UNI- Introduction Details
Uniswap is the first automated market-making transaction protocol built on the Ethereum blockchain.
Build a trustless and highly decentralized financial infrastructure.
In the blockchain world, it is necessary to reshape the centralized business model in a decentralized way. Exchanges are only part of it. At the same time, centralized exchanges are facing power supervision, hackers stealing coins, and exchanges themselves. Other risks, especially asset control rights are not in the hands of ordinary users. For the concept of disintermediation and trustless third parties, decentralized exchanges are an indispensable part of a more encrypted world. Before Uniswap launched the AMM automatic market-making model, the DEX (decentralized exchange) field continued the traditional order book market-making and over-the-counter market-making models, and could not support a large number of users in terms of transaction speed and transaction depth. At the same time, There is also a lack of incentive models.
Uniswap is an Ethereum-based protocol designed to facilitate automatic exchange transactions between ETH and ERC20 token digital assets (any ERC20 transaction pair is supported after the release of the V2 version). Uniswap is fully deployed on the chain, and any individual user can freely deposit tokens for exchange and free withdrawal, without the registration, identity verification and withdrawal restrictions of centralized exchanges.
Uniswap supports any individual user to issue ERC20 tokens on Uniswap and create a corresponding fund pool. When a certain ERC20 token fund pool (ETH and ERC20 transaction pool or ERC20 and ERC20 transaction pool) is created, the platform encourages all parties to participate Exchange in the same fund pool, and give the first liquidity provider to provide liquidity in this contract the right to set the exchange rate between this ERC20 token and ETH (or ERC20 token) The provider gives all transaction fees (0.3% of the transaction volume). When the exchange rate in the fund pool is inconsistent with the larger market, there is room for arbitrage. At this time, arbitrage traders can smooth out these spreads by moving bricks to keep the exchange rate consistent with the broader market. After that, all liquidity providers will use the exchange rate at the time of recharging as the basis for calculating equivalence.
There are two types of smart contracts in Uniswap:
Transaction contract: A transaction contract supports one ERC20 token, and each transaction contract reserves a certain amount of ETH and the supported ERC20 token. The transaction contract can also realize the direct transaction between one ERC20 token and another ERC20 token.
Factory contract: can be used to deploy new trading contracts. Any ERC20 token that does not have a trading contract on Uniswap can use the factory contract to deploy a trading contract, that is, ERC20 tokens can be issued on Uniswap.
Uniswap's asset liquidity:
Uniswap uses the liquidity of reserves to realize the exchange of digital assets on the agreement. The reserves in the trading contract are provided by many "liquidity providers". These liquidity providers deposit equivalent ETH and ERC20 tokens into this transaction contract. The first liquidity provider to provide liquidity in this contract has the right to set the exchange rate between this ERC20 token and ETH. When there is room for arbitrage in exchange rates, arbitrageurs move bricks to smooth out the spreads in different markets.
Uniswap's liquidity provider will capture transaction fees:
After the liquidity provider adds liquidity to the Uniswap pool, the trading contract will mine and send "liquidity tokens" according to its proportion in the fund pool. These tokens are the share of record liquidity providers. If someone adds liquidity to the fund pool, new tokens will also be mined, and if someone withdraws from liquidity, the mined tokens will be destroyed, so that the relative proportion of each liquidity provider is consistent. The income of the liquidity provider comes from transaction fees, which are currently 0.3% of the transaction volume, and these transaction fees will be distributed to the liquidity provider in proportion.
Uniswap [Automatic Market Maker (AMM)] mode, which puts two certain amounts of encrypted assets in a smart contract, and automatically calculates the transaction price of tokens based on the automatic market maker algorithm.
The point of the algorithm is that no matter how much the transaction volume is, the product of the amount of the two assets exchanged is maintained as a constant, that is, the constant product market maker. The formula is x*y = k, x and y are the number of tokens in the liquidity pool, and k is the product. In order to keep k constant, x and y can only vary in opposite directions. At the same time, liquidity providers that provide liquidity to automated market makers (AMM) may see their pledged tokens lose value. This risk is called [Impermanent Loss]. Simply put, impermanence loss refers to the difference in value between tokens held in AMM and tokens held in their own wallet. This happens when the token price in AMM deviates in any direction. The greater the deviation, the greater the loss of impermanence.
UNI's initial liquidity mining plan will be officially launched at 08:00 on September 18, 2020, Beijing time. The first phase will run until 08:00 on November 17, 2020 Beijing time. The four liquidity pools of ETH/USDT, ETH/USDC, ETH/DAI and ETH/WBTC on Uniswap v2 will support UNI mining.
In the first stage, each fund pool will receive a total of 5,000,000 UNI, which will be allocated to liquidity providers in proportion to the provision of liquidity. That is, each pool will be allocated 83,333.33 UNI rewards per day. There will be no lock-up period for this part of the rewarded UNI.
Token distribution and release:
15% for community airdrop;
2% is used for liquidity mining.
(Community airdrop: 15% of the initial supply of UNI tokens will be distributed to the Uniswap community through airdrops, 10.06% of the supply will be provided to historical users, and 4.92% will be allocated to stock liquidity providers (according to the liquidity provided by users in the past) Proportional distribution), users of existing SOCKS can claim 0.02%.
Liquidity mining: Uniswap distributes another 2% of UNI tokens to the community through liquidity mining. Anyone can use one or more of the four pools: USDT/ETH, USDC/ETH, DAI/ETH and WBTC/ETH One provides liquidity to farm UNI tokens (more liquidity pools may be added after 30 days). During the period from September 18th to November 17th, 2020, 5 million UNI will be allocated to each fund pool and allocated to liquidity providers in proportion to the liquidity provided. )
Release within four years:
The governance database will retain 43% of the UNI supply;
Team members and future employees will receive 21.51% of the UNI supply;
Investors (i.e. Uniswap early venture investors) will receive 17.80% of the UNI supply;
The consultant will receive 0.69% of the UNI supply.
(The official release schedule has not been publicly disclosed.)
From January 8th to April 30th, 2020, a team of 6 engineers audited Uniswap V2 smart contracts. (Previously, the team was responsible for MakerDAO's smart contract development and formal verification, and completed the implementation and formal verification of multi-guarantee Dai.)
The reason why people believe that UNI has value is essentially because of Uniswap's leading position in the DEX field. Although UNI is the governance token of the protocol, it has potential future possibilities.
The selling pressure of the team and investors is relatively high, and AMM market making has the risk of gratuitous loss and contract vulnerability risk.
UNI currently only has a governance role, which is to govern tokens. All transaction fees generated on Uniswap have not been used to destroy UNI and are not given to UNI holders.
The current Uniswap fees are mainly obtained by liquidity providers. At present, the liquidity provider not only captures all transaction fees, but also obtains UNI token incentives for liquidity mining of the four main trading pairs.
In the short term, according to the governance plan, a portion of the Uniswap agreement transaction costs may be allocated to UNI, allowing UNI to capture part of the cost value, thereby stabilizing its price support.
In the long run, the realization of the integration of the interests of liquidity providers and token holders enables UNI to capture all the cost value, while the benefits of liquidity providers are realized through UNI itself. This is a win-win situation for liquidity providers, UNI holders, project parties, and ecological partners. However, the formation of this situation requires the joint efforts of the community and needs to be advanced from all aspects, which is difficult to achieve in the short term. What can be achieved as soon as possible in the short term is to give part of the transaction fees to UNI token holders.
Full name: Uniswap
UNI/USDT transaction: https://www.gx.com/trade/UNI USDT
Official website: https://uniswap.org/
Block explorer: https://cn.etherscan.com/token/0x1f9840a85d5aF5bf1D1762F925BDADdC4201F984
White paper: https://uniswap.org/whitepaper.pdf
Smart contract: 0x1f9840a85d5aF5bf1D1762F925BDADdC4201F984