What is Uniswap (UNI)?
Uniswap (UNI) is a decentralized exchange protocol for swapping tokens without intermediaries, originally built on Ethereum, and UNI is its governance token.
Uniswap was launched in 2018 by Hayden Adams and popularized the automated market maker (AMM) model, in which users swap tokens against pooled liquidity rather than through an exchange company or order book. The UNI token launched in September 2020 with a total supply of 1 billion, per the Uniswap blog.
Uniswap's UNI began as a governance token for voting on protocol changes, but after the fee switch passed in December 2025 it became tied to protocol fee revenue.
How does Uniswap work?
Uniswap works as an automated market maker. Liquidity providers deposit two tokens into a pool, other users swap against that pool, and trading fees go to the liquidity providers, with prices set by a formula instead of an order book.
Uniswap v4 launched in January 2025, per Uniswap's announcement, and introduced hooks that let developers build custom pools with features such as dynamic fees and on-chain limit orders.
Uniswap also launched mainnet for Unichain, its own Layer 2 network, in February 2025, per Uniswap's announcement, to offer faster and cheaper trading.
What is the Uniswap fee switch (UNIfication)?
Uniswap governance passed the UNIfication proposal in December 2025 with more than 125 million votes in favor, per CoinDesk, turning on the long-debated fee switch. A share of fees from v2 and v3 pools and Unichain now accrues to the protocol, and those funds can only be withdrawn by burning UNI.
Uniswap's UNIfication also included a one-time burn of 100 million UNI from the treasury, valued at about $596 million when proposed, per DL News in December 2025. That equals roughly 10% of the original 1 billion supply.
Uniswap retained about $28.2 million in protocol revenue from January to July 2026, according to a Stobox analysis. Even so, the UNI price lagged for a period after the fee switch passed.
What is Uniswap used for?
Uniswap is a leading venue for swapping tokens on Ethereum and several Layer 2 networks. Users can supply liquidity to Uniswap pools to earn a share of trading fees.
Uniswap's UNI holders can take part in governance by voting on protocol proposals, and since the fee switch, protocol fees are linked to UNI burns.
Uniswap v4 hooks allow developers to deploy many custom pools, which has broadened the ecosystem built on Uniswap.
What are the risks of Uniswap?
Uniswap faces intense competition from other DEXs and trade aggregators, so its trading volume and fee revenue can shift with the competitive landscape.
Uniswap also carries regulatory risk, since how authorities, especially the US Securities and Exchange Commission (SEC), treat decentralized exchanges and governance tokens remains uncertain.
Uniswap's fee switch has not yet shown what lasting effect it will have on UNI's value, and technical risks such as smart contract vulnerabilities also exist. This is not investment advice; do your own research.
