Uniswap Price Prediction: A Fundamental Look at Decentralized Exchanges

Dec 17, 2021
The Uniswap logo with text saying "uniswap price prediction"

Uniswap is a decentralized trading platform pioneering on-chain swaps between any two tokens. It is designed for ease of use for both developers and everyday consumers. Uniswap was launched in 2018 and built with the ERC-20 protocol, with their governance token aptly named UNI. It is designed for simple swaps between two cryptocurrencies and does not currently support claims on tokens, dividends, or other investment opportunities.

In this article, we will learn what decentralized exchanges are and about the Uniswap project, how it works, and what users can benefit from. We will also try to predict the future price of Uniswap tokens by analyzing recent developments in its market.

What are decentralized exchanges?

Decentralization in visual form

Decentralized exchanges (DEX) are peer-to-peer marketplaces where users can trade digital assets without a gatekeeper. They are believed to be the future of trading platforms, as they’re more secure, faster, and more transparent.

DEXs can be operated by multiple individual parties or organizations within a community, and they are used to trade cryptocurrencies between people without a third-party intermediary like a bank or centralized exchange. DEXs allow for direct peer-to-peer trading, removing the need for intermediaries such as privately owned and operated cryptocurrency exchanges.

There are several types of DEXs, including marketplaces, direct trading platforms, and decentralized asset exchanges. The most common type is a peer-to-peer marketplace, where users can trade directly with each other through a decentralized exchange like Uniswap.

Bonus content: Learn more about the power of DEXs with our article on initial DEX offerings

Uniswap is a decentralized trading platform that uses the Ethereum blockchain to enable peer-to-peer trades between any two tokens. Therefore, it is a DEX; however, it differs from similar sites such as IDEX and ForkDelta, because it offers much more than a decentralized trading platform, but also incentives to boost liquidity, ultra-low fees, and spreads and it does not use an order book.

What is Uniswap?

Uniswap is a decentralized trading platform that allows users to trade any pair of tokens from the Ethereum network. Uniswap is designed for simple swaps and does not currently support claims on tokens, dividends or other investment opportunities. It is a trading platform that allows users to exchange any two types of tokens, including cryptocurrencies, ERC20 tokens (e.g. Ethereum),  and stablecoins.

The platform also provides a swap marketplace where users can trade these assets between each other as well as to market makers who have a large number of tokens. This marketplace is where the price discovery occurs, allowing users to get an idea of which tokens are most liquid by looking at the prices being offered.

In short, Uniswap is a decentralized exchange with swap functionality (via the swap marketplace), without using an order book for the trading of any two tokens, and a peer-to-peer decentralized market for finding liquidity.

What role do decentralized exchanges play in the future of the crypto industry?

Decentralized exchanges have already received a lot of attention from crypto investors. In fact, the term “decentralized exchange” is still a buzzword in the cryptocurrency world today. However, while they are used by traders and developers, decentralized exchanges have yet to become mainstream for a number of reasons.

Some people believe that the world is not ready for them. Others believe that they are too complex and don’t offer enough benefits over centralized trading platforms. However, crypto investors are starting to see the appeal of DEXs and believe that they will eventually win out over centralized exchanges. That’s because decentralized exchanges can provide a number of benefits compared to centralized ones. These include:

1. Lower fees

Since there is no middleman taking a cut, users can trade coins for as little as 0.05 percent of the transaction value. This is significantly lower than what centralized exchanges charge for all of their services, especially when they include fiat currency and bank wire transfers.

2. Quicker transactions

When using a DEX, users don’t have to wait for their tokens to be confirmed by the network. Once they complete the transaction, it is sent immediately to the other party. This means that users can get their trades done more quickly and efficiently, and it also eliminates the waiting time necessary for funds to clear on centralized exchanges.

3. More privacy

There is no need for users to disclose their personal information to a centralized exchange. Instead, they can connect only with their trading partners, which means that their privacy is protected.

4. More control

Decentralized exchanges don’t have the ability to freeze funds in accounts, and they can’t close an account without reason.

5. Better security

DAO hacker attacks have shown that centralized exchanges are not as secure as they were once thought. As a result, decentralized exchanges offer much more security than traditional ones.

How does this affect the price of Uniswap?

Uniswap price: one-year chart

With all the advantages of decentralized exchanges, it’s no wonder that the world is starting to take notice of them. As it stands now, they are still not mainstream in the crypto industry but have a lot of potential to grow in the near future.

Uniswap has the potential to disrupt the current centralized exchanges by creating a swap marketplace that is easy and straightforward to use which presents obvious benefits.

As a result, Uniswap price is expected to increase over the long term. This is because they are one of the most widely used tokens by traders on the platform and because their prices are used as the benchmark for swaps.

Uniswap Price prediction: 1-year forecast

As mentioned previously, the Uniswap price prediction is based on the performance of its market over a long period of time. The information used in this analysis is derived from Uniswap project’s historical data, social media activity, technical indicators and other factors.

Uniswap Price Prediction: $33.82 (1-Year Forecast)

We expect the general price trend of the Uniswap token to be positive, as long as the demand for the token remains strong. Moreover, the demand for this token will increase as the project’s popularity will grow. However, we can expect price fluctuation within a relatively tight range such as during this bearish trend of cryptocurrencies recently.

At the time of writing, Uniswap is the twentieth most valuable token by market cap, after Chainlink (LINK) It has a market capitalization of over US $9billion and is currently traded at $14.47 per coin (as of 17 December 2021).

Did you know? You can buy UNI on YouHodler, deposit it into a UNI savings account and earn interest on top of your profits from HODLing UNI? It’s true!

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