How Does Uniswap Work?

Uniswap’s network is designed to facilitate the buying and selling of crypto assets in a way that mirrors a traditional exchange.

It does this by maintaining smart contracts in which users can deposit crypto assets that can be programmatically accessed by traders. Uses who trade against assets in the pool pay a fee that is then distributed to all liquidity providers proportionally, based on their contribution to the pool.

Uniswap’s liquidity pools Each Uniswap pool holds two tokens, which together represent a trading pair for those assets.