Rather than working with a centralized order book, Uniswap works with liquidity pools. This provides a wide range of advantages to users in the crypto market.
- It does not require Know-Your-Customer (KYC) verification: you do not need to register, sign up or provide private information to the platform
- It is fully decentralized: there is no centralized authority controlling the transactions or systems
- Lower fees for swapping tokens
- Every single project can list its token and provide liquidity
- Fiat currencies are not supported: you cannot buy tokens using your local currency. However, ERC-20 stablecoins are supported.
- It does not support Bitcoin (BTC) or currencies that are not based on the Ethereum blockchain.
There are several tokens that can be traded on this platform. This is very useful for investors and traders that want to have access to a wide range of digital currencies from all over the world.
If you want to start trading using Uniswap, you will be able to do so by getting connected to your Metamask wallet. Other wallets are also supported but Metamask is one of the best solutions right now to get connected to Uniswap.
Uniswap is a very simple platform with a very easy-to-use interface. The first thing you can see when you enter the site is the “Launch App” button at the top right of the screen.
This would allow you to open the exchange where you will be able to swap your coins. As you can see in the image below, you will only have to click on “Connect to a wallet” in order to start using the services. Remember that as this is a decentralized platform, you do not have to provide an ID. You will be represented by your wallet address (Metamask).
As you can see, you can easily start trading funds. You can exchange your ETH tokens (or any other coin you select) for a wide range of ERC-20 coins supported by this platform.
Slippage tolerance is going to be one of the most important things. It means that when they give you a quote for purchasing an asset, the price of the asset you are using may drop. This could affect the number of coins you would receive afterwards.
Let’s say that you want to buy 45 USDT for 0.1 ETH. If you have 1% Slippage Tolerance, that means that you are willing to take a loss of up to 1% if the price changes. If you put a large number in the Slippage Tolerance section, this may cause problems in the future. In our example, a 1% drop would mean that you could accept 44.55 USDT rather than 45 USDT.
You can also activate the expert mode solution (which gives you some other possibilities) or even the dark mode interface. Once you are happy with your transaction, you can click on Swap. The funds will appear in your Metamask wallet.
(TO EMBED: https://www.youtube.com/watch?v=Y8m_MapzTsM&feature=youtu.be)
If this is your first attempt at cryptopedia, we recommend starting at the beginning and working your way through like a book.
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