswap is that it doesn’t accept fiat money for the trading process. You have to link it to an existing crypto wallet to be able to get the trading process sorted.
What are the gas fees of Uniswap?
The gas fees on Uniswap are quite high, especially because it’s a decentralized platform. Some of the basic fees involve a minimum amount of $30-$50, which accounts for around 3% of the investment amount.
Does Uniswap require a KYC process?
KYC or knowing your customer is a verification process for most trading platforms. Unlike other trading websites, Uniswap doesn’t have a KYC process since it doesn’t require registration or account creation via its platform.