Hello friends.. today let's see about UNISWAP decentralised exchange Exchanges we use daily are centralized exchanges Binance, Bybit and wazirx Its a centralized exchange, we send our coins to their wallet and trade If anything happens with the exchange we lose our coins Cryptocurrency main purpose is to be in financial control why still we use a centralized exchange why we haven't switched to decentralized exchange whats the advantage and disadvantage among both and let's see how to use UNISWAP and trade for you reference let me list De-centralized and Centralized Centralized exchange we trade using order book In De-Centralized exchange new mechanism "Liquidity pool" is Introduced Lets see in detail in other video For now let me explain about advantage and disadvantage among both And learn how to use UNISWAP Main advantage of centralized exchange is high liquidity For day trading we need high liquidity and many features Crypto to INR changing functionality Disadvantages are security concern we don't know who hacks and Price manipulation we trust them and deposit in their wallet These are main advantages and disadvantages In decentralized exchange main advantage is all trades executes in block chain and smart contract Privacy in that and we use our personal wallet so we own the private key we can trade all ERC20 Tokens Its useful for ICO Disadvantages are low liquidity is one all our trades in block chain and smart contract Time taken for that and limited features compare to Binance these are the advantages and disadvantages Now lets see how to trade in UNISWAP You need Metamask web 3.0 wallet can download from chrome extension Once downloaded take the private key and transfer funds visit UNISWAP.ORG website from there lets see the features in details two main options, swap to exchanage coins.
pool to provide liquidity pool First begin with SWAP, so connect with Meta mask wallet on right connect to wallet click on the popup, can view all web 3.0 wallets let me select Meta Mask as I use that once you click see the popup can create multiple address, for D5 I have an address let me connect that so connect now can view the Ethereum quantity I hold in wallet Number of units tokens I hold lets swap and see From where we change the coins , so select that coin To is for changing the coin that you need select that So in from let me select 0.2ETH to swap in input let me select DAI its a stable coin DAI(symbol) It shows 75 DAI but Its just a estimation, there are 3 factors for that estimation. Those are Price Impact slippage Liquidity provider fee Based on 3 calculation final amount is received While swap lets see in detail. If we visit the order It shows estimated 75 DAI For that break even is given below Minimum received is Slippage Slippage is when we swap, the price moves unfavourable total transaction will revert back to us at right corner you can set Slippage tolerance 0.5 is default let me leave as it is.
If required can reduce than that. Time allowed for transaction can be set in the transaction deadline. Default is 20 minutes Next that we gonna watch is Price impact Price impact is based on the pair volume we are going to swap if it is less then the liquidity pool volume it would be in negative ETH DAI is the pool has more liquidity so there isn't any problem while choosing decide carefully next is liquidity provider fee Like we pay fees for trading we pay fee for liquidity provider for SWAP its constant 0.30% calculating all 3 we receive final amount Before swapping lets see one last feature Add a cent option is also given Directly if you want to send to other wallet you can paste that, or it goes to Meta Mask wallet that is the option all about.
Since I don't use let me cancel and remove Estimate shows 75 DAI before swap I need 100 DAI so I add that now estimation will impact on ETH all estimation will impact in ETH I get 100 DAI for sure Let me click swap Now MetaMask opens, now based on gas fee and total Shall give only confirmations now gas fee is 2.4$ once confirm, it shows pending status. Block explorer shows current status & Block confirmation details click on to blue tick mark It shall directs to block chain explorer once confirmed, check the pending status It shall show green tick to confirm SWAP can verify even in Block chain it shows confirmed, lets check in MetaMask let me open Meta Mask 100 DAI is received Now Swap is done, lets see liquidity pool Liquidity pool is decentralized in UNISWAP Through this mechanism we can gain profit too.
2 options available create a pair can create liquidity pool for any ERC Token Those tokens need not to be available in it Adding ERC20 contract address can add that coin how to make profit is that adding liquidity 0.3% fees is received for every swaps For this video I am not creating new liquidity pool For existing liquidity pool I am going to provide liquidity select option add liquidity and select the pair you need to add liquidity. Important rule is 1:1 ratio is followed if I select ETH and DAI it should be ETH 100$ and DAI 100$3 Its should be equivalent like 10$ ETH and 10$ DAI Both should be equal to provide liquidity I am selecting ETH and DAI pair to provide liquidity I shall provide 100 DAI= 100$ equivalent 100$ ETH then only I can participate in pool Let me select DAI and approve it from my MetaMask wallet I shall confirm after I confirm I can directly supply before supply check share of pool for the percentage that percentage is less because, for that pair ETH and DAI has lots of liquidity already if I provide 100$ it may not provide big returns or impacts so select pair trade more and liquidity provided less that is profitable for example I shall show another pair, I shall provide same 100% but it shows 15% share of pool so in total pool 15% is our liquidity fee for that will be profitable for us old ETH DAI pair lets confirm once confirm Meta Mask opens same process check and confirm once done transaction is submitted once done check pending status once transaction done blue tick is shown it denotes in block chain and smart contract our liquidity is added once done you can add more liquidity if required for that visit main page select add liquidity to add more Remove helps to take back the provided liquidity click on analytics you can view the total profit from liquidity pool Fee earned is the profit we have add just now, henceforth check daily it would show in the graph below how many liquidity pool you have added can view here Your swap details and total history in analytics This analytics is too useful Lets view the overview with the analytics clicking on chart view the main page of analytics Total liquidity of UNISWAP is available 24 hours volume is visible which coin has high liquidity, top list of coins chosen given Top pair selection is important, while selecting you can view which pair provides higher liquidity if you provide for same you cant gain profits check which has liquidity less and 24 hours volume is more providing liquidity for that pair is profitable check out the liquidity equivalent to that it has volume also search out for coins and use this strategist and invest in liquidity pool it is helpful for that, use analytics for that I think i have covered everything For any further doubts kindly comment below the video Do like the video, and don't forget to subscribe Do share with friends Lets meet in next video THANK YOU!