Decided Uniswap is safe for your level of risk tolerance? You can get Uniswap on Gemini today.
Of all decentralized exchanges (DEXs), Uniswap is the most popular, with over $5 billion in assets locked up; its governance token UNI holds a market cap of just over $2.5 billion, according to CoinMarketCap.
When the lending and borrowing exchange Celsius froze all transactions, many begab to wonder whether their digital assets were being held by trustable entities.
Uniswap is a permisionless exchange protocol on Ethereum. Uniswap does not have custody any of its users funds, so a Celsius-type event is not possible. Despite this, you need to be aware of general precautions when it comes to getting started with decentralized finance.
Unlike the typical exchange, Uniswap operates 24/7 as an automated market maker (AMM), using its liquidity to provide users with service around the clock. This open and automated system is largely able to operate on its own, and the limited governance it does require is operated by a decentralized autonomous organization (DAO).
How is Uniswap Secured? What is UNI Token?
Uniswap uses the ERC-20 standard to operate its governance token UNI. The ERC-20 is a type of token on the Ethereum network, so the security of the token and DAO depend on the security of Ethereum. While Etheruem has held up well to this point, it is an ever-evolving ecosystem. The upcoming Ethereum Merge presents a number of risks, meaning that overlapping dangers to the Ethereum ecosystem could affect Uniswap.
Beyond the relationship between the chains, Uniswap founder Hayden Adams and Ethereum Co-founder Vitalik Buterin are friends. The two are colleagues through Ethereum development, with much of the inspiration behind Uniswap coming from Buterin.
While over 300,000 DAO members help to secure and govern Uniswap, crypto faces security risks. However, Uniswap has continued to show great decentralization, innovation and staying power in this marketplace.
Risks of Investing in Uniswap’s Governance Token, UNI
The key risk of investing in Uniswap is the extreme market volatility seen over the past few weeks. This trend can cause panic to cash out, and if exchanges are illiquid they could be unable to pay back their users.
Along with the recent market selling pressure and liquidity risks, Uniswap has many competitors such as SushiSwap, PancakeSwap, and Aave. When it comes to DEX competition, key aspects are the amount of liquidity, trust and quality of user interface. Uniswap has delivered on each of these aspects so far, making it a fairly safe bet for a crypto investment.
Is Uniswap Safe?
Uniswap as an exchange has proven safe. It holds a treasury of over $1.5 billion in assets, helping to ensure liquidity. Adams is held in high regard in the crypto community. Unlike many projects, Adams is a public figure, with his reputation in part backing the exchange.
As far as the token goes, many like the coin, as Uniswap has proven successful and has a high ceiling for growth. Rocky market conditions and strong competition are dangers to be noted when calculating the safety of the token.
Where to Invest in Uniswap’s Governance Token, UNI
You can get UNI from a classic centralized exchange, like Coinbase Global Inc. (NASDAQ: COIN). If you are supporting the decentralized ethos you may as well get it straight from the source, through the Uniswap exchange. With a non-custodial wallet, you can easily get set up and start trading UNI along with a long list of other coins and tokens.
1 Minute Review
Coinbase is one of the Internet’s largest cryptocurrency trading platforms. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally simple to buy and sell major cryptocurrency pairs.
You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality.
Though Coinbase doesn’t offer the most affordable pricing or the lowest fees, its simple platform is easy enough for complete beginners to master in as little as a single trade.
- New cryptocurrency traders
- Cryptocurrency traders interested in major pairs
- Cryptocurrency traders interested in a simple platform
- Simple platform is easy to operate
- Comprehensive mobile app mirrors desktop functionality
- Coinbase Earn feature rewards you with crypto for learning about available coins
- Higher fees than competitors
1 Minute Review
Gemini is a cryptocurrency exchange and custodian that offers investors access to over 100 coins and tokens. Founded in the US, Gemini is expanding globally, in particular into Europe and Asia. Offerings include both major cryptocurrency projects like Bitcoin and Ethereum, and smaller altcoins like Orchid and 0x.
Gemini is 1 of the only brokers with multiple platform options based on skill level. New investors will love the streamlined interface of Gemini’s mobile and web apps, while advanced investors might appreciate all the tools that come with ActiveTrader.
In addition to a host of platform choices, Gemini users also have access to insured hot wallets to store tokens without worrying about digital asset theft. Learn more about what Gemini can do for you in our review.
- New investors looking for a simple mobile and web app
- Day traders looking to use technical analysis tools
- Users looking for a 1-stop-shop to buy, sell and store all of their cryptos
- Easy and quick signups — can get started in as little as a 5 minutes
- Multitude of platforms to accommodate traders of all skill levels
- Hot wallets include insurance to protect your from theft and hacking attempts
- Charges both a commission and a convenience fee for users buying and selling through the desktop or mobile app
While no notable hacks of the Uniswap exchange have been reported, UNI tokens have been stolen from wallets. Another issue is when users forget their keys or password, losing their UNI forever. Owning your keys comes with its own set of risks and taking precautions is of utmost importance. The safest option is to own a hardware wallet.
Best Hardware Wallet for Uniswap
Whether you are buying UNI or swapping assets on the platform, it is important to keep your crypto safe. Many people transfer their tokens into a hardware wallet to keep their keys off the internet, further protecting them from scams. A popular hardware wallet used by crypto holders is Ledger Nano S.
Best Hardware Wallet
The Ledger Nano S is a leading hardware wallet trusted by many crypto users. While a software wallet is useful for connecting to decentralized applications such as Uniswap, a hardware wallet provides another layer of security.
buy now securely through Ledger Hardware Wallet’s website
1 Minute Review
Launched in 2014, Ledger has transformed into a fast-paced, growing company developing infrastructure and security solutions for cryptocurrencies as well as blockchain applications for companies and individuals. Born in Paris, the company has since expanded to more than 130 employees in France and San Francisco.
With 1,500,000 Ledger wallets already sold in 165 countries, the company aims at securing the new disruptive class of crypto assets. Ledger has developed a distinctive operating system called BOLOS, which it integrates to a secure chip for its line of wallets. So far, Ledger takes pride in being the only market player to provide this technology.
- ERC-20 tokens
- All experience levels
- Easy to set up and use
- Supports more than 1,500 different digital assets
- Tamper proof
- Long-lasting battery
- Bluetooth connectivity features
Cryptocurrency Market Outlook
The crypto market has been under intense pressure; as Bitcoin continues to plummet, altcoins have crashed even more fiercely. This macro trend has crushed Uniswap in terms of price, but the price drop has far more to do with the market sell-off than it does with Uniswap’s core fundamentals or safety.
Is Uniswap’s Governance Token, UNI, a Safe Investment?
The current market conditions make Uniswap a risky investment. With investors rushing to sell their assets, risk-on assets like crypto are typically some of the first to go. If the selling continues, an attractive buying price may appear but for now be cautious with this current bear market.