Definition
Uniswap is a decentralized exchange (DEX) concept and protocol that allows users to swap ERC‑20 tokens directly on-chain without relying on a centralized intermediary. It is built around smart contracts that define liquidity pools, where pairs of tokens are deposited and priced algorithmically. Instead of matching buyers and sellers through an order book, Uniswap uses a mathematical formula to determine token prices based on the relative balances in each pool.
As a core DeFi primitive, Uniswap serves as foundational infrastructure for many other protocols and applications. It is often integrated with platforms like Aave or Curve to provide routing for token swaps or to source on-chain price information. The protocol’s design focuses on permissionless access, composability with other DeFi systems, and transparent, verifiable on-chain liquidity.
Context and Usage
Within the broader DeFi ecosystem, Uniswap represents a shift from centralized exchange models to fully on-chain, smart contract–driven markets. Its liquidity pool mechanism enables any participant to supply tokens to a pool and, in return, receive a proportional claim on trading fees generated by swaps in that pool. This structure underpins many staking-like reward designs, even though the underlying mechanics differ from traditional staking.
Uniswap frequently acts as a primary liquidity venue for assets that later integrate with other DEX platforms such as Curve or GMX. Because pricing and liquidity are determined algorithmically and recorded on-chain, Uniswap pools are widely used as reference markets for token valuations across DeFi. The protocol’s open, composable nature makes it a central concept in understanding how decentralized exchanges and liquidity provisioning function in Ethereum-based finance.