The Uniswap decentralized exchange (DEX) is the most popular DEX built on the Ethereum blockchain. For users wondering, “What is Uniswap?,” this article provides an overview of what it is and how it works as well as several ways users can get started using the Uniswap DEX.

With Uniswap, users can swap crypto tokens without having to rely on an intermediary. Not having to rely on a third party leads to next to no economic rents being collected. Instead, Uniswap relies on smart contracts to execute trades. Smart contracts are algorithms that self-execute once certain preset conditions are met.

How does Uniswap work?

Because Uniswap is an open-source protocol, many DEXs with the suffix “swap” have been released into the market. These protocols are essentially copies of the original Uniswap source code. Where they differ is in the graphical user interface (GUI) as well as in offer differentiation and positioning.

The most famous—and most controversial—of these copycats is Sushiswap. Upon copying Uniswap’s source code, it proceeded to launch a vampire attack. A vampire attack is where a DeFi protocol offers various incentives to liquidity providers. A vampire attack aims to draw liquidity away from the target protocol.

How did Sushiswap achieve a successful vampire attack? The platform launched an aggressive marketing campaign. They also made it easy for Uniswap liquidity providers to switch over. Finally, they offered insanely lucrative rewards to make it worth their while.

Another less controversial example is Pancakeswap. This DEX lives on the Binance Smart Chain.

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