Uniswap is not only the most popular decentralized application on the Ethereum network. Currently, its novel token UNI is a major DeFi coin as well as the 29th largest digital asset by market capitalization.
This article takes an overview of Uniswap, its core areas of business and - most importantly for prospective investors - the pros and cons which can help answer the question: Should You Buy Uniswap?
Uniswap trended 2021 as one of the DeFi coins that have recorded great returns. This is as a result of the crypto boom of 2021 which was led by Bitcoin. As the largest decentralized exchange (DEX), Uniswap (UNI) returned 260% for investors in the past year.
Unlike Bitcoin (BTC), Bitcoin Cash (BCH), Dash (DASH), Litecoin (LTC), and Dogecoin (DOGE) that acts primarily as a transactional currency that settles millions of transactions daily, Uniswap serves as a governance token on the Uniswap decentralize exchange.
Currently, users of the exchange are staking the cryptocurrency in the form of providing liquidity to the market. This act of being a liquidity provider (LP) has resulted in numerous rewards for participants.
So is Uniswap a good investment and should you invest in Uniswap?
Most importantly, for novice traders and investors - what are the pros and cons which can help answer the question: should I buy Uniswap?
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- Uniswap at a Glance
- UNI Price Performance from 2020 till Date
- PROS of Buying Uniswap
- CONS of Buying Uniswap
- What Is The Safest Way to Buy Uniswap / Where Can I Buy Uniswap?
- Uniswap Price Prediction: What Are Analysts Saying About Uniswap?
- The Bottom Line - Should You Buy Uniswap?
Uniswap At A Glance
This section gives an overview of Uniswap, the beginnings of the crypto project, its founder, and why it was created. Additionally, an extensive look at the price performance of the cryptocurrency will be thoroughly analyzed to assist you in deciding if it is a good idea to invest in Uniswap.
After Vitalik Buterin released Ethereum to the general public, he envisioned blockchain technology and cryptography in general beyond the creation of digital currencies. He thought about the possibilities of blockchain technology through smart contracts and the creation of decentralized applications (DAPPS) to rival mainstream financial products being offered by centralized institutions.
In 2016, he proposed an idea for the creation of a decentralized exchange that would use an on-chain automated market maker (AMM) that comes with unique features. In 2017, Hayden Adams moved in on the idea and began the process of transforming the concept into a functional application.
This is why software developer and designer Hayden Adams is widely credited as the founder of Uniswap. With help from the Ethereum Foundation which granted him $100,000, Hayden and his team built a compelling decentralized exchange. Uniswap was launched in November 2018.
What is Uniswap?
Uniswap is a decentralized exchange built on the network of Ethereum. Instead of using a traditional order book, it employs an automated market-making system. Uniswap allows direct peer-to-peer cryptocurrency transactions to occur online safely and securely without any intermediaries.
Users pool together two assets which are then traded against each other with the determination of the price based on the ratio between the two instead of matching individual buy and sell orders. Uniswap runs on Ethereum as an ERC-20 token. Uniswap exists as two separate but interrelated entities. Its novel token and ticker symbol UNI trades on exchanges and governs the exchange.
Read Also: What Is Uniswap And Is It Worth Investing In
Why Was Uniswap Created?
The primary idea behind the creation of Uniswap was the simplification of the buying and selling of digital assets. It is known across the decentralized finance space that professional market makers have little motivation to provide liquidity to thinly traded assets.
Uniswap came into the exchange space to enable anyone to become a market maker so long as the person has a quest of depositing assets into a pool which can then be used to facilitate transactions in real-time. This has solved the costly payments and unreliability issues associated with confirmation of transactions.
How Many UNIs Are In Supply?
There are 690,660,722.79 UNI in circulation from a total supply of 1,000,000,000 UNI at the time of writing.
UNI Price Performance from 2020 till Date
As per data retrieved from CoinMarketCap, UNI began trading on 17th September 2020 with an opening price of $1.10 with a trading volume of $1.76 billion. Since that day, there have been sharp rises and recessions and depending on how slow or fast UNI was sold for by a holder, huge returns and losses have been the portion of thousands of people.
After launching Version 2 in May 2020 that brought great improvements in terms of efficiency to the network, UNI closed September at $4.01. In the space of 14 days, UNI increased by 264.545%.
A drop in trading volume signaled decreased investor interest in the cryptocurrency. The novel token of the decentralized exchange opened in the last quarter of 2020 at $4.51. UNI traded for a coin at $3.03 in mid-October and closed the month with a trading price of $2.27. The trading volume on the last day of the month stood at $195 billion.
On 1st December 2020, UNI opened at $3.98 and has an improved trading volume of $1.042 billion. This communicated to traders and investors that there is renewed interest in the asset. UNI rallied to end the year strong and on the last day of 2021, commanded a trading price of $5.17 to close out the year.
Overall, Uniswap returned 370% for investors in the space of 3 months.
In 2021, buoyed by the cryptocurrency boom and institutional interest, Uniswap made strides and moved into the top 10 digital assets globally.
UNI opened 2021 at $4.7 and closed the year at a trading price of $17.07. In the process, Uniswap increased by as much as 261%.
March brought about the testing of the $30 price milestone. The novel token governing the decentralized exchange began April by trading for a coin at $30.27 and closed the month by testing the $40 price milestone and finally settled at $40.70.
In May, announcements of an upgrade called Uniswap V3 took the cryptocurrency to a new all-time high price of $44.97. Uniswap opened on 1st May 2021 at $41.25 and due to comments made by Elon Musk and unfavourable cryptocurrency news by the Chinese government, Uniswap plunged into new high lows. The cryptocurrency recovered in style and finished May by trading at $28.37. After a drop in July Uni started rising again in August to reach $31 in the beginning of September. Uniswap ended 2021 around the $17 mark.
At the time of writing, UNI had a price of $7 and a market capitalization of $4.85 billion.
Several experts are forecasting a substantial increase in price for the cryptocurrency in the months leading up to the end of the year. This has brought several questions to the social media feeds. One of the most consistent questions is what are the pros and cons of investing in Uniswap?
Don't Miss: Uniswap Price Predictions
Pros Of Buying Uniswap
What Are Advantages Of Investing In Uniswap?
If you are poised on investing in Uniswap, then it is only right that you get to know the factors that can drive the price of the cryptocurrency to new price milestones. With that said, let us take a look at the pros of investing in Uniswap that will help you conclude if you should buy Uniswap.
✅ Uniswap Has a Finite Supply
Uniswap has a finite supply of 1 billion. Fortunately, 69% of the coins which are represented by 690,660,722.79 are circulating on the market leaving 31% up for grabs. Aside from its role in governing the decentralized exchange, holders of UNI have absolute control of the whole community. As a result, they can engage in staking and earn fees from liquidity pools. Why have millions of people joined the crypto train? They want to double, triple, or increase their capital by 10 times. Such rewards through fees could see the remaining UNI on the market taken up through the provision of liquidity by users. Once this happens, with the opinion of the Corporate Finance Institute in sight, UNI could break free of an all-time price high of around $44 and reach new price milestones in the future.
✅ Uniswap Trades On All the Major Cryptocurrency Exchanges
For Uniswap to be listed on eToro is a massive achievement due to the exchange’s stance on listing high-frequency trading assets. UNI gained admission into eToro in April 2021. In the first week of June 2021, Coinbase Pro finally listed Dogecoin on its platform and the cryptocurrency soared 30% in a matter of hours. Uniswap unlike Dogecoin launched on Coinbase Pro in September 2020.
Coinbase was reluctant to launch DOGE due to several controversies and shady schemes earlier on associated with the cryptocurrency. For Coinbase to launch UNI in the month it became a crypto trading asset signals not only the level of investor interest in the asset but the legitimacy of the cryptocurrency as well.
Moreover, UNI can be found on the largest cryptocurrency exchange in the world, Binance. For most of its existence, Binance records more daily volumes on its platform than all exchanges.
With millions of customers pouring liquidity into digital assets, UNI will not be left unattended. This is the main reason why it keeps recording millions and billions of daily trading volumes. In the future, a price increase will be buoyed by increased trade volume which will positively impact the valuation of the cryptocurrency.
✅ Uniswap Controls the Decentralized Exchange Space
Uniswap is to decentralized exchanges what Ethereum is to decentralized finance. There are hundreds of decentralized exchanges but Uniswap controls a substantial part of users.
At the time of writing this report, Uniswap’s exchange had recorded a volume of $1,661,577,900.
Uniswap also controls 75% of the decentralized exchange market. It has had 97,478 users in the last 7 days. 1inch comes in second place with 32,737 users while 0x API (19,518), Sushiswap (9,446) and Balancer (4,630) complete the top 5. There is a huge chance that new users of DEXs would patronize Uniswap rather than others due to the success it has had. Aside from this, some rewards will easily entice millions of people to Uniswap once many people become extremely knowledgeable about cryptocurrency and decentralized finance as a whole.
With the function of UNI, more people mean more activity and that always leads to a potential increment in price.
✅ Uniswap Has a Secured Network
Uniswap runs on Ethereum. Ethereum is using a proof-of-work (POW) algorithm. The proof-of-work algorithm makes it difficult for hackers to break into a system. Considering POW networks need Application Specific Integrated Circuits (ASICS), Uniswap is running on a safe and secured network.
Uniswap as a decentralized application is non-custodial. This means that every aspect of an account is in the hands of users. They manage their private keys, wallets and as well have custody of their cryptocurrencies.
The safety and security of knowing that Uniswap would not be compromised in the future bode well for its novel token. This is the main reason why experts and analysts forecast new price milestones for UNI in the months leading up to the end of the year.
✅ Uniswap Has an Impressive Market Capitalization
Market Capitalization plays an integral role in the determination of an asset’s worth. Uniswap commands a market capitalization of $4.858 billion.
Uniswap has outperformed earlier projections by experts and analysts at the end of 2020. If the mania around the decentralized world does not fade, Uniswap could reclaim its position in the top 10 digital assets.
✅ Uniswap Has Made Necessary Upgrades to Its Exchange
At its launch in 2018, Uniswap was running on Version 1. In May 2020, the developers announced an upgrade which culminated in Version 2. In May 2021, Hayden Adams and his team announced Version 3. This upgrade addresses several problems that were earlier on associated with the decentralized exchange. According to Messari, “One downside to this model is that there is substantial slippage for large orders as the price paid increases as the quantity demanded increases.” Version 3 reduces low slippage to the barest minimum. This is because the capital efficiency is up to 4,000 times better than Version 2.
Uniswap is deployed on Arbitrum (a layer 2 scaling platform on Ethereum) which can improve the scaling problem associated with the Ethereum 1.0 proof-of-work algorithm.
These upgrades will bring a huge gap between Uniswap and other exchanges. For the time being, exchanges on Tron, Stellar, and Binance scales relatively faster than Uniswap. Fortunately, developers are in the process of correcting this network defect. Once completed, UNI could benefit from these upgrades and soar to new highs.
Cons Of Buying Uniswap
What Are the Disadvantages of Investing In Uniswap?
Having an urge to invest in Uniswap does not mean you should consider the pros and forget about the negative factors that make Uniswap a bad investment. Let us take an in-depth look as to why investing in Uniswap may not be a good idea.
❌ Uniswap Has Lots of Fake Coins
Due to its decentralized nature, anyone can list tokens on the decentralized exchange. This is the main reason why several coins are running on the platform. Scammers have seen an opportunity and have taken advantage of it to create fake coins. Most scammers trick legitimate users of Uniswap into sending assets on the exchange. As a trader or investor, you must remember that once a transaction is sent, it cannot be reversed. This means that if you are tricked into sending a substantial amount of your savings, irrecoverable losses become the result. This can wreak havoc on your finances. Take note of this and invest wisely.
❌ Uniswap Is Not a Perfect Exchange
Despite the necessary upgrades being made, there is no technological platform online that is perfect. Uniswap has the potential of failing during the processing of transactions. This can happen through insufficient liquidity if a particular pool does not have adequate funds to be able to facilitate a transaction. Aside from this, opting to pay relatively lower gas fees that do not meet the requirements of the miner may not see confirmation of your transaction. Moreover, due to changes in the price of tokens in a swift manner as a result of the volatile nature of cryptocurrencies, constant price fluctuation during processing can result in failed transactions. This can happen when there is a specification of a maximum price that a user is willing to pay for another token. Once a price goes slightly up, a transaction can fail automatically. With more exchanges online providing the same services, several users may opt for DEXs whose issuing authority has found solutions to the swift processing of transactions.
❌ Uniswap faces Infinite Competition
Uniswap faces competition from centralized and decentralized cryptocurrency exchanges. Millions of people prefer to go through a Knowing Your Customer (KYC) phase to protect their identities, bank account, credit and debit cards. Due to the legitimacy of centralized exchanges, a lot of people have opined that there is a feeling of security that comes with storing your coins on those platforms. Aside from this, other decentralized exchanges are trying to catch up with Uniswap. PancakeSwap runs on Binance’s smart chain and once surpassed Uniswap as the DEX with the highest daily trading volume.
Other competitors include Sushiswap (Ethereum) and JustSwap (Tron). Cardano is accomplishing huge milestones that will bring about full functionality soon. Once this happens, several DEX enthusiasts would like to take advantage of the relatively better scaling times of Cardano which is forecasted to reach 1 million transactions per second. Internet Computer aim to decentralize everything on the internet which includes centralized exchanges. Also, EOSIO has more DEXs running on its blockchain. The development team behind the project has outlined milestones that will improve upon the efficiency of the decentralized applications already running on the platform.
It will be in the best interest of Uniswap to move to Cardano in the future due to its accomplishment of the ERC20 converter and scale faster. ERC20 Converter will allow DAPPS running on Ethereum to function on Cardano’s network. Or, it can only hope Ethereum’s 2.0 network that employs proof-of-stake (POS) will reach full functionality soon so that more users will patronize the exchange. Without that, Uniswap’s grip on the DEX space may be lost along the way.
❌ Uniswap Has Not Achieved Independence in Its Trading Journey
It is a fact that the crypto world is controlled by Bitcoin. As we have gotten to know, Bitcoin is not the best cryptocurrency in terms of being used as a transactional currency because of its slow processing speed. But it still controls the price patterns of all cryptocurrencies.
Since UNI is the highest-ranking DeFi coin in terms of market capitalization, several people felt it could find some form of independence with regards to price determination. Unfortunately, it makes huge gains when BTC is soaring, goes through a price correction when BTC is recovering, and plunges when news surrounding Bitcoin is unfavourable. This does not bode well for an asset that powers an exchange that controls more than 75% of its space.
❌ Uncertainty on Uniswap’s Final Maximum Cap
Thousands of developer teams have been increasing the coins powering their respective networks to meet investor demand. UNIs total supply stands at 1 billion. As it stands, there is a great chance the coins will be mined in the next 2 to 5 years.
Investors can only hope that an increase in demand will not force Hayden Adams to adopt the decision-making patterns of Billy Markus and Jackson Palmer of Dogecoin to increase the number of coins on the market. Once this happens, UNI will fall into the same line as Dogecoin. Uniswap will therefore have to thrive on positive tweets or favourable crypto market sentiment to increase in price and bring improved gains to you as an investor.
What Is The Safest Way To Buy Uniswap / Where Can I Buy Uniswap?
If you want to invest in Uniswap, there are several top cryptocurrency exchanges on the market that provide great services. eToro is the exchange we would like to recommend for your trading activities. eToro has more longevity than most of the exchanges found on the market.
With more than 15 years of experience, eToro has served millions of people. eToro has offices in the United States and the United Kingdom.
How do I buy Uniswap? Follow the steps below and you would be on your way towards buying your first UNI coins.
The FIRST STEP is to SIGN UP. Provide details of your credentials (name, email & residential address, and phone number).
The SECOND STEP is to VERIFY ACCOUNT. eToro needs to confirm the legitimacy of the person sitting behind a personal computer or smartphone. A government-issued identification card with your signature embossed will be requested. In most cases, eToro normally asks for proof of residence which can be found by uploading bank and credit card statements not more than 6 months old.
The THIRD STEP is to DEPOSIT FUNDS. Using a range of payment options available upload funds in the forms of USD, GBP, and EUR to buy UNI coins.
The FINAL STEP is to NAVIGATE to UNI PAGE. On this page, you can purchase several UNI coins that meet your investment budget. The transaction will be processed and your first UNI coins will be added to your wallet.
Uniswap Price Prediction: What Are Analysts Saying About Uniswap?
Although fundamental and technical analysis plays an integral role in helping you determine the potential of a digital asset, you must factor into your decision the price forecasts of experts and analysts. Let’s take a look at how much Uniswap could be worth.
FX Leaders forecast UNI to command a trading price of $25 to $45 in one year. The fundamental analysis backing such projections includes product adoption and market recovery. In the next 3 years, FX Leaders estimate UNI to trade at above $50.
According to experts at Digital Coin Price, Uniswap is expected to command a trading price of $9.43 by the end of 2022. The crypto portal that provides accurate technical analysis believes UNI could have trading prices of $11 (2023), $15 (2024), $20 (2027), and $24.88 (2028).
Coin Price Forecast estimates UNI to command a trading price of $9.24 by the year’s end of 2022, $9.66 (2023), $11.05 (2024), $14.85 (2026) and $17.26 (2027).
CoinPedia thinks UNI might see $52 by the end of 2022, and rally to a new all-time high of $198 in 5 years.
According to CryptoNewsZ, UNI will trade at $15 by the end of 2022 and probably hit $23 in 2025.
Check Out: Uniswap (UNI) Price Prediction
The Bottom Line - Should You Buy Uniswap?
According to the projections by experts and analysts, Uniswap is worth considering. UNI has great potential in the market and might be the missing digital asset on your portfolio. Investing in Uniswap comes down to two factors which are risks and rewards. Do the potential rewards in investing in Uniswap outweigh the possible consequences of the risks?
Uniswap certainly has risks such as fake coins and possible transaction failures which can impact its price. Aside from this, millions of crypto enthusiasts do not know much about UNI since it’s not a major altcoin and as well not a mainstream cryptocurrency. Its issuing authority also competes with other DEXs for users. With that said, UNI benefits from its use as a governance token and provision of liquidity to the decentralized exchange. It also records millions and billions of dollars in daily trading volumes. UNI is highly accessible from the mileage it receives from being listed on top cryptocurrency exchanges. With more upgrades to Uniswap which will bring more rewards to liquidity providers, millions of users will be using the DEX and benefiting from these rewards.
So, should I buy Uniswap? Early investors in Uniswap UNI have seen huge gains. Even buyers who decided to invest in Uniswap in January 2021 have seen more than a 500% return on their investments. By conducting independent research on UNI to better understand its price patterns in the future, investing in Uniswap could be one of the greatest decisions you ever made.
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What Will Uniswap Be Worth in 2025?
According to Digital Coin Price, UNI could be trading for $15 in 2025. According to Coin Price Forecast, UNI could be trading for $12 by the end of 2025.
What Will Uniswap Be Worth in 2030?
Coin Price Forecast predicts UNI to have a trading price of $17 by the end of 2030.
Does Uniswap Have a Future?
Yes! Uniswap does have a future. Fundamental and technical analysis points to potential growth in the price of the cryptocurrency in the future. Experts across Coin Price Forecasts, CryptoNewsZ, Digital Coin Price, Previsioni Bitcoin, FX Leaders, and CoinPedia projects Uniswap to command a substantial price in the coming years. The minimum price forecast stands at $15 and the maximum price is projected at $190 in the future.