On the 2nd November, the protocol Uniswap came onto the Ethereum network and it serves as an automated token exchange, comprised of a series of ETH to ERC20 in order to give users the ability to easily swap their ERC20 tokens. There is one contract for each ERC20 token and if a contract doesn’t exist for a certain asset then anyone will be able to create one using the Uniswap factory.
The protocol was designed with the idea of simplicity in mind and eliminates unnecessary middlemen which allow for a simpler and quicker exchange. It’s an open-source public good for the Ethereum community without an associated token. It’s also free to list any token on the platform and no one is given any special treatment, early investors, developers included. In fact, the project is committed to being an accessible resource for traders and liquidity providers.
According to the Uniswap Docs:
“Designed with simplicity in mind the Uniswap protocol provides an interface for seamless exchange of ERC20 tokens on Ethereum. By eliminating unnecessary forms of rent extraction and middlemen it allows faster, more efficient exchange. Where it makes tradeoffs, decentralization, censorship resistance, and security are prioritized.
Uniswap is open source and functions as a public good. There is no central token or platform fee. No special treatment is given to early investors, adopters, or developers. Token listing is open and free. All smart contract functions are public and all upgrades are opt-in.”
The new protocol has been compared to Bancor by a few users on Twitter. Nevertheless, the creator of Uniswap, Hayden Adams has stated that the platform was different in that tokens are joint up with Ethereum and not a specific protocol’s native digital currency such as Bancor with BNT. in addition to this, Adams said that the formula is gas efficient, and, easier to use.
Another user on Twitter compared the platform to 0x despite Adams saying Uniswap being an alternate approach to swapping that is more decentralised and censorship-resistant. Overall, followers did seem to be excited about the launch of the protocol.
As reported by ETH News, if we look back to August, the project was awarded a hundred thousand dollars during the third wave of the Ethereum Foundation grants. They were under the category ‘building for the end user’ and the funds have basically helped this protocol to become a reality.
What are your thoughts? Let us know what you think down below in the comments!