Uniswap is a protocol on Ethereum for swapping ERC20 tokens. Unlike most exchanges, which are designed to take fees, Uniswap is designed to function as a public good—a tool for the community to trade tokens without platform fees or middlemen. Also unlike most exchanges, which match buyers and sellers to determine prices and execute trades, Uniswap uses a simple math equation and pools of tokens and ETH to do the same job.
How to use and trade in Uniswap?
Through Uniswap, you’re able to purchase ether (ETH) and any of the thousands of ERC20 tokens supported by the platform.
Before you start trading in Uniswap, make sure you have already kept a wallet such as Metamask and Trust Wallet. Also, you need some ETH in your wallet to pay for any transaction fees, as well as something to trade for the ERC20 token you want. This might be ETH, or another ERC20 token. For example, if you want to trade USD Coin (USDC) for UNI, you’re going to need to hold enough USDC plus some ether to cover the transaction fee.
Now, let's start using Uniswap step by step and this guide focuses on desktop experience.
Steps to use Uniswap
Step1: Connect an Ethereum wallet such as MetaMask.
For the purposes of this tutorial, we will start with a MetaMask wallet. Unlock your Metamask extension in your Chrome browser or any chromium-based browsers. If you do not have Metamask wallet, you can use other wallets you already have.
(If you'd like to have a Metamask and do not know how to get one, follow this guide.)
Step 2: Head over the Uniswap exchange platform.
On the top right, find and click the button of ‘Connect to a wallet’.
Log in with the wallet you prefer to trade with. This can be either a MetaMask, WalletConnect, Coinbase Wallet, Fortmatic, or Portis Wallet.
Steps to trade in Uniswap
Step 1: Select the token you'd like to convert in a dropdown menu, and the cryptocurrency you'd like to swap it for.
For example, select ETH and swap to UNI.
Step 2: Confirm and set up your order.
At the bottom of the order menu, you’ll then see how much you can expect to receive.
If you’re happy with these figures, click the ‘Swap’ button.
When you’re ready, confirm the transaction and it will then be processed. Once it’s done, your tokens will appear in your ERC20 wallet.
Step 3: Wait and track the process.
You have to wait a little while for the transaction to be completed on the Ethereum blockchain — and also can keep track of its progress through the Etherscan.io blockchain explorer.
One critical deterrent for new Uniswap users is the exorbitant Uniswap fees. Because Uniswap lives on the Ethereum blockchain, it relies on ETH for gas fees. Due to Ethereum's design, greater congestion leads to higher gas fees because it fuels a bidding war between users competing to have their transactions inserted first into the next block.
This guide takes using Uniswap with Metamask wallet as an example while it can be used by other wallets with similar steps. Whenever you use or trade with Uniswap, please keep your information secure and never expose your private key to strangers.