Uniswap.io Cryptocurrency Review : A Formalized Model For Pooling Liquidity

by Cws Team
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About Uniswap.io 

Uniswap.io is a protocol for automated token exchange on Ethereum. It is designed around ease-of-use, gas efficiency, censorship resistance, and zero rent extraction. It is useful for traders and functions particularily well as a component of other smart contracts which require guaranteed on-chain liquidity.

Uniswap important feature of Uniswap is the utilization of a factory/registry contract that deploys a separate exchange contract for each ERC20 token. These exchange contracts each hold a reserve of ETH and their associated ERC20. This allows trades between the two based on relative supply. Exchange contracts are linked through the registry, allowing for direct ERC20 to ERC20 trades between any tokens using ETH as an itermediary.

Operating company

Exchange name Uniswap
Support 24/7
Withdraw Fee Free
Futures trading Present
Trading Fee 0.30%
Withdraw Fee 0.000812 BTC
Official site https://uniswap.exchange

Gas Benchmarks

Uniswap is very gas efficient due to its minimalistic design. For ETH to ERC20 trades it uses almost 10x less gas than Bancor. It can perform ERC20 to ERC20 trades more efficiently than 0x, and has significant gas reductions when compared to on-chain order book exchanges, such as EtherDelta and IDEX.

Exchange Uniswap EtherDelta Bancor Radar Relay (0x) IDEX Airswap
ETH to ERC20 46,000 108,000 440,000 113,000* 143,000 90,000
ERC20 to ETH 60,000 93,000 403,000 113,000* 143,000 120,000*
ERC20 to ERC20 88,000 no 538,000 113,000 no no

Liquidity Tokens

Liquidity tokens are minted to track the relative proportion of total reserves that each liquidity provider has contributed. They are highly divisible and can be burned at any time to return a proporitonal share of the markets liquidity to the provider.

Fee Structure

  • ETH to ERC20 trades
    • 0.3% fee paid in ETH
  • ERC20 to ETH trades
    • 0.3% fee paid in ERC20 tokens
  • ERC20 to ERC20 trades
    • 0.3% fee paid in ERC20 tokens for ERC20 to ETH swap on input exchange
    • 0.3% fee paid in ETH for ETH to ERC20 swap on output exchange
    • Effectively 0.5991% fee on input ERC20

There is a 0.3% fee for swapping between ETH Uniswap.io  and ERC20 tokens. This fee is split by liquidity providers proportional to their contribution to liquidity reserves. Since ERC20 to ERC20 trades include both an ERC20 to ETH swap and an ETH to ERC20 swap, the fee is paid on both exchanges. There are no platform fees.

ERC20 to Exchange

The additional functions tokenToExchangeSwap() and tokenToExchangeTransfer() add to Uniswap’s flexibility. These functions convert ERC20 tokens to ETH and attempts an ethToTokenTransfer() at a user input address. This allows ERC20 to ERC20 trades against custom Uniswap exchanges that do not come from the same factory, as long as they implement the proper interface. Custom exchanges can have different curves, managers, private liquidity pools, FOMO-based ponzi schemes, or anything else you can think of.

Uniswap Trading fees

Many exchanges charge what we call taker fees, from the takers, and what we call maker fees, from the makers. The main alternative to this is to simply Uniswap.io  charge “flat” fees. Flat fees mean that the exchange charges the taker and the maker the same fee.

This exchange charges a flat fee of 0.30% per trade. This is slightly above the global industry average (arguably 0.25%). So with respect to the trading fees, Uniswap has a decent offering.

Uniswap Withdrawal fees

There are exchanges out there that charge low trading fees but then hit you on your way out with high withdrawal fees. Because once you’re in, you can’t get out without paying withdrawal fees. This exchange, however, is on the opposite side of the spectrum. They only charge the network fees when you execute a transaction. The global industry BTC-withdrawal fee is 0.000812 BTC per withdrawal. The network fees vary from day to day but are roughly 15-20% of the global industry average BTC-withdrawal fee. Accordingly, when it comes to the withdrawal fees, this exchange has a competitive offering.

Deposit Methods

Uniswap does not accept any deposits of fiat currency. This means that the new crypto investors (i.e., the investors without any previous holdings of crypto) can’t trade here. In order to purchase your first cryptos, you need a so called entry-level exchange, which is an exchange accepting deposits of fiat currency.

Uniswap Security

Uniswap run all the exchange-websites in Uniswap.io  Mozilla’s Observatory-test . The score in such test is one of many indicators of the exchange’s security. Uniswap received an D+-score in this test. This is actually not a bad score, seeing as F is the Mozilla.

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