Welcome to a new video from Bitcoin Boost! This video explains what Uniswap is and how it works. Uniswap is a protocol for automated token exchange on Ethereum. Uniswap is designed to solve the liquidity problem of decentralized exchanges. Most exchanges maintain an order book and facilitate agreements between buyers and sellers Uniswap smart contracts contain liquidity reserves of various tokens and transactions are executed directly against these reserves. Prices are determined automatically using the constant mechanism of the product market maker.
This ensures that the total reserves remain in relative equilibrium. The link to Uniswap is below this video in the entry. If you press 'Uniswap Info' on the main Uniswap page, you will see the statistics of Uniswap, the Ethereum price, the Uniswap liquidity, the 24-hour volume, the amount of transactions in 24 hours. Below are the different pairs and the tokens. When you press a token or a pair, you can see there from the statistics. Back on the main page of Uniswap, we go to 'Uniswap Interface'. There you press 'Connect A Wallet'. Here you have to connect a wallet, we will link our MetaMask wallet. Do you not yet have a MetaMask wallet or are you not yet familiar with MetaMask, then watch our previous video about MetaMask, the link here is in the credits of this video. When your wallet is connected, the menu is automatically on 'Swap'. You can now choose which tokens you want exchange, one of the two tokens must be in you wallet that is linked. You always have some ETH in your wallet necessary for the transaction costs.
When you have chosen both tokens and the amount, press 'Swap'. You can still increase the deadline in minutes, but that is not necessary quickly. Finally, press 'Conform Swap' and then you still have to confirm the transaction via your wallet. The transaction has been added to the blockchain, you can now track it via Etherscan. As soon as the transactions are completed, you will see the swapped tokens in your wallet. If you press 'Send' in the Uniswap Interface Menu, you can easily send tokens. You choose the token, the quantity and then enter you enter the wallet address where the tokens should be sent to and then press 'Send'. You still have to confirm the transaction via the linked wallet and you can then follow the transaction via Etherscan. No company is involved in Uniswap as an exchange, no KYC is needed, no one is involved who mediates. The other thing with Uniswap is that anyone can have a can create new exchange pair in a new liquidity pool for each token.
So it is completely open and there are no listing fees. If you press 'Pool' in the Uniswap menu, you can press 'Join A Pool'. There you can choose the pair for the liquidity pool for which you have liquidity want to provide. So we are going to have extra liquidity provide for the KNC / ETH liquidity pool. When someone comes in and wants to trade KNC for Ethereum on Uniswap, our liquidity may be tapped. So the amount we put into it can shift more he Ethereum or more move to KNC based on the transaction to take place.
But in principle you have to put both tokens in the liquidity pool that you want are an equal amount in value in stacks. Liquidity providers receive a fee from the people who execute swaps, there is a transfer fee of 0.3 percent that Uniswap charge to the swappers. Which is then distributed over all liquidity providers in the specific pool. This is done on the basis of the quantity / percentage of the pool they offer. So if you are with a large amount in one pool, you have a larger percentage of the pool. Then you will also receive a larger part of that 0.3 percent. When you have chosen the amounts you want to put in your liquidity pool, press 'Approve'. Now you have to confirm that you want to pay for the gas to authorize the tokens. Now that the transactions have been confirmed, we have given the smart contract access to our KNC. And can we add the liquidity to the liquidity pool. Then go back to 'Pool' in the menu and then press 'Add Liquidity To This Pair Instead'. Then you choose the tokens that are in the liquidity pool, for which you had chosen and then press 'Supply' and then press 'Conform Supply'.
Under 'Your Pooled Liquidity' you will now see the liquidity pool you are in. My pool share is very small 0.01 percent of the pool. If you want to increase that, you have to put more liquidity in the pool. If you press the pair you can via 'Add Extra Tokens', increase your pool share. If you press 'Remove' you can reduce the pool share, by partially taking back your tokens or you cut it completely and take back the full stake. Whenever new ETH or erc20 token is inserted into a Uniswap liquidity pool, you will receive a pool token, which is also an erc20 token. Pool tokens are created when money is deposited into the pool and when erc20 tokens can be exchanged pool tokens freely, moved and used and other Dapps. When money is recovered, pool tokens are used. That actually means destroyed. Each pool token represents one users share of the total assets of the pool and part of the trading fee of 0.3% of the pool.
This was the end of the Uniswap video. If you have any questions or comments, I would like to read them in the comments..