UNI/USD: Convert Uniswap (UNI) to United States Dollar (USD)

Uniswap (UNI) is a decentralized trading protocol that aims to keep token trading automated and open to anyone who holds tokens. It is known for its role in facilitating automated trading of decentralized finance (DeFi) tokens. Uniswap strives to improve the efficiency of trading compared to traditional exchanges by solving liquidity issues with automated solutions. In September 2020, Uniswap introduced its own governance token, UNI, which added the potential for profitability and the ability for users to shape its future. This is a key aspect of decentralized entities, as it allows for shared community ownership and a vibrant, diverse, and dedicated governance system.

Uniswap operates as an automated market maker (AMM), a type of decentralized exchange protocol that relies on a mathematical formula to price assets. Instead of using an order book like a traditional exchange, assets are priced according to a pricing algorithm. Uniswap uses a formula that equalizes the value of the amount of each token in a liquidity pool. This formula aims to keep the product of the quantities of tokens in a pool constant. Uniswap also allows users to create a liquidity pool for any pair of tokens. The UNI token serves the purpose of enabling shared community ownership and allows UNI holders to participate in the governance of the Uniswap protocol in a neutral and trustless manner.

Uniswap aims to create liquidity, thereby facilitating trading and the value that trading provides for the DeFi sphere. It is not just a decentralized exchange; it seeks to solve the issues that platforms such as EtherDelta experienced with liquidity. By automating the process of market making, the protocol incentivizes activity by limiting risk and reducing costs for all parties. The mechanism also removes identity requirements for users, and technically anyone can create a liquidity pool for any pair of tokens. The UNI token allows holders to participate in the governance of the Uniswap protocol and wider ecosystem, contributing to the self-sustaining development of the ecosystem.

Uniswap was launched in November 2018 by Ethereum developer Hayden Adams. The platform's creation was informed directly by Ethereum creator Vitalik Buterin, who even ended up giving the protocol its name. Adams has stated that the original inspiration for the Uniswap platform came from one of Buterin’s own blog posts. In September 2020, Uniswap introduced its own governance token, UNI, which added the potential for profitability and the ability for users to shape its future. The total supply of Uniswap’s governance token, UNI, is 1 billion units, which will become available over the course of four years. After this period, Uniswap will introduce a “perpetual inflation rate” of 2% to maintain network participation.