Overview
Uniswap is the largest decentralized exchange (DEX): a set of smart contracts that lets anyone swap tokens directly from their own wallet, with no company holding their money and no account to open. It was created by Hayden Adams and launched on Ethereum in November 2018. The company behind it is Uniswap Labs.
In September 2020, Uniswap launched the UNI token with one of crypto’s most famous airdrops: everyone who had used the exchange received at least 400 UNI, worth over $1,000 at the time.
How it works
Instead of matching buyers and sellers in an order book, Uniswap uses liquidity pools: pairs of tokens supplied by liquidity providers (LPs). A formula sets the price based on the balance of the two tokens. Every swap pays a small fee to the LPs.
Uniswap has gone through several versions:
- v3 (2021) let LPs focus their money on chosen price ranges, making trading more efficient.
- v4 (January 2025) added hooks, custom plug-ins that let developers build features like dynamic fees, limit orders or rewards directly into pools.
Uniswap runs on Ethereum and many other networks, and in 2025 it launched Unichain, its own Ethereum Layer 2 built for trading.
The fee switch and UNI burns
For years, UNI was only a governance token: all trading fees went to LPs, none to UNI holders. That changed with “UNIfication”, approved in December 2025:
- a small protocol fee was switched on for many pools, with the money used to buy and burn UNI;
- 100 million UNI (about 10% of the supply) was burned from the treasury in one go;
- in July 2026, the fee system was extended to v4 pools and to seven networks, including Ethereum, Arbitrum, Base, BNB Chain and Robinhood Chain.
Uniswap’s founder cited an annualized burn rate of around $250 million by September 2026. The burns make UNI deflationary when trading is strong.
The UNI token
| UNI at a glance | |
|---|---|
| Total supply | about 887 million UNI (after burns) |
| In circulation (Oct 2026) | about 625 million |
| Price (21 Oct 2026) | about $7.47 |
| All-time high | about $44.92 (May 2021) |
| Market cap | about $4.7 billion (#24) |
Security and reliability
Uniswap’s core contracts have run for years with no major hack, securing billions of dollars. The main risks are:
- For LPs: providing liquidity can lose money compared with simply holding the tokens, known as impermanent loss.
- For traders: anyone can create a pool, so scam tokens appear on Uniswap. Always check token addresses.
- Competition: other DEXs (PancakeSwap, Aerodrome, Hyperliquid) and centralized exchanges compete for volume, which drives the burn.
- Regulation: the US SEC closed its investigation into Uniswap Labs in 2025, but DeFi rules are still evolving.
Uniswap vs. the competition
| Uniswap | PancakeSwap | Hyperliquid | |
|---|---|---|---|
| Type | Spot DEX (pools) | Spot DEX (pools) | Perpetuals and spot (order book) |
| Main chain | Ethereum + many | BNB Chain + others | Own chain |
| Token rewards | Fee-funded burns | Burns | Buybacks with fees |
Our verdict
Uniswap is DeFi’s flagship exchange, with a long security record and constant innovation. With the fee switch, UNI finally captures part of Uniswap’s success through regular burns, a major change from its first five years.
Still, UNI is far below its 2021 high, and the burns depend on trading volume in a very competitive market. UNI is a high-risk, long-term bet on DeFi trading. Invest only what you can afford to lose.
This review is for information only and is not financial advice.