A little bit about Uniswap
The project is a decentralized protocol where digital assets can be traded. It works on smart contracts on the Ethereum network. It is one of the TOP 5 best decentralized financial applications in which funds are blocked. An automated market maker and liquidity pools were implemented here for the first time.
The creator of the protocol is Hayden Adams. He was able to receive a grant from the Ethereum Foundation, thanks to which he was able to realize his concept. The amount was at that time 100 thousand dollars. the development was also carried out by specialists from Microsoft and Google, as well as independent programmers.
When Adams presented his Uniswap product, he highlighted several features:
- There is no central token.
- There is no commission of the site.
- There is no special attitude for beginners.
- The token listing is free of charge.
- The functionality of smart contracts is fully open.
- Users can independently improve smart contracts.
In fact, Uniswap is a decentralized exchange that operates on the Ethereum blockchain. At the same time, the protocol uses several smart contracts at once. Thanks to this, there is a direct trade between users. This is already a sign of a P2P platform. In general, we can say that Uniswap is a unique store for the sale of tokens.
Here they also give rewards to liquidity providers. The platform does not require registration or verification. A browser-based crypto wallet is enough to use the platform.
What is a liquidity pool?
The project is decentralized, and therefore there is virtually no administration that would control the work of the site. Therefore, the assets are added by the users themselves.
When depositing new assets (they can only be ERC-20), it is necessary to open liquidity pools. They represent a separate market for a specific crypto pair. To open a pool, tokens in a certain amount and a basic cryptocurrency of the ERC-20 standard are required. At the same time, their amounts should be equal.
Sellers and buyers do not contact the sites to set the price. Here the calculation is based on the equation x*y=k, where x and y are the number of coins in the pool, and K acts as a constant value. To better understand the work, you can study the pricing mechanism of AMM (automated market maker).
Each token is assigned a smart contract, as well as at least one pool. At the same time, if the user deposits assets into it and freezes them, he can receive remuneration from commission fees.
UniswapX Liquidity Aggregator
The essence of the liquidity aggregator is that it allows the user to choose the best value of an asset from that offered by liquidity providers. In fact, the program collects market applications from several sites at once. This allows users to find the minimum spread.
The Uniswap development team announced that it has launched the aggregator in beta mode on Ethereum. However, it will soon be expanded to other crypto networks and directly to the Uniswap wallet. At the same time, the developers did not say when they would launch the full version.
In fact, experts promised to create an inter-network version of the protocol. The aggregator has one key feature — the absence of gas when executing transactions. The authorization of off-chain orders will be available to swappers. Payment of fees on their behalf will be carried out by so-called "fillers". There will also be no commission for outstanding transactions.
At the same time, the "fillers" introduce a gas fee into the total cost of the swap. Additionally, they can reduce transaction costs by combining multiple orders. As a result, a competitive environment will be formed, allowing you to achieve the most optimal quotation.
UniswapX will not be modified or suspended from developer actions. The control over the assets will be carried out by the users themselves.
