Last year, the usage of Uniswap exploded. The decentralized exchange is now an established name in the crypto world, with over $500 billion traded on it. Last weeks, we discussed the expectations of Ethereum, Cardano and Dogecoin for 2022. Today, we discuss what to expect from Uniswap in 2022.
Table of contents
- What is Uniswap?
- Uniswap Price Chart
- Uniswap Price History
- Uniswap roadmap 2022
- What to expect in 2022?
Uniswap is a decentralised exchange and is also known as a DEX. Their platform was launched on Ethereum's mainnet on 2 November 2018. As a DEX, Uniswap facilitates trading between ERC20 tokens, which are tokens issued on Ethereum's blockchain. On Uniswap, tokens from Chainlink, Tether and Aave are tradable.
By using smart contract technology and a simple user interface (UI), users can connect to web 3.0 wallets, such as Metamask. This allows you to trade crypto-currencies easily from your internet browser.
Uniswap will only be tradable from 2020, which means that the coin of Uniswap, called UNI, does not yet have a long price history. Despite Uniswap's relatively young price history, its price has already established itself in the top 20 cryptocurrencies in terms of market capitalization.
In 2020, a new bull run unofficially began and Uniswap took full advantage of that momentum. Because Uniswap was the first DEX to work so well, the price rose by thousands of percent within a short period of time. To put the price developments of the past two years into perspective, we have compared the all-time highs and all-time lows.
- Uniswap price 2020: Lowest - € 0,150 / Highest - € 8,750
- Uniswap price 2021: (so far): Lowest – € 4,148 / Highest - € 48,125
1/— Uniswap Labs 🦄 (@Uniswap) October 25, 2021
🚀 Over the weekend, the Uniswap Protocol passed $500B in total trading volume since its launch in November 2018. pic.twitter.com/zJeidQRhyz
Since May 2021, Uniswap is officially called Uniswap v3, which means the third released version of Uniswap. Uniswap v3 offers many new features for the DEX but before we go into that, let's have a quick look back at the previous versions, v1 and v2.
Uniswap was not the first DEX, but it was the first DEX based on the Automated Market Making (AMM) protocol. In the AMM protocol, transactions take place by means of smart contracts and liquidity pools. A mathematical formula then determines the price of the tradable assets. Liquidity providers add liquidity to the pool so that there are enough currencies to be traded.
Uniswap v1 soon proved a success, but there were flaws. The user interface and experience were not well optimised. In addition, users had to pay a high transaction fee when they wanted to trade between ERC-20 tokens.
Uniswap v2 solved these problems by improving the interface and user experience. In addition, ERC-20 pools were added to the platform, allowing users to now trade between ERC-20 tokens for a much lower fee.
The second version of Uniswap also implemented important functionalities, such as price oracles, flash swaps and protocol fees. The protocol fees are very important for the development of Uniswap, as 0.05% of all transactions go to the development of improvements for the platform.
Uniswap has become extremely popular in a short period of time, and this has ensured that the development team had a well-stocked pot to make improvements. The most important thing they have added in v3 is Concentrated Liquidity.
Concentrated Liquidity allows liquidity providers to construct unique price curves based on their preferences. This centralizes the liquidity pools to some extent but, in return, increases liquidity at the desired prices.
Uniswap has developed a protocol that is accessible to users with low transaction fees (unlike Ethereum transaction fees). In addition, they continue to use 0.05% of the transaction fees to further develop the platform. This makes Uniswap a very interesting platform as soon as more users from developing countries and the like join, because of the low fees.
Uniswap has recently gained some formidable competition. Dexes such as Sushiswap and Pancakeswap, which, funny enough, almost bear the same name, have entered the market. In a number of areas, they operate better than Uniswap, for example in terms of transaction speeds.
In addition, Uniswap suffers from the high gas fees on the Ethereum network. Because of this, transaction costs are sometimes bizarrely high, which makes trading tokens more tedious. This makes Uniswap dependent on Ethereum's roadmap. As mentioned in our Ethereum forecast, Ethereum is now in the process of developing Ethereum 2.0, which should solve major problems such as skyrocketing gas fees. Should the implementation of Ethereum 2.0 be successful, it will provide an additional boost to Uniswap's platform and its value.