Uniswap V2 is a decentralized cryptocurrency exchange (DEX). As the name suggests, it's the second iteration of the Uniswap platform. The protocol is a swap that allows customers to directly exchange ERC-20 tokens on the Ethereum blockchain. There are no KYC requirements for users.
Uniswap V2 is considered to be one of the most popular DEX services on Ethereum. Unlike traditional centralized exchanges, the Uniswap V2 cryptocurrency exchange is a liquidity protocol. Token swapping is trustless and peer-to-peer. Uniswap services are restricted in several countries, including Syria, Iraq, and North Korea.
The Uniswap V2 crypto exchange is known for the large number of listed assets that users can swap. Overall, there are more than 1,300 coins and tokens available for trading. This accounts for over 2,400 Uniswap V2 trading pairs. In comparison, V1 offers more than 500 coins and 1,100 trading pairs.
Uniswap is an automated market maker (AMM). Unlike the first version, which only supports ETH/ERC-20 swapping, the Uniswap V2 cryptocurrency exchange supports swapping between different ERC-20 assets, including stablecoins, without additional measures to facilitate a bridge.
All iterations of Uniswap run simultaneously and aren't at risk of being shut down. Instead, the liquidity migrates between each version to ensure continuous access to the resources. Users can decide which version provides their preferred swaps. Uniswap V2 crypto price and liquidity may differ from the other versions.
The system is powered by Ethereum-based smart contracts. Leverage and margin trading services are unavailable on the Uniswap V2 crypto exchange. Instead, token swapping is the main service provided. One of the core upgrades from Uniswap V1 was the introduction of Flash Swaps. It's an equivalent of a Uniswap V2 spot exchange.
Flash Swaps enable users to withdraw an unlimited amount of ERC-20 tokens. The key condition is that the trader covers the total Uniswap V2 crypto price for the asset, as well as gas and platform fees. All flash swaps are atomic. This means that if a swap fails to follow through, all funds are reverted to their initial holders.
Customers can provide liquidity to any ERC-20/ERC-20 Uniswap V2 trading pair. Since it's a decentralized service, users can list tokens for trading without restrictions, as long as there is liquidity to support them.
Liquidity provider fees are the only type of Uniswap V2 exchange fees that users must pay. The rate is fixed at 0.3% for token swapping. Liquidity providers receive proportional shares of the collected fees based on their contributions to the pools.
There are no protocol fees. However, the project team has stated in the documentation that 0.005% Uniswap V2 crypto fees may be introduced in the future if required. The implementation of this rate would affect the rewards that liquidity providers receive. Protocol fees are calculated to avoid increasing gas fees.
The Uniswap V2 crypto prices are determined by automatically calculating the funds in the liquidity pool. It uses the constant product formula, which states that the ratio of bought tokens must match the amount of deposited assets. This formula applies to all Uniswap V2 trading pairs.
In addition to the swap service, the Uniswap V2 crypto exchange also provides more than 300 integrations and API tools for DeFi developers. It also has Oracle services which facilitate the off-chain data transmission to the blockchain.
About the Company
The first iteration of Uniswap was launched in November 2018. The project was created by Hayden Adams. The Uniswap V2 crypto exchange upgrade was released in May 2020. Uniswap V3 was launched a year later, in May 2021. The Uniswap Labs company headquarters are registered in New York, NY.
In September 2020, Uniswap launched UNI. As a decentralized platform, Uniswap is governed by its decentralized autonomous organization (DAO), which is made up of UNI token holders. The governance members vote on protocol changes and either approve or reject changes related to all Uniswap iterations.
In May 2021, a year after its launch, the Uniswap V2 trade volume was valued at roughly $20 billion. Its performance was overtaken by V3 several months after the new platform's launch. Nevertheless, the Uniswap V2 cryptocurrency exchange protocol hasn't been discontinued.
In May 2022, it was reported that the Total Uniswap volume, including the Uniswap V2 trade volume, surpassed $1 trillion. According to data provided by Uniswap Labs, the average trade value increased 120 times, from $200 to $24,000.
Additionally, roughly 80% of the trade volume was accumulated throughout 2021 and the first half of 2022, meaning that the Uniswap V2 volume, as well as the performance of V3, played a massive role in the company's growth.
Hayden Adams is the CEO at Uniswap Labs. He has a degree in Mechanical Engineering from Stony Brook University. He became interested in Ethereum and decentralized finance while employed as an engineer for Siemens after Karl Floersch, the current CTO of Optimism PBC, sent him an article by Vitalik Buterin.