Uniswap

Uniswap (UNI) is the governance token of the Uniswap Protocol, the most widely used decentralized exchange (DEX) on Ethereum. The protocol was created by Hayden Adams and launched in November 2018; the UNI token followed in September 2020, when it was famously airdropped to every wallet that had ever used the protocol. UNI holders can vote on key decisions such as treasury spending and protocol upgrades.

How Uniswap works

Uniswap pioneered the automated market maker (AMM) model at scale. Instead of matching buyers and sellers through an order book, it lets anyone deposit pairs of tokens into liquidity pools; prices are set algorithmically based on the ratio of assets in each pool, and traders swap directly against that liquidity. Liquidity providers earn a share of trading fees in return. Successive protocol versions refined this design — Uniswap v3 introduced concentrated liquidity, letting providers allocate capital to specific price ranges, and v4 added customizable pool logic through hooks.

UNI itself is an ERC-20 token secured by Ethereum's Proof of Stake network. Its primary function is governance: proposals and votes determine how the protocol and its substantial treasury evolve. The token launched with a total supply of 1 billion, distributed over several years to the community, team, investors, and advisors.

Role in the ecosystem

Uniswap is core infrastructure for decentralized finance. Its open, permissionless pools allow any ERC-20 token to be traded without a listing process, and the protocol has been deployed across many networks, including Arbitrum, Optimism, Polygon, BNB Chain, and Unichain, a Layer 2 network developed by Uniswap Labs. Trading volume on the protocol regularly rivals that of large centralized exchanges, making UNI one of the most prominent governance tokens in DeFi.