Uniswap posted an ROI of over 300% by December 2021. It has also posted one of the fastest ascents towards becoming the 23rd largest cryptocurrency with a live market capitalization exceeding $8 billion.
Over the past decade, the advent of blockchain technology has paved the way for a wide range of cryptocurrencies, decentralized finance (DeFi) protocols, and digital asset exchanges. Decentralized exchanges (DEX) such as Uniswap have made headlines and streamlined the way people transact crypto, all thanks to their advanced technology, unique functionalities, and offerings.
Uniswap has undoubtedly fueled the growth of the DeFi sector over the past year, and investors have staked over a billion dollars in cryptocurrencies on the leading DEX. This is just one of the reasons that make Uniswap (UNI) a potential millionaire-maker coin.
Before we talk about Uniswap's potential as an investment, let's take a look at what Uniswap is, the factors that could make it a stellar investment, and a bit about its price history. Currently, Uniswap is nearing its all-time high, and every prediction suggests that it could go even higher.
Uniswap: What Is It?
Uniswap is a decentralized exchange built on the Ethereum blockchain. Decentralized exchanges allow investors to swap cryptocurrencies without creating an account, as with centralized digital asset exchanges such as Coinbase or Binance. The platform transacts more than a billion dollars in cryptocurrencies daily, making it the most used decentralized exchange in the world.
Uniswap token (UNI) is an ERC-20 token, meaning that the platform uses Ethereum's blockchain to process transactions instead of its own. Various cryptocurrencies use the Ethereum blockchain, including most non-fungible tokens (NFTs). One of the significant benefits of Ethereum over Bitcoin is its smart contract functionality. Smart contracts allow developers to build valuable protocols on Ethereum, such as Uniswap.
There are many advantages of using Uniswap when compared to traditional crypto exchanges. Investors using Uniswap can swap their cryptocurrency holdings directly from their Ethereum wallets, eliminating the need for exchanges to have custody over their funds. This significantly reduces the risk of exchange hacks, adding a layer of security that regular centralized exchanges cannot achieve. Furthermore, investors do not have to create an account to use Uniswap, allowing them to trade digital assets anonymously.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Is Uniswap (UNI) A Millionaire Maker Investment?
Uniswap is currently the top Ethereum-based decentralized exchange in terms of trading volume and the number of users. The exchange plays an essential role in advancing adoption and innovation across the crypto sector. Notably, the platform witnessed record growth this year. Uniswap's market capitalization saw a whopping surge of over 60% in 2021.
Since Uniswap is decentralized, no single entity controls the exchange. After popular stock brokerages such as WeBull and Robinhood suspended trading of Gamestop (GME) after its recent price surge, more attention has been paid to Uniswap as trading of assets cannot be halted there. This is because no one company or individual controls the exchange.
Uniswap's native token, UNI, is called a governance token because it gives holders the right to vote on new improvements and changes to the platform, including how minted tokens should be distributed to the community as well as any modifications to fee structures.
UNI kickstarted 2021 priced at $5.031. It skyrocketed by over 181.06% and is currently trading at $14.14. UNI's historic price movements and growing market cap make it an ideal millionaire-maker asset.
Read also: Uniswap vs. Binance: Which Is the Better Exchange?
Could Uniswap Be A Millionaire Maker Coin
Various factors affect the price of Uniswap UNI, including the platform's unique features and offerings. These factors come together to make Uniswap a viable option for investors. Below are some factors that could make Uniswap a millionaire-maker.
1. Liquidity
Did you know that any project can seed a liquidity pool using Uniswap? A developer has to provide their project token and a corresponding value of ETH to start a pool. This open strategy of Uniswap allows new projects to release their crypto tokens directly to the market and attract the attention of a wider audience.
The added liquidity also helps in solving the problem of high spreads for illiquid assets on order-book exchanges. New protocols can seed liquidity pools and strengthen investor confidence in the project while providing ROI opportunities through arbitrage trades.
2. Security and Privacy
Uniswap is an open-source project that has undergone a thorough review by the development community. All the smart contract coding on the platform is secure, and the exchange is non-custodial, so hackers gain no profits from attacking it. Nevertheless, investors must be wary of scammers when using the platform.
Decentralized exchanges provide users with more privacy protection than centralized exchanges. The protocols of DEXs are permissionless, require no KYC (know your customer), and allow users to trade without registering and logging in. The entire structure of these exchanges is designed towards anonymity in this manner.
3. Flexibility
Using Uniswap, anyone can quickly swap two Ethereum assets against an underlying liquidity pool. Additionally, any project can seed or create a market by supplying it with an equal value of the two paired ERC-20 tokens. However, this open nature also means users need to do their due diligence on all projects due to the presence of many bad actors on the network.
4. Liquidity Pools
Uniswap led the use of liquidity pools. These pools help bolster innovation by allowing new projects to access the necessary capital. There are thousands of liquidity pools in use currently. Moreover, liquidity providers can earn profits by simply putting their funds into these liquidity pools. For the uninitiated, users deposit tokens into a liquidity pool smart contract and receive pool tokens in return. These tokens can be traded for ETH instantly at any given time.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Can Uniswap Become A Millionaire Maker Coin? Final Thoughts
If you believe in the booming decentralized finance sector, Uniswap may be a great addition to your investment portfolio. Not only is it the most popular and liquid DEX, but Uniswap's upcoming V3 upgrade will make its platform even more liquid. The upgrade is also likely to give Uniswap a competitive advantage over other decentralized exchanges.
Since its inception, Uniswap has helped in pushing large-scale cryptocurrency adoption. Over the years, many DEXs have gotten inspired by Uniswap's unique strategy. However, none of them have seen the levels of success achieved by the leading DEX. For these reasons, you can expect to see Uniswap (UNI) continue to hold great value in the market and become a millionaire-maker asset.
Uniswap has one of the most significant daily trading volumes, and its market capitalization is also growing exponentially. The cryptocurrency is extremely popular with both cryptocurrency enthusiasts and investors who think that Uniswap can become the next millionaire-maker investment.
Although most technical analysis and price forecasts predict that Uniswap will be bullish over the next 5 years, cryptocurrency market remains relatively volatile. UNI's price could be affected by market sentiments that could change at any time, resulting in a severe loss for investors.
Uniswap has the potential to be a millionaire-maker, considering the significant growth that the UNI cryptocurrency is predicted to experience over the next couple of years.
Read more:
Bitcoin Vs. Uniswap: A Brief Comparison
Uniswap Price Predictions - Will UNI Value Continue Rising?