Uniswap review in 2024: Pros, cons, and more

Our Verdict

Our Verdict

Uniswap is a decentralized exchange (DEX) protocol built on the Ethereum blockchain, enabling users to swap various ERC-20 tokens directly from their wallets without intermediaries. Launched in November 2018 by Hayden Adams, Uniswap has become one of the most prominent decentralized finance (DeFi) platforms, renowned for its innovative use of automated market makers (AMMs) to facilitate trading. Uniswap’s core strength lies in its decentralized nature. Unlike traditional exchanges that rely on centralized order books, Uniswap operates on smart contracts, ensuring users retain full control over their funds. This decentralization eliminates the risks of hacking and manipulation commonly associated with centralized exchanges.

Pros

• Open token listing
• User-friendly interface
• Automated Market Maker (AMM) Model

Cons

• Limited to ERC-20 tokens
• Potential for low-quality tokens

4.8

Our ratings take into account a product's cost, features, ease of use, customer service and other category-specific attributes. All ratings are determined solely by our editorial team.

Starting price

$11.08

Decentralization

Uniswap is fundamentally decentralized

Automated Market Maker (AMM) Model

Uniswap utilizes an automated market maker model

Uniswap, the top decentralized exchange in the crypto sphere, suits both seasoned traders and novices. Beginners should be mindful of trade price impacts, which Uniswap conveniently alerts you about. I personally found the platform user-friendly, with excellent UI and features. Read our detailed Uniswap exchange review for insights into its strengths, weaknesses, and our firsthand impressions.

Understanding Uniswap

Uniswap operates as a decentralized exchange, distinct from centralized platforms like Coinbase or Gemini. Instead of being managed by a company, the platform is governed by its users through the UNI token, enabling voting on proposed changes. Transactions occur via liquidity pools provided by other traders.

The Uniswap app is developed and overseen by Uniswap Labs, based in New York. However, the protocol itself is community-governed. Hayden Adams, the founder of Uniswap and CEO of Uniswap Labs, is respected in the crypto space and shares insights via Twitter.

Initially developed for Ethereum, Uniswap employs smart contracts for exchange functionality. These contracts operate based on predefined conditions, facilitating seamless transactions.

Uniswap now extends support to Ethereum-compatible networks like Polygon and Optimism, offering reduced transaction costs, sometimes mere pennies per transaction.

Swaps on Uniswap are limited to ERC-20 tokens, the standard for Ethereum. Upon completing a swap, funds are deposited directly into your wallet without additional steps or withdrawal fees.

Since its launch, Uniswap has seen nearly 5 million unique wallet addresses and over $1 trillion in trading volume, solidifying its position as a prominent decentralized exchange.

Essential characteristics

Uniswap may not be entirely unique among decentralized exchanges, but its standout feature lies in its intuitive interface, providing a gateway to the expansive realm of cryptocurrencies.

• Extensive token variety: Uniswap's large user base facilitates access to a wide array of tokens compared to smaller decentralized exchanges.
• User-friendly interface: Similar to Google's straightforward search interface, Uniswap simplifies crypto trading, offering easy access to advanced features with a single click.
• Robust liquidity: Uniswap's prominent position in the market attracts deep liquidity pools, resulting in less price volatility, particularly for larger transactions.
• NFT integration: Uniswap serves as an aggregator for NFTs, offering a curated selection from leading marketplaces, enhancing accessibility to non-fungible tokens.

Uniswap: In-depth analysis by experts

After thorough testing, I found Uniswap's app to be user-friendly for most features.

In this review, I utilized the MetaMask wallet, which automatically detects new tokens and supports multiple blockchains. To mitigate high fees on the Ethereum Mainnet, I opted for the Polygon network.

Uniswap accommodates Ethereum, Polygon, Optimism, Arbitrum, and Celo networks, all compatible with MetaMask. However, certain functions necessitate the Ethereum Mainnet, such as purchasing NFTs on Uniswap.

For swaps and liquidity pool funding, Polygon proves efficient on Uniswap, offering lower costs compared to Ethereum and almost instant transactions.

Tokens

Uniswap presents a curated list of top tokens categorized by blockchain, featuring 100 popular tokens for Ethereum Mainnet, 82 for Polygon, and just eight for the Celo network. This list provides a convenient way to assess trading activity.

Token statistics provided include Total Value Locked (TVL), trading volume, price, price change, and price charts. However, it's important to note that the top token lists may not encompass every token available on Uniswap. Users can utilize the search function on the swap screen to discover more obscure tokens, provided traders have funded a liquidity pool for them.

Uniswap also includes a warning if a token is unavailable on major exchanges. For instance, I encountered this message while searching for stETH (staked ETH).

Swaps

Swapping cryptocurrencies on Uniswap was effortless and straightforward. Uniswap conveniently displays the balances in your connected wallet, allowing you to see available token balances while selecting your trade.

I exchanged some USDC stablecoin for MATIC tokens. Uniswap seamlessly directed the transaction to MetaMask for authorization.

Swap fees fluctuate based on the cryptocurrencies involved and the fees set by liquidity providers. On Uniswap, you can either trade (swap) or provide liquidity by depositing crypto into a smart contract for a paired asset, like MATIC and WETH.

Funding

You have two main options for adding crypto assets to your Uniswap-connected wallet: transferring them from an exchange or another wallet, or purchasing assets directly on Uniswap through a third-party provider.

In the United States, Uniswap collaborates with MoonPay, a service provider that facilitates the purchase of various tokens like ETH, MATIC, and USDC. However, the availability of assets through MoonPay may vary depending on the blockchain.

Uniswap liquidity pools

In our Uniswap review, we couldn't overlook the liquidity pools feature, a standout offering that allows token holders to earn returns by contributing to liquidity pools.

Within a liquidity pool, you deposit paired tokens in equal value, based on the current exchange rate. For instance, I contributed 0.01932 WETH and 30.1711 MATIC. Uniswap enables you to set a price range, limiting trades to within that range. For common pairs and fees, Uniswap suggests a default price range that's customizable.

With Polygon, I swiftly added liquidity to the pool, earning a 0.3% fee whenever someone utilized the pool for token swaps. Closing the position was just as efficient.

Liquidity pools aim to maintain a balanced 50-50 ratio for paired assets. Uniswap's Automated Market Maker (AMM) algorithm adjusts the price of high-demand tokens if there's increased buying pressure for one of the tokens in the pair.

Based on my personal experience providing liquidity on Uniswap for several days, I observed that the asset values closely mirrored the broader market, enhancing the value of my position as the crypto market surged. Additionally, fees from trades contributed to the overall value, although the amounts were relatively modest.

Support for users

Uniswap provides support through two channels: a ticket system and a discord server.

Navigating the discord server proved challenging for me, prompting the thought of seeking assistance from my teenager.

Instead, I opted to submit a ticket to inquire about viewing liquidity pool starting deposits. I received a response via email within an hour, demonstrating a level of expertise in the field. The reply directed me to Uniswap Info and external DEX explorers for the information I sought.

After some investigation on the blockchain, I located the necessary figures. While beginners might find this process more challenging, I appreciated the prompt response from Uniswap.

Safety of using Uniswap

Before crafting our Uniswap review, we delved deep into its safety aspects. While Uniswap's code has undergone audits, there are no absolute assurances. Despite millions of users engaging in token swaps on Uniswap, there's always the possibility of a newly discovered exploit.

When making swaps, funds remain in your wallet until you authorize the transaction. However, when providing liquidity, your tokens are locked in a smart contract, posing a higher risk due to potential vulnerabilities. This risk is inherent to any decentralized exchange.

We employ various methods to assess the safety of using Uniswap, considering a range of information and signals. For comprehensive insights into Uniswap's history and safety, refer to the detailed sections below.

Note: In the realm of cryptocurrency, conducting your own research and utilizing apps you trust is paramount.