A Step-by-Step Guide For Beginners

There are several ways users can start using Uniswap DEX such as MetaMask wallet, Have faith in wallet and Coinbase wallet.

How to use UniSwap: A step-by-step guide for beginners

Uniswap Decentralized Exchange (DEX) is the most popular DEX built on the Ethereum blockchain. For users wondering, “What is Uniswap?”, this article provides an overview of what it is and how it works as well as some ways users can get started using Uniswap. DEX.

With Uniswap, users can swap crypto tokens without having to depend on an intermediary. Not having to depend on a third party results in no economic rent. Instead, Uniswap relies on smart contracts to execute transactions. Smart contracts are algorithms that execute themselves after certain preset conditions are met.

How does Uniswap work?

Because Uniswap is an open source protocol, many DEXs with the “swap” suffix have been launched. These protocols are essentially copies of the original Uniswap source code. The difference between them is in the graphical user interface (GUI) as well as the difference and positioning.

The most famous – and most controversial – of these clones is Sushiswap. After copying Uniswap’s source code, it proceeds to launch a vampire attack. A vampire attack is where a DeFi protocol offers various incentives to liquidity providers. A vampire attack aimed at draining liquidity from the target protocol.

How does Sushiswap achieve a successful vampire attack? The platform kicked off an aggressive marketing campaign. They also make it easy for Uniswap liquidity providers to switch. In the end, they came up with extremely attractive bonuses to make it well worth their time.

Another less controversial example is Pancakeswap. This DEX lives on the Binance Smart Chain. Pancakeswap offers non-edible tokens (NFTs) and offers profitable farming opportunities, which Uniswap does not.

Even so, Uniswap is the first DEX based on the automated market maker (AMM) model, rejecting the traditional open book model. The open book model is not DEX-friendly due to, among other factors, liquidity issues. In contrast, the AMM model uses a liquidity pool with a constant product market maker model and therefore relies on a Constant Product Formula:

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It is worth noting that in version 1 or v1 of Uniswap, liquidity pool providers run the risk of impermanent loss. In other words, it’s best to look at v1 as a minimally viable product that has been released for beta (or even alpha) testing.

With each iteration, Uniswap presented significant improvements to users. For example, v2 introduced oracles and UNI tokens were airdropped. UNI Token is the official governance token of Uniswap DEX. Uniswap users received these airdrop tokens if they used the platform before September 2020.

For v3, the most notable improvement has come in the form of centralized liquidity. This novel form of liquidity allows liquidity providers to set the conditions under which they will receive their fees.

Furthermore, v3 of Uniswap has been released on the Optimistic Ethereum network. Optimistic is a layer two scaling solution that outperforms Ethereum’s layer one. Its main benefits include reduced slippage and high fuel fees as well as near-instant transaction speeds.

So how to buy coins at Uniswap? Before diving into how to use Uniswap, it is important to answer the question: Is it safe to use Uniswap? Are smart contracts, blockchain technology and Decentralized Finance (DeFi) safe? These are the technologies on which Uniswap is built.

The Ethereum blockchain is extremely secure, unless there is a vulnerability to exploit. For example, Uniswap was exploited in the past with a first-time attack, but the bug has since been resolved (thus making Uniswap stronger in the long run). And since then, liquidity and trading volume have only increased dramatically, and significantly.

Now let’s see how people can use this platform.

How to use Uniswap?

Users who want to learn how to trade on Uniswap have many options at their disposal. This section demonstrates how to use Uniswap with mobile devices and Trusted Wallet and Coinbase wallet.

But first, the steps on how to use Uniswap protocol with Metamask will be discussed. This section then presents the steps for two mobile-friendly approaches.

Remember that Metamask is also mobile-friendly. However, as a web wallet that functions as a browser extension, its usability experience is flawless on Desktop, with no competition. This is why, for Metamask, this article focuses on the desktop experience.

How to use Uniswap with Metamask?

The steps to use Uniswap with Metamask are listed in the image below:

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How to use Uniswap with Coinbase?

Coinbase’s approach may be less intimidating for US citizens who are already familiar with the platform. First-time users should initiate the steps below after successfully opening a Coinbase account. Those who already have an account can start with Step 1.

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How to use Uniswap with Believe in Wallet?

Have confidence in Wallet is one of the most popular mobile wallets and there’s a reason for that. Believe in Wallet is easy to use, user-friendly and offers a wide range of tools for users. Here are the steps to use Uniswap with Believe in Wallet.

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An important deterrent for new Uniswap users is the excessively high Uniswap fees. Because Uniswap lives on the Ethereum blockchain, it relies on ETH for gas fees. Due to Ethereum’s design, greater congestion leads to higher gas fees as it fuels a bidding war between users competing to get their transaction first into the next block.

To avoid failed transactions, please consider going to Settings on Uniswap. (The user can do so by clicking on the gear icon.) Before making a trade, the user should adjust the slip tolerance down to about 12%.

Slippage is simply the difference in price from the time of confirmation of the transfer at the price that the seller is willing to accept. Adjusting for slippage ensures that user transactions run first. Running first increases the chance that the transaction will be included in the next block.

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