Uniswap is a DEX platform fully deployed on the Ethereum chain, based on & LDQuo; Automatic market making by constant product & LDquo; Model [reserve pool model, on-chain matchmaking, on-chain clearing] and facilitate automated exchange transactions between ETH and ERC20 token digital assets. Uniswap's trading design differs from the traditional limit order model in that the Uniswap protocol creates a single liquidity reserve for each ETH and ERC20 token trading pair. The liquidity reserve for each token is a trading smart contract that holds a certain number of ETH and ERC20 tokens. The Uniswap trading contract acts as an automated market maker (AMM) and determines the exchange rate between ETH and ERC20 tokens based on the relative amount of each token in reserve. Instead of filling out buy and sell orders, users trade with the pool by adding one token and removing another. That is, two certain amounts of crypto assets are put into a smart contract, and the trading price of the token can be automatically calculated based on the automated market maker algorithm. The point of the algorithm is that the product of the quantities of two assets exchanged remains a constant, a constant product market maker, regardless of the volume of trading. The formula is x*y=k, where x and y are the number of tokens in the liquidity pool, and k is the product. To keep k constant, x and y have to move in opposite directions.   For example, suppose the DAI/ETH reserve pool was initially set at 150,000 DAI and 1,000 ETH, which creates an exchange rate of 150DAI/ETH. If the user attempts to purchase 10,000 DAI from the DAI/ETH reserve pool, then the number of ETH in the reserve pool increases and the DAI is removed from the pool. This puts downward pressure on the DAI/ETH ratio and increases DAI prices. The price depends on the order size in relation to the DAI/ETH reserve size.   Uniswap's automated market-making model will provide ongoing liquidity. Instead of specifying a price to buy or sell ETH as traditional market makers do, or multiple bids and quote order management, users simply submit funds to the exchange's liquidity pool, and Uniswap smart contracts automate market making. The market maker receives a share of the liquidity contribution for trading costs incurred in the pool.   Uniswap allows anyone to set up a liquidity pool based on ETH and any ERC-20 currency transaction pair and earn revenue by contributing liquidity shares to this liquidity pool and participating in a share of transaction fees; The same can be done by withdrawing liquidity and destroying shares. Unisway will also allocate the full 0.3% fee for each transaction in the liquidity pool to the liquidity provider in proportion to its contribution share. Uniswap does not charge a transaction fee itselflg...[Expand]