What is Uniswap?
Uniswap is a decentralized exchange (DEX): a set of smart contracts that lets people swap tokens directly from their own wallets, without a company holding their funds. The protocol was launched on Ethereum in 2018 by Hayden Adams, and is developed mainly by the company Uniswap Labs.
UNI is Uniswap's governance token, introduced in 2020. Part of the supply was given for free to people who had already used the protocol, a type of distribution called an airdrop.
How does it work?
Instead of matching buyers and sellers through an order book, Uniswap uses liquidity pools. These are pots holding two tokens, supplied by users called liquidity providers. When someone swaps, they trade against the pool, and a formula adjusts the price based on how much of each token is left. Liquidity providers earn a share of the trading fees.
UNI holders can propose and vote on changes to the protocol. In 2025, holders approved a proposal that turned on a protocol fee, so a share of trading fees now goes to the protocol, and linked it to a system that burns UNI, meaning tokens are permanently removed from circulation. Uniswap now runs on Ethereum and several other networks, including its own layer 2 network, Unichain.
What is it used for?
Anyone can use Uniswap without holding UNI. The token is mainly about steering the protocol.
- Voting on protocol upgrades, fees and treasury spending
- Delegating voting power to another address
- Trading on exchanges like other tokens
Key facts
- Protocol launched: 2018; UNI token launched: 2020
- Creator: Hayden Adams; developed by Uniswap Labs
- Consensus: no own consensus; secured by the networks it runs on, mainly Ethereum (proof of stake)
- Native blockchain: Ethereum (ERC-20 token)
Explainer written by Finvane from official project documentation. It is not investment advice.