What is the Uniswap Exchange, and How Does It Work?
A Complete Overview of Uniswap Exchange In the rapidly evolving landscape of decentralized finance (DeFi), Uniswap has emerged as a prominent player, revolutionizing the way we trade cryptocurrencies. For professionals looking to dive into this exciting space, understanding Uniswap and how it works is crucial. So, let's explore the fundamentals. What is Uniswap? Uniswap is a decentralized bitcoin exchange mechanism based on the Ethereum blockchain. Unlike traditional exchanges that rely on order books and centralized intermediaries, Uniswap operates entirely through smart contracts, enabling users to swap ERC-20 tokens directly from their wallets. How Does Uniswap Work? 1. Automated Market Maker (AMM) Model: Uniswap operates on the Automated Market Maker (AMM) model. Instead of relying on buyers and sellers to create liquidity and determine prices, Uniswap uses liquidity pools. 2. Liquidity Pools: Users can participate in these liquidity pools by depositing the same value of...