DeFi
Uniswap
The largest decentralized exchange using automated market makers to enable token swaps without order books.
Last Updated
2026-03-19
What is Uniswap?
Uniswap is the largest decentralized exchange by volume, using automated market makers instead of order books. Anyone can swap tokens or provide liquidity permissionlessly.
How does Uniswap work?
- Liquidity providers deposit equal value of two tokens into a pool.
- Traders swap against the pool using the constant product formula
x * y = k. - A 0.3 percent fee is charged on every swap and distributed to liquidity providers.
- UNI holders vote on protocol changes via governance.
Why does Uniswap matter?
It removed the need for order books and professional market makers, enabling anyone to trade any ERC-20 token pair without an account or intermediary.
Key features of Uniswap
- AMM-based pricing with no order book
- Permissionless liquidity provision
- v3 introduced concentrated liquidity for capital efficiency
- UNI governance token for protocol decisions
Examples of Uniswap
Swapping ETH for USDC on Uniswap takes seconds and costs a few dollars on Layer 2. Providing liquidity to the ETH/USDC pool earns a share of trading fees proportional to your contribution.