Uniswap is a leading decentralized exchange based on Ethereum, which has also expanded support for several other blockchains. Uniswap was one of the earliest DeFi protocols to use automated market maker (AMM) smart contracts to manage pools of token liquidity that can be used by traders wanting to buy and sell tokens.
Since its inception, Uniswap has launched three successive versions, each offering more sophisticated functionality for traders and providers of token liquidity. This guide will cover Uniswap V3.
How to get started with Uniswap?
To use Uniswap, you will need a cryptocurrency wallet such as MetaMask or Phantom, a small amount of ETH or other native cryptocurrency to pay gas fees, and the tokens you want to trade or use to provide liquidity.
Navigate to the official uniswap.org homepage and click the “Launch app” button to launch the Uniswap app. From the app landing page, select “Connect wallet” and choose your wallet. Navigate through the steps to enter your credentials and connect your wallet.
The main features of Uniswap are accessible via the app menu, allowing you to swap tokens, view token stats, trade NFTs, or contribute liquidity to Uniswap pools. The default blockchain in the app interface is set to Ethereum, but you can configure another blockchain from the app landing page. You can also click your wallet icon to view the details of your connected wallet, such as token and NFT balances.
How to use Uniswap for token swaps?
To swap tokens, select Swap from the main menu. This will bring up the main swap screen, allowing you to select your assets from a list. You can also navigate to the “Tokens” page from the main menu and choose your selected assets or search for them via the main search bar.
For a straightforward swap, simply enter the amount of the asset you hold or the amount of the asset you want to swap to. The app will detect whether you have a sufficient balance either way. To execute the swap, simply click swap and follow the steps on the screen to approve the transaction.
Uniswap V3 also offers the option to change some parameters of the swap. For example, you can specify the maximum amount of slippage (the amount lost or gained as a result of market fluctuations while executing an order) and the time the transaction should wait.
Uniswap also offers the option to purchase crypto using fiat currency via a third-party payment provider. The availability of this feature and supported payment methods may depend on your jurisdiction.
How to use Uniswap as a liquidity provider?
To add liquidity to Uniswap’s token pools, start by selecting “Pools” from the main menu. From the Pools landing page, there are two options. If you already know the pool to which you want to contribute liquidity, then you can select the “New position” button to get started. On the next screen, you can choose the token pair for which you want to contribute liquidity.
However, if you prefer to browse the available pools to choose one based on current performance, then you can select the option to explore pools via Uniswap Analytics.
The Analytics platform shows the available pools ranked by the amount of liquidity held. Clicking on a pool allows you to view a range of metrics measuring the pool’s performance, including the depth of liquidity, fees paid, recent transactions, and more.
From the selected pool page, you can click the “Add liquidity” button.
Uniswap V3 allows you to concentrate liquidity, meaning that your liquidity is only available for token swaps around the most popular price ranges. This is intended to be more capital efficient than previous versions of Uniswap, which provided liquidity across the entire price range from zero to infinity. The Uniswap V3 interface automatically selects liquidity for the most popular price range and the most popular fee tier. However, these parameters, which impact the profitability of the position, can be easily changed using the interface.
Once you have determined the amounts you wish to supply and the appropriate price ranges and fee tiers, click through to approve the transaction via your wallet.
When the transaction is complete, you will receive liquidity provider (LP) tokens, which act as a receipt for your open position. Now, when you visit the Pools page again, the landing page will show your open position by default.
When you wish to withdraw your liquidity, you can click the “Remove liquidity” button and follow the steps to redeem your LP tokens.
How to use Uniswap to trade NFTs?
Uniswap aggregates listings from several NFT marketplaces, including OpenSea, allowing you to trade NFTs from within the Uniswap interface.
To buy NFTs on Uniswap, you can either search for your chosen collection using the search bar or select the NFT option from the main app menu. Once you are on the screen for your collection, you can select individual NFTs to add to your shopping bag.
When you’re ready to pay, simply click the shopping bag link and select “Pay.” Follow the steps to approve the transaction, and once it has been completed, your NFTs will be visible in your crypto wallet.
To list an NFT via Uniswap, select the wallet icon to open up the wallet screen. Click “View and sell NFTs” to open up your NFT portfolio, and choose the one you want to sell by clicking the “List for sale” button under the asset.
Click to continue, and then choose the marketplace where your NFT will be listed. Enter the duration of the listing and your listing price. Once you confirm that the listing can start, you will need to approve a wallet transaction and pay the gas fee for the listing.
How to use Uniswap essentials
- Connect a cryptocurrency wallet loaded with some tokens or NFTs to the official Uniswap app.
- Use the swap interface to exchange funds between a wide range of supported tokens and assets.
- Add liquidity to Uniswap pools to earn a share of swap fees.