Uniswap History

Utkarsh Rai
Coinmonks

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Uniswap Logo

The original idea of a decentralized exchange, which would later be known as Uniswap, was suggested by Vitalik Buterin in 2016 to employ an on-chain automated market maker with some particular features. The following year, a former mechanical engineer at Siemens named Hayden Adams started working on Vitalik’s idea and turned it into a working product. The protocol got a grant of $100,000 from the Ethereum Foundation, whilst also receiving multiple other grants. Uniswap was finally launched in November 2018 and has gained a lot of traction. Multiple fundraising rounds led to the expansion of the Uniswap’s team in the upcoming months.

Hayden Adam was pushed to write smart contracts by his friend Karl Floersch, who at that time was working in Casper FFG at the Ethereum Foundation. It was because of Karl that Hayden was able to meet Vitalik, who told him to rewrite the contracts of Uniswap in Vyper and then apply for the Ethereum Foundation grant.

On the 4th day of Devcon, Hayden had decided to launch Uniswap and thus deployed the contracts on the Ethereum Mainnet on the 4th day of Devcon. Uniswap received heavy support, collaborations, and new ideas to implement.

Uniswap launch day tweet by Hayden on the last day of Devcon

Uniswap was going to be named UniPeg by Hayden, but Vitalik told Hayden to name it Uniswap.

The inventor of Uniswap is actually quite difficult to figure out. Alan Lu was the first person to figure out the idea of the X * Y = K(XYK model) on Ethereum. Martin Koppleman of Gnosis told Vitalik Buterin of Gnosis about the idea and Vitalik began publicizing it due to its potential. Hayden was inspired by the idea and created a specific implementation of the XYK model.

Uniswap stands apart from other products as it tackles the problem of uneven spread for illiquid assets in the list of trading exchanges. Each different individual can be identified as the buyer and seller. Using uniswap anyone can become a liquidity provider by depositing assets into a pool and earning fees based on the trading volume and activity of the pool. As uniswap’s pooled liquid smoothens the depth of the trading book, there are no more large holes or ask spreads. There is no involvement of heavy calculations. It provides a passive way to earn some fees while providing liquidity to the pool. Uniswap has no listing fees, almost negligible gas fees, and is more decentralized focused.

Uniswap launched their own token named UNI which was allocated to all the people who have used the platform before. The token was heavily traded on both centralized and decentralized exchanges increasing the price of the token to as high as $8. The liquidity providers were rewarded with more tokens. 1 billion UNI tokens were allocated in the following manner:

The launch of the UNI token made the platform even more decentralized and self-sustainable while preserving its autonomous qualities.

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Utkarsh Rai
Coinmonks

TryHackMe [0xC GURU] | Cybersecurity enthusiast | Computer Science Student | Writer, Thinker, Coder