A decentralized financial mechanism called Uniswap is available on open-source blockchain networks for the trading of tokens and cryptocurrencies. This contrasts with centralized company-run bitcoin exchanges.

The owners of UNI, a native cryptocurrency and governance token, vote on protocol changes, which are subsequently carried out by a group of programmers. The first distribution of UNI coins went to the protocol's pioneers. Prior to September 1, 2020, each Ethereum address that has interacted with Uniswap was given the chance to claim 400 UNI tokens, which were valued about $1,400 at the time. As of February 2022, the UNI token's market capitalization was over USD 6.6 billion.

Protocol
In order to build more efficient markets, Uniswap uses liquidity pools as opposed to acting as a market maker like centralized exchanges do. By adding a pair of tokens to a smart contract that can be bought and sold by other users in accordance with the constant-product rule displaystyle phi (x,y)=xy, people and bots—referred to as "liquidity providers"—provide liquidity to the exchange. Liquidity providers are compensated with a portion of the trading commissions generated by that trading pair. Each time a trade is made, a specific number of tokens are taken out of the pool in exchange for a specific number of the other token, affecting the price. The ability to access a large number of Ethereum tokens is made possible by the lack of listing fees and the need for user registration. Because Uniswap is open-source software, new exchanges can be made using its code.