On November 30, 2022, the Uniswap decentralized exchange (DEX) announced that users can now trade NFTs on its native protocol. What makes Uniswap different from other NFT marketplaces is that you can use any token on the Ethereum blockchain to purchase Uniswap NFT.
So, what is Uniswap? How can I use it? How does the Uniswap NFT aggregator work? That’s what this article discusses. So, read to the end and learn everything about Uniswap NFT.
What is Uniswap?
Uniswap is a protocol that runs on the Ethereum blockchain with a peer-to-peer system that allows users to trade NFTs and cryptocurrencies.
Uniswap is the first and the most used decentralized exchange on Ethereum, with a total value locked (TVL) of over $5.18 billion.
Uniswap is facilitating interoperability between blockchain networks and DApps. It is powered by smart contracts running on Ethereum as well as other blockchain networks such as Polygon, Celo, Arbitrum, Polkadot, and BNB Chain via the Moonbeam Network parachain.
Blockchain technology makes transactions completely secure, transparent, and immutable. Additionally, Uniswap’s code is open source, so anyone can view it and contribute to its development.
How Uniswap Works
To buy or sell an asset on the traditional centralized exchanges, the exchange looks for someone on the other side of the trade who matches your order. The transaction may be completed within seconds, or days, or never take place at all.
Uniswap works differently as there is no order book. Instead, the protocol uses an automated market maker (AMM) to offer liquidity and act as a counterparty for all trades. AMM is basically a smart contract that holds many assets and lets users trade them without the need to rely on a third party.
However, it’s worth noting that the Uniswap DEX is in constant development. Until 2023, it had launched 3 versions with key updates. In June, the protocol announced it was working on Uniswap v4 to implement updates that will welcome community development. Each Uniswap version brought changes in how the industry interacts with DEFI transactions.
What is Uniswap NFT?
Since late 2022, Uniswap users have been able to trade Ethereum-based NFTs and cryptocurrencies. In June 2022, Uniswap announced the purchase of the NFT marketplace Aggregator Genie.
With the Uniswap NFT marketplace aggregator, traders can get more listings at the best prices from major NFT marketplaces across Web3.
Uniswap’s UNI Token
The UNI token is the native token of the Uniswap protocol. The token was launched to decentralize the governance of the protocol and give power back to the community. Although Uniswap was launched in 2018, the UNI token was launched in September 2020 with Uniswap v2. The token reached an all-time high of $43.37 in May 2021 and an all-time low of $2 in September 2020. At the time of writing, the token was trading at $4.850 on CoinMarketCap.
UNI token holders can vote and submit their own proposals and take part in the governance of the protocol. Additionally, the UNI token holders receive discounts on trading fees. The more UNI tokens you hold, the more the discount you receive. You can also stake your UNI tokens to earn yields in popular protocols such as Compound.
How Can I Receive UNI Tokens?
Once your wallet is ready, you can purchase UNI tokens from any trusted centralized or decentralized exchange. You can pay with fiat currency or cryptocurrency. By keeping your crypto in your wallet, rather than on a centralized exchange account, you will have real ownership of the tokens. The security of the tokens will also depend entirely on you as you possess the keys to the wallet.
It is also possible to purchase the UNI tokens on Uniswap.
Another way to receive UNI tokens is by offering liquidity to the Uniswap protocol. It lets you earn a portion of the trading fees as a reward.
How to Buy Uniswap NFT
In late 2022, Uniswap expanded from the world of DEFI to the NFT space. You can now use the Uniswap NFT marketplace aggregator to explore the prices of your favorite collectibles on different marketplaces. Thus, it is now easier to buy NFTs at the best prices compared to manually comparing their prices on different platforms.
It is also possible to sweep the floor of a collection, that is, buy as many cheap NFTs from a collection as you can. The following are the steps necessary for you to buy a Uniswap NFT on the Uniswap NFT marketplace aggregator:
Step 1: Visit the Uniswap DApp and connect your crypto wallet. Simply click the “Connect” button at the top-right corner. The Uniswap NFT marketplace aggregator supports different NFT wallets, including Uniswap Wallet, MetaMask, WalletConnect, and Coinbase Wallet.
Step 2: Open the NFT marketplace aggregator page.
Step 3: Explore the various NFTs listed on the platform and choose the Ethereum-based collection of your choice.
Step 4: Find the NFT of choice from the collection and click “Add to bag.”
Step 5: Add as many NFTs to your bag and complete the purchase process.
How to Swap Tokens on Uniswap
You may have to swap tokens to buy Uniswap NFT. Uniswap provides the easiest way for exchanging Ethereum-based tokens. The interface is also very simple.
You simply have to connect your crypto wallet and choose which and how many tokens you need to swap.
Note that Uniswap uses the v3 interface by default for all swap and liquidity transactions. However, the previous interface is still available and you can use it if you wish.
How to Provide Liquidity on Uniswap?
If you desire to earn some UNI tokens or you just want to help the community, you can add liquidity to Uniswap. It is as easy as swapping tokens. The following are the steps on how to provide liquidity on Uniswap:
Step 1: Go to Uniswap.
Step 2: Click the “Connect” button on the top-right corner to connect your Web3 wallet.
Step 3: Click “Pool” from the top of your screen.
Step 4: Click the highlighted “Add Liquidity” button.
Step 5: Choose the two token inputs that you want to provide, that is, DAI and SAND, or ETH and MKR.
Step 6: Indicate the amount that you want to provide. The value of one input should be equal to that of the second input. For example $100 in DAI and $100 in SAND.
Step 7: Click “Supply.”
Note that liquidity providers are required to pay a confirmation fee to enable Uniswap to tap into their tokens, which is a one-time fee.
Is the Uniswap NFT Aggregator Safe?
Yes. Uniswap is powered by smart contracts that run on the Ethereum blockchain, making it a very safe platform. Transactions running on the platform are also transparent and immutable, thanks to blockchain technology. When compared to other exchange and DeFi platforms, Uniswap is less likely to be hacked or censored.
However, this does not mean that buying Uniswap NFT on the platform is easy or damage-proof. Just like with any other blockchain project, you are responsible for the safety of your assets. That is why you should not trade more than what you can afford to lose. Also, keep your digital assets in a secure wallet.
You should also stay aware of NFT scams using Uniswap’s name to defraud victims. For example, in 2022, there was a phishing scam in which people lost digital assets worth $8 million thinking they were competing for UNI drops.
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