What Is Uniswap (UNI)? The DEX and Its Governance Token

Uniswap (UNI) is a decentralized exchange, a set of smart contracts on Ethereum and other networks that lets you swap tokens straight from your own wallet. UNI is the token its holders use to vote on changes to the protocol, and it trades like any other crypto token. You don't need any UNI to swap on Uniswap.

Uniswap's on-chain governor had handled 94 proposals by the early-November close, and 74 of them passed. All four that failed drew more votes for than against but fell short of the 40 million yes votes a proposal needs to pass. Each one died for lack of yes votes, against a bar of only about 4% of all UNI.

What Is Uniswap Used For?

Mostly for swapping one token for another without handing your coins to anyone. You connect your own wallet and sign the trade, and the swap settles on-chain against a pool of tokens that other people deposited.

Every swap is a blockchain transaction, so on top of the pool's fee you pay network fees in ETH when you trade on Ethereum. A first swap needs a wallet holding some ETH for that fee, plus the token you want to trade away. Your wallet also asks you to approve each token once before Uniswap's contracts can move it, and that approval is a transaction of its own.

The other big use is earning those pool fees. Anyone can deposit a pair of tokens into a pool, which makes them a liquidity provider, and collect a share of what traders pay to swap there. The protocol's code lets anyone create a pool for any two tokens, so no listing team decides what trades there.

There's also Unichain, a separate blockchain built for decentralized finance, where Uniswap Labs is the main technical provider.

How Does Uniswap Work?

Each Uniswap market is a pool holding two tokens, such as ETH and a dollar stablecoin. When you swap, you put one token in and take the other out, and in the simplest pools the price comes from the ratio between the two balances.

In version 2, the pool contract keeps a 0.3% fee from what you send in and rejects any trade that would shrink the two balances multiplied together. That rule is why a big order gets a worse average price than a small one, a cost traders call slippage.

Picture a pool holding 100 ETH and 300,000 USDC, so ETH costs $3,000 there. Buy 10 ETH and you pay about 33,300 USDC before the fee, near $3,330 each. The pool's price ends at roughly $3,700. One ETH from the same pool would have cost about $3,030. Deep pools keep that gap small, so pool size is the first thing a trader should check.

Most of the fee stays in the pool, which is how liquidity providers get paid. A big price swing between the two tokens can still leave them worse off than holding both in a wallet.

Version 4 runs every pool from a single contract and lets a pool launch with a hook, a separate program that runs at set points such as before or after each swap.

In a pool set up for a variable fee, only its hook can change that fee, so the fee can move from one swap to the next. The points where a pool's hook runs are locked in when the pool is created.

Is Uniswap Decentralized?

Partly. The pools run on public smart contracts and you trade from your own wallet, so no company holds your coins mid-trade. Big protocol switches such as turning on fees sit with UNI holders, and their voting record shows how little of the supply takes part.

Votes run through Governor Bravo, the contract that has counted them since November 2021. The token's code only counts a UNI in a vote once its holder delegates it, to their own address or to someone else's. Anyone with more than 1 million delegated UNI can put a proposal up.

A proposal passes only if at least 40 million UNI vote yes, about 4% of all UNI, and the yes votes outnumber the no votes. Abstentions and no votes don't count toward that 40 million.

The first eight proposals ran on two earlier governor contracts, so the count starts at number 9.

Proposal 71 missed by less than a million yes votes even though 49.5 million UNI voted on it, because most of the rest abstained. Proposal 88 asked for funding so an outside team could support Uniswap v4 and Unichain in its app. It drew about 3,000 no votes and still failed.

Winning votes run close to the line too. Of the 74 that passed, 21 had fewer than 45 million yes votes, and the smallest had 40.5 million.

So the real threat to a Uniswap proposal is apathy. A plan almost nobody opposes still dies when too little UNI turns up to back it.

How Many Uniswap Coins Are There?

Exactly 1 billion UNI existed at the early-November close, the same amount the contract created at launch in September 2020. UNI is an ERC-20 token, Ethereum's standard token format, and it has kept that one contract since launch with no migration or rebrand.

The token's code lets Uniswap's governance mint more, at most 2% of the supply in one go and no more than once every 365 days, from January 2024 on. That power had never been used by the early-November close. A mint would lift the total above 1 billion and reset the clock for the next one, and neither had moved.

About 114 million UNI sat at 0xdead, an address no one can spend from. That's roughly 11% of all UNI. The token has no burn function, so those coins still count in the 1 billion while staying out of reach for good.

Nearly all of it arrived from late December 2025 on, after UNI holders voted to send treasury UNI there and to retire more with protocol fees. What that flow could mean for UNI's price is the subject of our Uniswap price prediction for 2026 to 2030.

How to Buy UNI Safely

UNI trades on Phemex as two futures pairs, UNI/USDT and UNI/USDC, and as a UNI/USDT spot pair where you own the coins outright. Both futures pairs rose almost 5% on the day of the early-November close, the largest one-day gains among Phemex's crypto perpetuals that day. UNI/USDT had gained that much or more on about 13% of its days from February 2024 to early November.

Futures use leverage, and a leveraged position is closed automatically if losses push its margin below a set minimum.

1. Log in to your Phemex account, or open one, and add USDT or USDC.

2. To own UNI, open the UNI/USDT spot market and place a market order at the going price or a limit order at your own.

3. To trade UNI's price with futures, open UNI/USDT or UNI/USDC and set your leverage before you size the order.

4. To hold UNI yourself, withdraw it to a self-custody wallet and check that the wallet supports the network you pick.

5. To use UNI's vote, hold it on Ethereum and delegate it from that wallet to your own address or to someone you trust. A futures position holds no tokens, so it carries no vote.

Frequently Asked Questions

Is Uniswap safe?

The main risk sits in what you trade. Anyone can open a pool for any token, so copycats using the UNI name can trade on Uniswap too. Check a token's contract before you buy, and learn how to audit a new crypto contract for anything unfamiliar.

What is Uniswap v4?

It's the fourth version of the protocol, which went live in January 2025. All its pools live in one contract, and each pool can attach a hook, a small program that adds features such as a fee that changes from trade to trade.

Is UNI worth buying?

That's your call, based on what UNI gives you. Delegated UNI gets you votes over the protocol, and protocol fees have gone toward retiring UNI since late 2025. Against that, governance can still mint up to 2% of supply a year, and the price can move 5% in a day.

Bottom Line

For a trader, Uniswap is decentralized where it counts, because the pools run on-chain and your coins stay in your wallet until the trade settles. The governance behind it is thinner than the word suggests, and a single large delegate staying home can sink a vote that hardly anyone opposed.

That makes UNI an odd kind of vote. It carries real power over fees and the treasury, but a typical vote draws about a twentieth of the supply, so whoever turns up decides what Uniswap becomes.

What to watch: the yes count on the next proposal that touches fees or the treasury, measured against the 40 million it needs.

Disclaimer: This article is for informational purposes only and is not financial advice. Cryptocurrency trading involves substantial risk. Always do your own research before making investment decisions.