Uniswap transaction history how to#

Why would you want to do this? Arbitrage.įlash swaps incentivize arbitrage traders to balance prices on Uniswap with prices in the outside market. This is all achieved through smart contracts that will cancel trades if you don't meet these conditions. Uniswap flash swaps are similar to Aave flash loans - which let you withdraw all the liquidity of any ERC20 token provided you return or pay for the withdrawn ERC20 tokens with a corresponding pair. The UNI token gives you the ability to vote on key decisions for the Uniswap platform. You can however trade UNI tokens on Uniswap, as well as buy, sell and stake them on other protocols and exchanges. You used to be able to earn UNI tokens by providing liquidity on Uniswap - but this changed with Uniswap V2. At the time of writing, UNI is priced around $11, but it’s had historical highs of $40 or more. Uniswap has a native governance token - UNI. So when you want to receive your transaction fees, you’ll exchange your liquidity pool token(s), which will be burned, and you’ll receive your original capital back, alongside your accumulated fees. These liquidity pool tokens increase in value based on the transaction fees within the pool. When you provide liquidity on Uniswap, you’ll be given a liquidity pool token in return - which is also an ERC20 token. It’s usually set at 0.3%, but can go as high as 1% for rarer trading pairs and as low as 0.05% for stablecoins. This fee is proportional to the amount of liquidity you’ve provided. Once you’ve done this, you’ll earn a liquidity provider fee.

When you contribute to a liquidity pool on Uniswap, you’ll need to contribute an equal value of the two tokens (like in our example). Once it has this, anyone can trade the tokens or contribute to the liquidity pool. Each token has a smart contract and a liquidity pool. What can you do on Uniswap?Īny ERC20 token can be listed on Uniswap - currently there are more than 50,000 trading pairs. Once you’ve connected a Web3 wallet to Uniswap - you can trade ERC20 tokens and add and remove liquidity, as well as make flash swaps. To access Uniswap - you’ll need a Web3 wallet. Meanwhile if someone sells examplecoin for ETH, the supply of examplecoin increases and the prices goes down.Īs you can see from this equation, the more liquidity there is in a pool - the less price slippage there will be when trades are made. In our example, if someone bought examplecoin with ETH in our liquidity pool, the supply of examplecoin decreases and the price goes up. This equation uses supply and demand to determine the price of a particular token. X and Y represent the quantities of two tokens in a given liquidity pool, while K is the constant value. Instead of matching buyers and sellers to trade these tokens and determine the price of a token, Uniswap uses a constant equation: For example, $10 in ETH and $10 of examplecoin. All they need to do is launch a new Uniswap smart contract by creating a liquidity pool and funding it with the token(s) and the equivalent value of the token(s) in another cryptocurrency. It’s this mechanism that makes Uniswap work the way it does.Īnyone, anywhere can add a token to Uniswap. It does this using a pricing mechanism known as a constant product market maker model. Uniswap attempts to do the opposite of this and function as a public good in the crypto space - letting investors trade tokens with no third party or platform fees. In general, centralized exchanges (and some decentralized exchanges) are designed to make money by taking fees. Uniswap is an Ethereum-based dex that lets crypto investors trade ERC20 tokens, without needing a third party centralized exchange like Coinbase or Binance.

Uniswap transaction history how to#

We’ve got everything you need to know in our Uniswap guide including how Uniswap works, how to trade on Uniswap and Uniswap taxes.

But as with all things crypto - your tax office will want to know about it. Now in V3 with a daily trading volume of $7 billion, Uniswap lets you buy, sell and trade ERC20 tokens - as well as offering capital-free arbitrage opportunities through flash swaps. Uniswap was one of the first decentralized exchanges to launch on the Ethereum network and quickly became a firm favorite, inspiring a range of other competitors.