After cryptocurrency, DeFi (Decentralized Finance) is the next big thing in the crypto world. As cryptocurrencies became more popular and powerful, trading them also picked up speed, leading to the growth of DeFi exchanges that made the exchange of crypto coins freer and faster.
To understand the UNI or Uniswap token, you first need to know about decentralized exchanges (DEXs). So here goes!
In short, a decentralized exchange (DEX) is a place where users can trade their crypto coins without intermediaries. Unlike a centralized exchange (such as Binance), users are not bound by or limited by exchange rules. They hold or control their own coins and are entirely responsible for their security.
Also, every transaction is written on the block and done via smart contracts, whereas a centralized exchange holds your keys. While they are easier to navigate for first-time users and linked to traditional banking systems, they are also prone to hacks.
As they operate outside the regulated ecosystem, users do not need to give any personal information.
There are no centralized hot wallets falling prey to hackers, and no one except the user has the private keys. These features of DEX showcase the absolute ‘control and privacy’ of the blockchain ecosystem. The token is always in the user’s control, and they alone are responsible for its safety.
DEXs make token mining and trading almost instantaneous. Users can mint and swap new tokens quickly and use these to grow their value – all on one platform.
As users on DEXs, like Uniswap, can trade tokens directly with each other, there are no middlemen involved, which leaves out any arbitrary management fees on transactions.
Uniswap is an Ethereum-based decentralized exchange (DEX) that allows anyone to swap ERC20 tokens. It launched its own token UNI in September 2020. It crossed the $100 billion in trading volume in early 2021 and now regularly trades $1 billion on a daily basis.
It was launched towards the end of 2018 by Hayden Adams, who was a mechanical engineer at Siemens before creating the Uniswap. Uniswap attracted investment from several famous venture capitalists such as Andreessen Horowitz, Square Ventures LLC, and Paradigm Venture Capital, as well as support and capital from the Ethereum Foundation.
Uniswap and its design are closely linked to Ethereum as its foundational platform. It capitalizes on Ethereum’s universal open-source model to build a truly decentralized exchange. Alignment to Ethereum also gives it some of the standard features of the platform, such as privacy-first, value-based ecosystem, open access to all, no censorship or control, and reduced overhead costs.
In less than 2 years after its launch, Uniswap rolled out V2 in May 2020. The update was an iteration on its original on-chain blockchain model. The upgrade allowed direct ERC20 to ERC20 swaps and added support for incompatible ERC20 tokens like and some other technical touch-ups to make it more attractive and boosted Uniswap price prediction.
Uniswap V3 launched in May 2021 and added a whole bunch of new features to the DEX. We must here mention ‘concentrated liquidity’ that makes it cheaper for traders to participate and allows for the generation of NFTs or non-fungible tokens based on LP positions, turning them into “blockchain art”.
Uniswap price has taken the crypto world by surprise by emerging as the most popular decentralized exchange (DEX). While there are several other prominent players in the same market, such as SucshiSwap, 1inch, and PancakeSwap, Uniswap has several big advantages over its competitors.
The most crucial factor in its success is of providing liquidity directly from liquidity providers (LPs). Most DEXs have a core problem –the lack of liquidity. This translates into a lack of amount of ready money in the exchange to make trading faster and more efficient.
By allowing users to swap ether (ETH) for any ERC-20 token directly via smart contracts, Uniswap has solved one of the key problems of decentralized exchanges.
On Uniswap, digital assets are linked as pairs instead of individual coins. Other exchanges match buyers and sellers to determine prices and finalize transactions. Uniswap, on the other hand, has a simple math equation: x * y = k and liquidity pools to facilitate the trade.
Anyone can trade any ERC20 token on Uniswap; users are free to list what they want to trade and can use the existing liquidity pool of that token. They can even create their own liquidity pools by adding an equivalent value of ETH and the ERC20 token being traded.
Launched in September 2020, to the surprise of the entire crypto community, UNI is essentially an on-chain governance token. UNI gives its owners or users the ability and the right to participate in the operational decisions of the platform. It also gives them access to the UNI community treasury, the protocol fee switch, eth ENS, the Uniswap Default List, and SOCKS liquidity tokens.
The total number of UNIs is capped at 1 billion UNI tokens, which will be mined and distributed over the next four years. 60% of tokens will be kept for distribution to the community, 21.5% will be allocated to Uniswap employees, and the remaining 18.5% will be distributed to investors and advisors.
At the launch, the UNI team airdropped 400 UNIs straight into the wallets of anyone who had used Uniswap prior to the September launch. From the distribution of 150 million UNI tokens, around 66 million were snapped up in the first 24 hours.
At present, the market cap of UNI tokens is around $12.6 billion. With Uniswap’s popularity – it controls close to 50% of the DeFi market – there are high hopes pinned on the UNI token as well.
As one of the biggest DEXs on the Internet (Uniswap is the biggest DeFi project in the world and has $2.94 billion locked in), Uniswap’s users will naturally gravitate towards UNI to facilitate their transactions and also to get a chance to shape the future of the platform.
UNI was launched in 2018 at around $2.80 and immediately (in two days) doubled in value to $5.50. At its launch, UNI’s total value was around $50 million, and it saw a 9x increase in 36 hours. It started off with a big boost when Coinbase listed it on its Pro trading platform just hours after its launch.
UNI started the year 2021 a bit under $5 per coin. However, the entire cryptocurrency market went on an upward streak, and UNI benefited as well. Along with other crypto coin’s high marks, UNI also touched its highest value ever at $44.69 on 2 May (1000% gain).
Naturally, a price correction followed, and UNI’s price dropped for a few weeks – touching $15 per coin – before bouncing back and settling at around $25.
Uniswap Price prediction from industry experts is positive. Due to UNI’s parent platform’s popularity and a surge in demand and adoption of dApps, crypto gurus have pegged UNI as a valuable and stable crypto coin. They expect Uniswap price to grow steadily over the coming years.
Wallet Advisor’s forecast predicts that UNI price may reach $90 at the end of December 2021 on a wave of market sentiment. Other UNI fans are openly talking about UNI price prediction that see it continuing its bull run and touching $200 by 2023.
Gas fees, the ETH you pay to trade on an Ethereum’s network, can take out big percentage chunks from any trade. This can add up to become big numbers and give competitors like Binance chain-based PancakeSwap a leg up. If the competition becomes more attractive Uniswap price could be significantly affected.
Most governments are waking up to the power of DeFi, blockchain, and cryptocurrency, and regulation of the sector is being widely discussed. Any upcoming changes in regulation could have an impact on DEXs. Uniswap has an advantage in this area as it is based in the US, where the current regulators are crypto-friendly. Also, Uniswap is working proactively to swing the tide in its favor by allocating 1-1.5 million UNIs towards funding a “political defense” unit to lobby on its behalf.
There is no doubt that the UNI has a lot going for it. Being linked to the biggest and most popular DeFi platform can only give it a stable and long-term future. For investors, it is an attractive buy as Uniswap price is not prohibitively expensive to own and is predicted to see a constant increase in value. All in all, UNI price has gained over 270% since the start of this year and is likely to keep climbing up.
If you are interested in investing in UNIs, then you can find it listed on our cryptocurrency exchange. You can visit CoinCasso’s platform to check out UNI and other cryptocurrencies and use our easily navigable platform to manage your crypto coin portfolio.
At CoinCasso, we also have a detailed selection of How-to guides covering major currencies in detail. So, do spend some time in these sections and make your investment decisions more robust and confident.
DeFi is still a growing market with tons of untapped potential waiting to power a fresh surge. UNI has already breached the $40 mark, and with even the most modest of gain Uniswap price prediction 2021, one can be reasonably sure that UNI will breach the $100 mark very soon.
The next 3 -4 years will see some fluctuation in the overall cryptocurrency market. Much like the past few years, Uniswap price will yo-yo between big highs and sudden drops, but all in all the crypto market will keep inching upwards. If no big negative regulation disrupts the market, UNI might just enter a period of sustained growth and easily cross the $100 mark by 2025.
As always, there are two sides to the argument – the optimistic side looks at Uniswap’s meteoric rise and the growth potential of the DeFi ecosystem and can easily see UNI topping the $1000 mark. On the other hand, it seems unlikely for UNI to jump from its current $25 range to $1000 in the next few years. However, only time – and the vagaries of the crypto market – will tell.
In the notoriously unstable world of cryptocurrency, UNI is as good and safe an investment as possible. Linked to a leading platform with a market cap of over $12 billion and with a loyal base of investors, the token will undoubtedly rise and remain profitable for some time to come.
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