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How To Use Uniswap In Depth Analysis part 3 of 4

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How To Use Uniswap: In-Depth Analysis (part 3/4)

While the previous parts of the guide talked more about the premises of the platform and what it’s used for, this part of the guide will be a bit more practical, as it will explain how to actually use the Uniswap exchange.
How to use Uniswap
Uniswap is an open-source protocol, which means that anyone could create their own application for it. However, most people just use the already created ones, with https://app.uniswap.org and https://uniswap.exchange being the most popular.

While stepping into the DeFi sector might sound daunting, using Uniswap is quite straightforward. First off, you will need to go to the Uniswap interface and connect your Ethereum wallet, such as MetaMask or Trust Wallet. After you’ve done that, you will have the option to select the token you would like to exchange from and to. By clicking swap, the transaction pop-in window will show up.

After confirming this transaction request in the wallet, the transaction will start on the Ethereum blockchain and can be trackable via https://etherscan.io/.
As we mentioned in our previous articles, if you want to earn income from Uniswap, you would need to deposit two tokens of equivalent value to the pool.

Uniswap’s market position

Before using Uniswap, we need to know how does it compare to other decentralized exchanges. Uniswap is by far the leading decentralized exchange in terms of both volume and liquidity, and rivaling even centralized exchanges in that regard. It stands on the cusp of topping $10 billion in monthly traded volume. The traded volume in September only stands at over $9.9 billion, accounting for around 66% of all DEX trading volumes.

Uniswap’s success can mostly be attributed to the ease of liquidity provision. The protocol’s liquidity has steadily increased since the start of 2020, while it has recently seen several enormous spikes due to liquidity mining events from competing forks such as SushiSwap.
Uniswap’s user base has grown in sync with the DeFi boom of 2020, which makes sense as this protocol is a foundational component of the overall DeFi infrastructure due to it having integrations across hundreds of applications.
Despite extremely strong competition from its recently launched fork SushiSwap, Uniswap outperforms SushiSwap from both a volume and liquidity perspective.

Summary

Uniswap is an innovative decentralized exchange protocol built on the Ethereum network. It allows anyone that has an Ethereum wallet to exchange tokens without any involvement of any central party.
While it certainly does have its limitations, this new technology may have some exciting implications for the future of decentralized, trustless token swapping.

For information on Uniswap’s UNI token, check out our next part of the Uniswap in-depth guide series.

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