Uniswap

Uniswap is the largest decentralized exchange (DEX) protocol on Ethereum and its rollups: a set of open-source smart contracts that let anyone swap tokens or supply liquidity without an account, an order book or a company holding the funds. Launched in November 2018 by Hayden Adams, Uniswap popularized the automated market maker (AMM) model that most DeFi exchanges now copy. This page explains how the Uniswap DEX works, what the UNI token does since the 2025 fee switch, who runs the project and which risks to keep in mind.

What Uniswap does

Uniswap lets a user trade one token for another directly from a self-custody wallet. Instead of matching buyers and sellers, each market is a liquidity pool funded by liquidity providers (LPs), who earn the trading fees paid by swappers. The protocol is deployed on Ethereum and on dozens of other networks; DefiLlama lists it on 49 chains as of October 2026, including Base, Arbitrum, OP Mainnet, Polygon, BNB Chain, Avalanche and Unichain, the project’s own rollup.

How the Uniswap DEX works

Each pool holds two tokens and prices them with a formula: when you buy one token, its share in the pool falls and its price rises. Version 3 (May 2021) introduced concentrated liquidity, letting LPs choose a price range to use their capital more efficiently. Version 4 (January 2025) moved all pools into a single contract and added hooks, plug-in contracts that can customize fees, orders or access rules for a given pool.

For traders, the main costs are the pool fee, network gas fees and price impact. For LPs, the main risk is impermanent loss: if prices move, the pool rebalances against them and they can end up with less value than if they had simply held the tokens.

The UNI token and its utility

UNI was launched in September 2020 with a maximum supply of 1 billion tokens. For five years it was purely a governance token. In December 2025, holders approved the “UNIfication” proposal: protocol fees switched on in stages, they accumulate in a contract, and anyone can claim them by burning UNI of equal value. 100 million UNI were also burned from the treasury. Governance can still mint up to 2% of supply per year, and there is no native staking.

Governance

Changes follow a three-step process: a request for comments on the forum (at least seven days), a Snapshot temperature check that needs 10 million UNI in favour, then an onchain vote with a 40 million UNI quorum and a two-day timelock. Holders can vote directly or delegate. In practice a few hundred addresses decide most votes, which concentrates influence among large delegates.

History and key dates

• November 2018: Uniswap v1 goes live on Ethereum.
• May 2020: v2 adds direct token-to-token pools; August 2020: $11M Series A led by a16z.
• September 2020: UNI launch and airdrop to past users.
• May 2021: v3 and concentrated liquidity.
• October 2022: $165M Series B led by Polychain Capital.
• February 2025: the SEC closes its investigation without action; Unichain mainnet launches.
• December 2025: UNIfication passes; protocol fees and UNI burns begin.
• 2026: fees extended to more chains and to v4 pools; launches on Robinhood Chain and Arc.

Security and risks

No exploit of the core Uniswap contracts has been reported. Version 4 went through nine audits by firms including OpenZeppelin, Trail of Bits, Spearbit and Certora, plus a $15.5M bug bounty. The real-world losses have come from phishing: fake front ends, malicious ads and signature scams. Other risks to know:

• Smart contract risk: hooks are written by third parties; a pool with a faulty hook can lose funds.
• Token risk: anyone can create a pool, so scam tokens and lookalike tickers exist.
• Oracle risk: the core AMM needs no price oracle, but protocols that read Uniswap prices can be manipulated on thin pools.
• Regulatory risk: the SEC dropped its probe in 2025 and a US class action was dismissed in 2026, but rules for DeFi front ends keep evolving.

Our risk score is 2 out of 5: a long record and heavy auditing, offset by phishing, hook and scam-token risks.

How to use Uniswap safely

• Type the address yourself (app.uniswap.org) and bookmark it; never follow ads.
• Check the token contract address before buying, and set a reasonable slippage limit.
• Read what you sign: unlimited approvals and Permit2 signatures are a favourite tool of scammers.
• Start small if you provide liquidity, and learn impermanent loss first with our DeFi guide.