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WHAT IS UNISWAP TOKEN?

Fri Jul 09, 2021 4:35 pm

What is Uniswap?

Uniswap is a DEX (Decentralized EXchange or Decentralized Exchange), which allows you to exchange your cryptocurrencies for others, using smart contracts on the Ethereum network. This fact already tells us one thing: Uniswap works with Ethereum ERC-20 tokens . Let us remember that an ERC-20 token is a type of standard token within Ethereum and of these types of tokens there is a great variety. In fact, there are currently more than 420,000 different ERC-20 tokens on Ethereum, which gives us an idea of the huge ecosystem that exists. It is precisely this point, which led Uniswap to its immense success: there is an immense community that needs this exchange functionality and, if you can make money with it, all the better.

However, as Uniswap only works with ERC-20 tokens, it is severely limited in functionality. For example, you cannot make direct exchanges using other cryptos, such as Bitcoin or Bitcoin Cash.To overcome this limitation, other projects have dedicated themselves to creating ERC-20 tokens that represent these other cryptocurrencies. To do this, 1: 1 anchored ERC-20 tokens are created with that specific crypto, or using other means. A good example of this is RenBTC, where RenBTC is an ERC-20 token anchored 1: 1 with the value of Bitcoin, and guarded by a decentralized network of nodes. Thus, each RenBTC token can be exchanged 1: 1 with BTC (except for a small commission) and, you are sure that it will always be like that.


What is the UNI or Uniswap Coin token?


The arrival of competitors like SushiSwap (a Uniswap clone), with its application of yield farming thanks to its SUSHI token, made the SushiSwap community respond, and the best response was to launch its own token: the UNI token or Uniswap Coin. Thus, on September 16, 2020, Uniswap announces the launch of this new token designed on three fundamental points:

Offer a new reward mechanism for participating in Uniswap pools and services.

To More: https://www.blockchainx.tech/erc20-token-development

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