Uniswap is a decentralized exchange protocol built on the Ethereum blockchain. It allows users to trade ERC-20 tokens directly from their wallets. Uniswap was launched in 2018 by Hayden Adams, and it gained significant popularity for its unique automated market-making mechanism. The name "Uniswap" comes from the combination of "universal" and "swap." It has become a key player in the world of decentralized finance (DeFi) and has revolutionized the way cryptocurrency trading is conducted.
Uniswap, a decentralized exchange protocol built on the Ethereum blockchain, offers several benefits compared to its direct competitors. These advantages contribute to its popularity within the decentralized finance (DeFi) space.
One of the main benefits of Uniswap is its simplicity and user-friendly interface. Unlike centralized exchanges, which require users to create accounts and go through a KYC process, Uniswap allows for instant and permissionless trading. This makes it accessible to anyone with an Ethereum wallet.
Additionally, Uniswap operates on a completely trustless and transparent system. It uses a smart contract mechanism that eliminates the need for intermediaries, such as order books or traditional market makers. This ensures that trades are executed directly between users and without any potential for manipulation.
Another key advantage of Uniswap is its liquidity pools. Users can contribute their cryptocurrency to these pools and earn passive income by collecting a portion of the trading fees generated by the protocol. This incentivizes liquidity providers and helps to ensure sufficient liquidity for users to trade seamlessly.
Compared to centralized exchanges, Uniswap offers better privacy as it doesn't require users to disclose their personal information. Additionally, the absence of intermediaries reduces the risk of hacking or theft since users have full control over their funds.
While Uniswap has numerous benefits, it is important to note that there are other decentralized exchanges in the market, such as SushiSwap and Balancer, which offer similar functionalities and advantages. Users should do their own research to choose the platform that best suits their needs.
Uniswap is a decentralized cryptocurrency exchange that runs on the Ethereum blockchain. It operates using an automated market-making mechanism called Automated Market Maker (AMM).
Uniswap utilizes smart contracts to enable peer-to-peer trading without the need for intermediaries or traditional order books. It leverages liquidity pools, which are pools of tokens locked in smart contracts, to facilitate trading. These pools ensure that there is always liquidity available for any token pair listed on the platform.
The underlying technology behind Uniswap is based on the concept of Constant Product Market Maker. This model relies on a mathematical formula called the constant product formula, which ensures that the product of the quantities of both tokens in a liquidity pool remains constant.
When a user wants to make a trade on Uniswap, they need to swap one token for another. The trade is executed by interacting with the smart contract that holds the liquidity pool. The smart contract automatically calculates the exchange rate based on the constant product formula and executes the trade accordingly.
Uniswap has gained popularity due to its decentralized and permissionless nature, which allows anyone to participate in trading without requiring KYC or trust in a central authority. Furthermore, it has played a significant role in facilitating the rise of decentralized finance (DeFi) by providing a robust and efficient platform for swapping tokens.
Overall, Uniswap's functioning relies on smart contracts and liquidity pools to provide a decentralized exchange experience on the Ethereum blockchain. It has become one of the most widely used decentralized exchanges in the cryptocurrency space.
DIA has a comprehensive approach to fetching trade data from various decentralized finance (DeFi) and non-fungible token (NFT) exchanges. The specific process depends on the type of exchange being referred to in the question.
For centralized exchanges such as Coinbase, Kraken, and Binance, DIA utilizes scrapers that directly collect trades from the exchange databases. This is done using Rest APIs or WebSocket APIs. The frequency of data collection varies from 1 to 7 seconds, depending on the exchange. By retrieving data as close to the source as possible, DIA ensures high precision in the collected data.
In the case of decentralized exchanges like Uniswap, curve.finance, and PancakeSwap, DIA takes a different approach. It collects data from various blockchains by subscribing to swap events in liquidity pools. This allows DIA to retrieve trading data directly from the blockchain itself, enhancing the accuracy of the data collected.
When it comes to NFT marketplaces, DIA captures live trading data by monitoring the smart contracts of integrated marketplaces. The retrieval period for this data ranges from 20 seconds to 1 minute, ensuring real-time coverage of all NFT transactions. By focusing on the broader NFT market and excluding unreliable bids and offers data, DIA maintains data precision. Notable NFT integrated exchange sources for DIA include Blur, X2Y2, OpenSea, and TofuNFT.
Overall, DIA's data management strategy combines direct scraping from centralized exchanges' databases, blockchain subscription for decentralized exchanges, and real-time monitoring of NFT marketplaces' smart contracts. This comprehensive approach enables DIA to provide highly accurate and customizable price feeds for various trading platforms.
DIA employs a two-step process to build price feed oracles using Uniswap trade data, with variations depending on whether we are referring to DeFi or NFT exchanges.
For DeFi exchanges, such as Uniswap, the first step is to clean the data and detect outliers. This ensures that the price estimation process is resilient against trades that deviate significantly from the market price due to market manipulation, errors, or flash crashes. DIA achieves this by applying an Interquartile Range (IR) filter, which identifies and excludes data points lying outside of an acceptable range relative to the interquartile range. Only trades falling within the "middle" quartiles move forward into further processing.
The second step involves applying price determination methodologies to retrieve a single USD price value for each asset. DIA utilizes various filters to obtain a price point from the collection of trades. One example is the Volume Weighted Average Price (VWAP) methodology, which takes into account the different volumes of trades. Another example is the Moving Average with Interquartile Range Filter (MAIR) methodology, which creates blocks of trades for each second within the queried time range and calculates the weighted average price.
In the case of NFT exchanges, the process differs. DIA determines the floor price of an NFT collection by processing the on-chain trade data through cleansing filters to exclude market outliers and manipulation techniques. Then, a pricing methodology is applied to determine the final price point. One offered methodology is the Floor Price, which provides the lowest sale price of the NFT collection recorded on the blockchain during a given time window. DIA also offers advanced methodologies, such as the Moving Average of Floor Price, to provide more realistic and reliable NFT floor prices.
By implementing these processes and methodologies, DIA ensures accurate and representative price feed oracles for both DeFi and NFT exchanges, enabling users to access reliable price data for cryptocurrencies, NFTs, Liquid Staked Tokens (LSTs), and more.
Instead of distributing pre-calculated data feeds, DIA covers the whole data journey from individual trade collection, and computation to the last mile of the feed delivery.