Among the many exchanges out there for crypto, Uniswap stands out as one of the largest names in the field. While not a centralized exchange like Coinbase or Kraken, Uniswap handles a lot of trade volume every day. In addition to this, Uniswap has its own token with some functionality in the application.
But, what are these functions? How easily can you get into holding Uniswap? Let’s take a look at what Uniswap is and how a payment processor like iDEAL can make buying Uniswap’s token easy.
Uniswap isn’t like most of the other cryptocurrencies that you see on the top 50 by market cap charts. While many coins and tokens on these lists represent the exchange of value within a blockchain, Uniswap is instead a token originally built on the Ethereum blockchain thanks to its ERC-20 token creation protocol.
However, it’s easy to get this token mixed up with the protocol of the same name. The Uniswap protocol is an automatic market maker (AMM) that manages and helps create markets between trading pairs of cryptocurrencies. By using smart contracts, coded agreements between two parties on the blockchain, Uniswap can automate the trading that happens on its platform.
Users that participate in the protocol can lend their coins and tokens to the protocol, rather than trading them. By doing so, the user receives liquidity pool tokens that represent their share of the pool. Whenever a trade happens between the pair of cryptocurrencies submitted, the user receives a portion of the fees proportional to their share of the pool.
By creating and maintaining these smart contracts, Uniswap is one of the most well-known decentralized finance (DeFi) protocols both on the Ethereum blockchain and the crypto space as a whole.
The Uniswap token (UNI) acts as a governance token for the Uniswap protocol. As a governance token, UNI is utilized by users that want to have a say in how the protocol conducts itself and moves forward. This participation by holders of the Uniswap token is part of what makes Uniswap a decentralized platform.
Otherwise, the Uniswap token doesn’t do much right now. Unlike other AMMs, Uniswap doesn’t reward liquidity providers with its native token as an incentive to use its ecosystem. Competitors further incentivize folks to use their protocol by having higher payouts as they mint more of their tokens.
This payout structure is what makes Uniswap different. Because Uniswap doesn’t have to pay its token out to liquidity holders, the Uniswap token doesn’t see much minting of new tokens. With a fixed supply, the price of Uniswap can go up or down based on market forces and sentiment rather than risking supply inflation exceeding demand.
As a governance token, UNI has a use case in helping decide what direction the Uniswap protocol goes. To do this, several steps have to happen:
In other words, creating a community proposal and getting it to pass is similar to passing a law in a legislature of some kind. The proposal receives heavy reviews from thousands of users to ensure that the proposal will benefit the overall system. One false move with a proposal can result in the loss of revenue or service, so users are careful to check out new ideas.
With the advent of smart contracts, decentralized governance has allowed users of all kinds to band together to create and maintain working ecosystems for their cryptocurrency. This voting mechanism where you commit held coins or tokens to a proposal exists across all kinds of projects, not just Uniswap.
While they might not be clear at first, there are some solid advantages to going the decentralized route with cryptocurrency governance:
However, the decentralized nature of these protocols means that there are some drawbacks native to them:
For now, we will have to wait and see if these decentralized governance tools continue to work or not for Uniswap and the other decentralized protocols out there. Many of these protocols have their own rules and values to better match the protocol’s goals. Time will tell which models work out in the long run.
If you’re interested in investing in Uniswap, the easiest way to do so is by buying Uniswap with iDEAL for yourself. Most centralized exchanges let you connect a checking account or another payment processor.
However, both options tend to take a few days to connect and have funds deposited into your account. iDEAL lets you use your credit card or debit card to get funds into your crypto exchange account faster and make the funds readily available for you.
To use iDEAL, you’ll want to follow these steps:
Uniswap shares its protocol name with its token, abbreviated as UNI. This token allows holders to participate in governance and community proposals meant to improve the function and performance of the Uniswap ecosystem.
Payment processors like iDEAL make buying into tokens like UNI easy by allowing you to use your credit card to add funds. Try using iDEAL today to get into the wonders of UNI!
Make sure you have an account with Knaken. You can register in the app or at the registration page. Then verify your personal data, and you are ready to buy Uniswap.
You can select Uniswap in the app or web portal, choose an amount and immediately make the payment with, for example, a credit card.
Yes, at Knaken you can easily buy Uniswap with, for example, iDEAL, credit card or Bancontact. Check all options on our fee page.
You can find the current price of Uniswap at the top of this page.
At Knaken we believe it is important to be as transparent as possible to our customers about the costs that are charged. It is possible to look into the costs for every purchase or sale of Uniswap.
Take a look at our costs page for more info.
At Knaken, safety comes first. For years we have ensured that you can not only buy crypto securely on our platform, but also store it.
Search for Uniswap in the app or web portal and select “deposit” in options. Here you will see the deposit address where you can send the crypto. Make sure you deposit Uniswap from a wallet address that has been verified with Knaken.
Yes, search for Uniswap in the app or web portal and select the withdrawal button in options. Please note that you can only withdraw Uniswap to a verified wallet address.