Since the beginning, the finance industry has relied on centralized exchanges. The underlying models that facilitate the functioning of cryptocurrencies work in a central model. While most people are familiar and comfortable with centralized models, many are also aware of the drawbacks of these models. Many are now looking for decentralized models that don’t require them to trust third parties with their finances.
Decentralized Finance (DeFi), is here to help. Decentralized finance, as the name implies, is a way of conducting financial transactions in a decentralized fashion, without central authorities. Many projects have attempted to make the concept a reality, including decentralized exchanges. The decentralized exchange platforms allow users to trade cryptocurrency directly from their wallets. It facilitates peer-to-peer (P2P), transactions. There are many decentralized exchange platforms, also known as DEXs. They aim to offer the best and most efficient DeFi services. Uniswap is one such platform. Although listing tokens on Uniswap can be done easily, it requires technical knowledge.
What is Uniswap?
Hayden Adams created Uniswap, a decentralized exchange protocol built on Ethereum that allows users to swap ERC20 tokens. It is an automated liquidity protocol that functions in a way that does not follow the traditional order book model. It allows users to trade tokens and swap them without intermediaries, thereby ensuring high levels of decentralization.
Uniswap, one of the most popular DeFi projects, is free to use and does not charge any fees. It is an open-source tool that removes the middlemen from the process. Token pools are used to determine prices and there are no listing fees or platform fees. If there is a liquidity pool, any ERC-20 token can also be launched on Uniswap.
Uniswap, in simple terms, is a platform that allows users to exchange tokens directly from wallets. It does not require custody or intermediaries. Uniswap allows you to use smart contracts to:
- swap tokens
- add liquidity/ provide liquidity
- Remove liquidity from a pool
What does Uniswap do?
Uniswap uses two components to counter the traditional “order book” architecture that many crypto exchange platforms use.
- Liquidity Pools
- Constant Product Market Maker Protocol
Liquidity Pools
Liquidity pools are token pools that are locked in smart contracts. They facilitate trading by providing liquidity. Many decentralized exchange platforms make use of liquidity pools.
Constant Product Market Maker Protocol
Constant product market maker protocol (AMM) is an example of a well-known automated marketplace maker (AMM). Automated market makers are smart contracts that have liquidity pools. The liquidity providers fund these pools so traders can trade against them. In return for trading against these pools, traders pay a fee that is divided between liquidity providers according to their shares. The constant product maker protocol works in a similar way. It also has the advantage of allowing any token to be added to Uniswap if it’s funded with the same value as the ERC20 token or ETH.
How do I list a DeFi token in Uniswap?
There are a few things you need to do before you can list your DeFi token at Uniswap.
Install MetaMask
- Your ERC20 token contract can be deployed to the Ethereum mainnet
- Your ERC20 token contract can be deployed to the Ethereum mainnet
- Your ERC20 tokens can be sent to your MetaMask account
Matthew Haws 