UNI is the token of the Uniswap project (ERC-20 standard), which determines the right of its holder to participate in the project management. The number of votes a user has depends on the number of UNIs he owns. The token will be released in the fall of 2020.
Uniswap is a decentralized liquidity protocol based on the Ethereum platform; a set of open-source smart contracts to form liquidity pools and exchange ERC-20 tokens, removing intermediaries, order books, censorship and verification.
Liquidity pools are provided by liquidity providers. This mechanism solves the liquidity problem, because traders do not have to wait for a counteroffer in the market, as in traditional DEX.
Uniswap coin price chart: why will the value grow?
The Uniswap coin price chart has positive upward trends. It is an automated market maker based on the Etherium constant product formula, i.e. DEX, that applies a mathematical formula to determine the price of an asset. There are three types of users:
- liquidity providers;
- developers (that use the Uniswap functions to invent new DeFi instruments).
There are several types of providers:
- Passive — place their assets in liquidity pools.
- Professional — use market instruments and create pools for DeFi projects.
- Token projects — create a liquid market for their own token.
To become a liquidity provider, you just need to deposit an equal amount of two tokens into a smart contract of a trading pair, which is a liquidity pool, through a wallet that supports this function (for example, MetaMask). All this guarantees the growth of Uniswap price charts in the future.
Traders from website like letizo.com can buy tokens on Uniswap by paying a certain commission (currently 0.3%; the amount will change in the future), which is divided between the liquidity providers as a reward, in proportion to their participation in the total pool.
Categories of traders:
- Users of dApps — they buy tokens on the Uniswap platform in order to use them later to work with other Ethereum-based platforms and projects.
- Speculators — they use the capabilities of the ecosystem to exchange tokens and make money on it.
- Arbitrage Bots — make profits by comparing prices and trading on different platforms; help level out token prices in the market.
- Smart contracts.
The activity of traders contributes to the accuracy of prices because, thanks to arbitrage, the prices in pairs more accurately match the market, as well as stimulating liquidity.
Uniswap price charts: perspectives and forecasts
Uniswap is the leading decentralized exchange in the Ethereum ecosystem and has the highest trading volume among decentralized exchanges, and even occasionally surpasses Coinbase. Nevertheless, the project’s governance, token economics and roadmap problems have been noted.
If the transition to Uniswap V3 is successful, liquidity providers are expected to bear less risk and earn more from their assets. There is a view that this could trigger another rise in the UNI token exchange rate. To date, however, these expectations have not yet been met.
Uniswap is constantly evolving, expanding functionality and management mechanisms. Thus, in May 2021, Vitalik Buterin made a proposal to make the UNI token an oracle token for the community and believes that the project has a chance to surpass Chainlink.
In general, Uniswap (UNI) coins are predicted to have a good future. In the five-year outlook, they predict the growth of the price of the UNI cryptocurrency to $270. Experts believe that the high capitalization and liquidity allows UNI to enter the number of the most “safe” investments. As an alternative you can consider the Vechain live price chart. According to the latest data, Vechain price prediction is very positive.