How does a DEX quote prices without an order book?
First, what it is: Uniswap V2 charges a 0.3% fee on every swap, which used to go entirely to LPs. After governance enabled protocol fees, the protocol takes 0.05% from Ethereum mainnet V2 pools, while LPs receive 0.25%.
Why it works this way: An AMM’s price is calculated solely from the ratio of the two tokens in the liquidity pool. When it differs from the external market price, arbitrage trades push the quote back toward the external price.
$UNI is the governance token of Uniswap, the project that popularized AMMs.
Don’t follow along just because everyone around you is buying.
#UNI
First, what it is: Uniswap V2 charges a 0.3% fee on every swap, which used to go entirely to LPs. After governance enabled protocol fees, the protocol takes 0.05% from Ethereum mainnet V2 pools, while LPs receive 0.25%.
Why it works this way: An AMM’s price is calculated solely from the ratio of the two tokens in the liquidity pool. When it differs from the external market price, arbitrage trades push the quote back toward the external price.
$UNI is the governance token of Uniswap, the project that popularized AMMs.
Don’t follow along just because everyone around you is buying.
#UNI