Uniswap is a DEX protocol for ERC-20 tokens, featuring concentrated liquidity and community-driven governance through its UNI token. With a total supply capped at 1 billion tokens, UNI holders influence protocol changes and earn rewards through governance participation and liquidity provision. Initial funding included a grant from the Ethereum Foundation and a seed round led by Paradigm, supporting its development and growth in the decentralized finance (DeFi) ecosystem.
Value Proposition:
Uniswap is a DEX protocol designed to facilitate automated liquidity provision for trading ERC-20 tokens. Uniswap enhancements that significantly boost its value proposition over previous versions. The most notable feature is concentrated liquidity, allowing liquidity providers (LPs) to allocate their capital within specific price ranges.
Governance:
Uniswap's governance process is community-driven, allowing UNI token holders to influence the protocol's future. It starts with a "Temperature Check," where a general question is posed on the Uniswap governance forum. If it gets at least 25,000 UNI in favor, it moves to the "Consensus Check" for a more detailed proposal and vote. The proposer needs 2.5 million UNI delegated to their address to submit it through the Governance Portal. After a two-day voting delay and a seven-day voting period, the proposal needs 4% of the total UNI supply in favor to pass. It then enters a two-day timelock before execution. This process ensures thorough community involvement in all protocol changes.
Tokenomics:
Uniswap's tokenomics revolve around its native governance token, UNI. The total supply of UNI is capped at 1 billion tokens. UNI tokens serve multiple purposes within the Uniswap ecosystem. They enable holders to vote on governance proposals, including protocol upgrades, fee structures, and other critical decisions. Additionally, UNI tokens can be used to add liquidity to the DEX or pay for transaction fees. The protocol also features an annual perpetual inflation rate of 2% after the initial four-year period, which helps encourage continuous participation in governance and protocol development.
Previous Funding:
Uniswap's initial funding came from a combination of grants and venture capital investments. The project received a $100,000 grant from the Ethereum Foundation on August 17, 2018, which helped kickstart its development. Following this, Uniswap raised $1.8 million in a seed round on April 23, 2019, led by Paradigm
