Frequently asked questions
UNI is the primary token for the Uniswap DEX (decentralised exchange). UNI thereby is a governance token, meaning that UNI owners can vote on new developments and changes to the platform.
Uniswap is a decentralised trading protocol. It links hundreds of different Decentralised Finance (DeFi) applications, thereby creating a high liquidity market for trading ERC-20 tokens.
The developers describe the technology as an ‘automated liquidity protocol’. In practice, this means that Uniswap allows users to swap crypto tokens simply through the power of smart contracts, and without the need of an order book, central arbiter or authority,
Uniswap is, therefore, different from traditional exchanges and eliminates liquidity problems. Every order is fulfilled, because there’s a pool of coins available for purchase at an algorithmically-set price.
Nevertheless, Uniswap tokens can still be purchased through traditional, established crypto exchanges. You can invest in Uniswap without necessarily knowing much about how it works.
UNI is the name of native token of the Uniswap network. On most exchanges, you will see Uniswap referenced through this abbreviation. Its symbol is a little unicorn.
UNI is a so called government token. Owner of the UNI token allows you to have a say in the governance of the Uniswap platform. When new developments and structural changes are put forward, you have a right to vote on them, proportional to the amount of UNI tokens that you own. There are one billion UNI tokens, of which 150 million were airdropped in 2020 to anyone who had used the platform in the past.
An Ethereum wallet and some ETH is necessary to use the Uniswap protocol. Simply download the app and follow the instructions. However, you don’t need to actually use the Uniswap protocol to exchange UNI tokens, which can be traded via conventional exchanges.
Each trade incurs a fee of 0.3%, which goes to the liquidity pool (though liquidity providers can redeem them).
UNI is traded on exchanges which determine its price by matching buying and selling orders. If there are more buyers than sellers, the UNI price will rise.
That said, all cryptocurrencies are correlated fairly strongly. This is especially the case with UNI, whose function relies on the desirability and mainstream appeal of the crypto market. If more people are using crypto, then more people will be using the Uniswap network to do so. In theory, this makes governance decisions on the platform more significant, and therefore pushes up the demand for, and price of, the UNI token.
Uniswap's price, or more specifically the price of the UNI token, is determined solely by supply and demand. In this sense, it is similar to the price in a public company like Apple or Tesla. Uniswap's price rises if there are more buyers than sellers, and falls if there are more sellers than buyers.
You can buy Uniswap on most major exchanges. First register and verify your identity, and then fund your account via a bank transfer or debit card. Having done this, you can begin trading.
Getting started with crypto can be hard. Our detailed price comparisons and cryptocurrency guides have you covered.