Uniswap is a governance token and it works for the Uniswap decentralised exchange, the exchange is basically an extension of Ethereum’s blockchain and is allowed to run over it. Uniswap being a governance token gives users the authenticity to be able to participate in various decisions that take place around the big table allowing the users to be a part of the decision-making process about how the platform should run. Uniswap is founded by Hayden Adams which was a former engineer at Siemens, the exchange began trading back in 2018 but the token Uniswap was launched in late 2020.
Unique aspects about Uniswap
To be able to understand what Uniswap does and how it is facilitating crypto enthusiasts over the years, there is something you need to grasp onto. First of all, there are two types of exchanges out there, there are the centralised exchanges that act more as the validators and a middle man between the crypto market and the investors, they rely on policies such as KYC (know your customers) and need to collect your personal data to be able to register yourself as a practical user.
On the other hand, the decentralised exchanges don’t rely at all on any particular exchange or third party to facilitate trading, these are not middlemen exchanges and allow users to directly communicate with others for the sake of swapping the tokens in real-time. Uniswap is like that, it is a decentralised exchange that provides people with extreme anonymity and allows them to trade with one and other in real-time. This rules out any involvement of the third parties and sharing of a precise cut with them for every transaction and you even get the best rates for that matter.
The only downside to Uniswap as a decentralised exchange is that it has varying gas fees and for that, the transaction fees could be a bit problematic in the long run. Suppose at a time the fees are fine and the next day the fees are skyrocketing, this is real volatility right there about decentralised exchanges and Uniswap being one makes it even more of a problem for those who want fixed transaction fees.
Why you should invest in Uniswap?
Apart from the volatility of the transaction fees Uniswap has a lot to offer. First of all, it allows the users to interact with the crypto market unhinges, without having to pay any fees or anything to a third-party broker, and secondly, there are rumours that it is in the middle of a partnership deal with Robinhood which is pretty decent given the fact that Robinhood is a really impressive crypto exchange.
Uniswap like any other cryptocurrency out there has that inevitable volatility factor which means that it can see immense gains in the future or become useless due to corrections and the market taking a jolt down. But anyway it is important before investing that you know what you are doing and you have done a complete market study around it.
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