Uniswap is the first decentralized token exchange protocol built on Ethereum, allowing users to swap tokens directly without relying on a centralized exchange. The protocol uses liquidity providers (LPs) who deposit tokens into liquidity pools. Trades for token pairs are facilitated by automated market makers (AMM), and LPs earn transaction fees in return for providing liquidity. Any ERC-20 token can be listed on Uniswap as long as there is sufficient liquidity.
Launched in 2018 by Hayden Adams, Uniswap has become the largest and most popular decentralized exchange. It has facilitated more than $2 trillion in trading volume and recorded over 250 million transactions. During the 2021 DeFi boom, Uniswap even surpassed Coinbase in trading volume, and it consistently processes billions in weekly trading volume across Ethereum, Polygon, Arbitrum, and Optimism.
In 2023, Uniswap introduced Uniswap V4, which brought several significant improvements: Hooks allowing developers to customize AMM pools with dynamic fees; Singleton Architecture reducing gas fees up to 99% for pool creation; Native ETH Support saving users gas fees; and UniswapX protocol ensuring the best possible prices for users.
In April 2024, Uniswap received a Wells notice from the SEC, indicating potential legal action. Uniswap has strongly contested the SEC's actions, arguing that its decentralized protocol does not fit the current legal definitions of an exchange or broker-dealer.
Above are only for introduction, not intended as investment advice.