Uniswap: what the exchange protocol is, how it works and who runs it

What Uniswap is

Uniswap is a protocol for swapping tokens on public blockchains. Instead of matching buyers and sellers on an order book, each pool holds reserves of two tokens and prices trades from those reserves. Uniswap's developer documentation describes it as a decentralized exchange protocol on Ethereum that uses an automated market maker (AMM), and Uniswap says the protocol was created by Hayden Adams in 2018. It cites more than $3 trillion in cumulative trading volume, a company figure.

The name covers several distinct things:

• The Uniswap Protocol: smart contracts deployed on Ethereum and many other networks. Anyone can trade with them or build on them.
• Uniswap Labs: the company that builds the Uniswap web app, the Uniswap Wallet, the Trading API, UniswapX and the Unichain network. The v4-core licence names Universal Navigation Inc. as the licensor.
• Uniswap Governance and UNI: UNI holders vote on protocol changes such as fee settings.
• The Uniswap Foundation: an independent 501(c)(4) nonprofit that, in Uniswap's words, stewards protocol governance.

The web app is only one way in. Because the contracts are public, other front ends and trade aggregators can route orders through Uniswap pools as well.

How Uniswap works

The original design uses the constant-product formula x × y = k, where x and y are the two reserves and k must stay the same or rise after every trade. Buying one token removes it from the pool and adds the other, so each further unit costs more. That is why a large trade relative to a pool's size moves the price more. Our explainer on how automated market makers work walks through the arithmetic.

The three live versions differ mainly in how liquidity providers (LPs) supply capital:

Hooks in v4 are external contracts that a pool creator attaches to run custom logic around swaps and liquidity changes. They can set dynamic fees or charge an extra hook fee, so in v4 the fee a trader pays is a property of the specific pool. In v3 and v4, only liquidity inside the current price range earns fees, and LPs collect them manually.

Uniswap's documentation says the core contracts "are not upgradeable" once deployed and that no party can pause them, reverse trades or change their behaviour retroactively. Governance can only switch fee mechanics on supported pools within predefined limits.

Uniswap fees

A swap can carry four kinds of cost: the pool's swap fee, any hook fee on v4, the network's gas fee and price impact. Gas is paid to the blockchain, not to Uniswap, and varies by network.

The protocol fee changed in late 2025. Uniswap Labs published the UNIfication proposal on 10 November 2025, and governance executed it on 29 December 2025. Uniswap's fee documentation says protocol fees are now active on all v2 pools and selected v3 pools and take about one-sixth of the swap fee, which then funds UNI burns. The swap fee itself does not rise; the LP share falls instead:

As a worked example, a $1,000 swap through a v2 pool pays $3 in swap fees: $2.50 stays with LPs and $0.50 goes to the protocol fee, before gas and price impact. Under the same proposal, Uniswap Labs said its own fees on the interface, wallet and API would be set to zero. A governance temperature check from July 2026 says protocol fees are live on 11 chains and proposes extending them to some v4 pools; this profile does not treat v4 protocol fees as active.

Custody, access and the official app

Uniswap does not hold users' funds. Trades settle directly between a user's wallet and the pool contract, so the user keeps the keys and is responsible for them. That also means there is no account to recover and no customer balance to freeze inside the protocol.

The Uniswap Labs app does apply its own rules. A 2022 Uniswap Labs post says it blocks addresses on the OFAC sanctions list and, with TRM Labs, wallets tied to activity such as stolen funds or ransomware. The same post notes that Labs does not control access to the protocol through any portal other than its own. Searches for the Uniswap app, login or official website attract lookalike sites; there is no login, and a genuine interface never asks for a recovery phrase. Our guide to avoiding wallet scams and phishing covers the usual patterns.

Networks and Unichain

Uniswap's v4 deployment list names 20 mainnets, among them Ethereum, Unichain, OP Mainnet, Base, Arbitrum One, Polygon, Avalanche, BNB Smart Chain, Celo, Worldchain and Zora. Pools on different networks are separate: liquidity on Base does not serve a trade on Ethereum.

Unichain is a rollup built by Uniswap Labs on Optimism's Superchain. Its mainnet launched on 11 February 2025, according to Uniswap Labs. Under UNIfication, Unichain sequencer fees, after Ethereum data costs and a 15% share to Optimism, are directed into the UNI burn.

UNI, governance and ownership

UNI launched on 16 September 2020 with a genesis supply of 1 billion tokens and a 2% annual inflation rate permitted after four years. The launch post allocated 60% to community members, about 21.3% to the team and future employees, 18% to investors and 0.69% to advisors. Each address that had used Uniswap v1 or v2 before 1 September 2020 could claim 400 UNI. That was the only Uniswap airdrop described in the sources checked.

UNI holders vote on proposals through on-chain governance. UNIfication passed with about 125.3 million UNI for and 742 against, approved a retroactive burn of 100 million UNI from the treasury and moved most Uniswap Foundation staff to Uniswap Labs.

Two points about ownership and licensing are worth knowing:

• Licence. Uniswap's documentation describes the protocol as open-source and GPL-licensed, but the v4-core repository carries a Business Source License 1.1. It names Universal Navigation Inc. as licensor and converts to MIT by 15 June 2027 at the latest. Until then, production use of the code is limited to the use grants the licence points to.
• Regulatory history. Uniswap Labs says the SEC sent it a Wells notice in 2024 and, on 25 February 2025, that the SEC had closed its investigation with no action. Both accounts come from Uniswap Labs' own blog.

Risks to understand

• Smart contract risk. Core contracts are immutable and audited, and Uniswap Labs runs a bug bounty on Cantina, but audits do not guarantee safety. In v4, a pool's hook is separate code that can carry its own risks.
• Token risk. Anyone can create a pool for any token, so a pool's existence says nothing about whether the token is legitimate.
• LP risk. Providing liquidity exposes you to impermanent loss and, in v3 and v4, to positions falling out of range and earning nothing.
• Price impact and MEV. Thin pools and large trades move the price, and on-chain orders can be front-run; slippage limits set the worst price you accept.

Alternatives by function

Other decentralized exchanges differ in pool design, supported chains and fee setting. Stable-asset specialists and multi-token pools such as Balancer use different AMM formulas, and aggregators route across many venues. Our guide on how to compare DEXs sets out what to check. The DEX ratings compare protocols on published criteria, and Uniswap is scored separately in our Uniswap review; this profile describes the protocol and does not grade it.