What is Uniswap?
Uniswap is a decentralized protocol based on Ethereum, designed to facilitate the exchange between ETH and ERC20 tokens.
In a decentralized exchange, by adding a user address in the exchange menu of Uniswap, any encrypted asset can be easily transferred to the platform. The simplification of this process paves the way for legal DeFi projects to be easily imitated. Unfortunately, many users fall into this trap because the platform does not have a mechanism to prevent fake listings.
The automatic clearing protocol Uniswap increases this ratio because the DeFi project is built on Ethereum. Like every platform, the popularity here has increased the appetite of those who want to make improper profits, and the number of such people is also increasing.
According to data provided by DeFi Prime, different discussions have taken place in Uniswap to prevent these people who imitate legitimate projects and try to induce users to replace their assets with worthless cryptocurrencies.
Uniswap's early success can be attributed to its decentralization and simplicity of decision-making.
One of the most meaningful designs is Uniswap's token model. It has no token. Compared with Bancor, which also provides a liquidity agreement, creating Uniswap transactions does not require filling out forms on the website or equity pledge tokens. Instead, users can use ETH to freely create transaction pairs as reserved tokens, thereby eliminating friction and improving decentralization.
Uniswap's design is not necessarily better than 0x's link to order in every situation. -It's just different, it has its own trade-offs and priorities. All transactions in Uniswap run on-chain, making them more susceptible to front-end operations and order conflicts. This means that others can monitor incoming orders on the blockchain and use that information for monetization.
In addition, Uniswap's large orders (as opposed to liquidity reserves) will cause a large amount of slippage costs due to its market-making model, and its market-making model can guarantee tradable prices. However, since trade contracts are carried out on the chain, Uniswap is completely decentralized and does not require trust. By providing a single price without having to analyze the depth of the order book,
Uniswap exchange can easily interact with decentralized applications and users.