Uniswap
Crypto Overview
Understanding the Intended Utility
Uniswap (UNI) is the governance token of the Uniswap protocol, which is the largest decentralized exchange (DEX) on the Ethereum blockchain. The token's primary purpose is to enable holders to participate in the governance of the protocol, voting on key decisions about protocol upgrades, fee structures, and treasury management.
Business Model & Actual Usage
Uniswap's protocol facilitates peer-to-peer trading of cryptocurrencies through automated market makers (AMMs), eliminating the need for traditional order books. The UNI token serves as a governance mechanism for this ecosystem, with holders able to propose and vote on protocol changes. The protocol generates revenue through trading fees, with 0.3% charged on each trade, of which a portion can be directed to the protocol treasury based on governance decisions.
The platform shows significant real-world adoption with over $1.3 trillion in all-time trading volume and consistently ranks among the top DEXes by daily trading volume. The protocol has undergone multiple iterations (v1, v2, v3, v4) showing continuous development and improvement.
Token Distribution & Governance
The initial distribution of UNI tokens included allocations to team members, investors, and advisors (40%), governance treasury (43%), and community members (17%). Team and investor tokens were subject to 4-year vesting periods. The protocol maintains active governance participation with regular proposals and voting activity.
Technical Implementation
The protocol operates through smart contracts that enable permissionless token swaps. The technology does not inherently involve interest-bearing mechanisms or gambling features. While the protocol can be used to trade tokens of any nature, including those related to prohibited industries, the core technology itself is neutral and serves a legitimate market-making purpose.
Crypto Impact
To assign a comfort level investing in Uniswap from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to Uniswap.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.