Uniswap is a decentralised trading protocol. It links hundreds of different Decentralised Finance (DeFi) applications, thereby creating a high liquidity market for trading ERC-20 tokens.
The developers describe the technology as an ‘automated liquidity protocol’. In practice, this means that Uniswap allows users to swap crypto tokens simply through the power of smart contracts, and without the need of an order book, central arbiter or authority,
Uniswap is, therefore, different from traditional exchanges and eliminates liquidity problems. Every order is fulfilled, because there’s a pool of coins available for purchase at an algorithmically-set price.
Nevertheless, Uniswap tokens can still be purchased through traditional, established crypto exchanges. You can invest in Uniswap without necessarily knowing much about how it works.