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Uniswap is a family of decentralized trading protocols, and UNI is the governance token associated with them. The protocols let people exchange tokens through smart contracts and pooled liquidity. UNI is not the gas currency of every network where Uniswap operates, and a user generally does not need UNI simply to make a swap.
That separation is central to understanding the project. A trading protocol, a software company, a wallet, a liquidity position and a governance token can share the Uniswap name while giving their users very different rights and exposures.
From an Ethereum experiment to several protocol versions
Hayden Adams created Uniswap in 2018 and later founded Uniswap Labs. Uniswap first appeared on Ethereum, with version one going live in November 2018. Instead of matching a buyer's order with a seller's order, its contracts let traders exchange tokens against reserves supplied by liquidity providers.
Uniswap Labs develops products including an interface and wallet, as well as protocol technology. Those products provide access to contracts but are not identical to the contracts themselves. A particular interface can change its routing, access rules or supported assets while an existing onchain pool continues to exist.
The UNI token arrived in September 2020. Its governance system gives holders and delegates a role in decisions such as treasury spending and specified protocol-fee settings. Governance is therefore consequential, but its powers are defined by contracts and proposals. It does not give every holder a general ownership claim over Uniswap Labs.
How liquidity pools make a market
A liquidity pool holds assets that traders can exchange under programmed rules. A swap changes the composition of those reserves, which changes the price available for the next trade. A larger trade relative to available liquidity usually moves the execution price more substantially.
Uniswap v2 uses the constant-product model often summarized as x times y equals k. That model is a useful introduction, but describing every later Uniswap pool with that equation alone misses important differences. The relevant question for a trader is how much usable liquidity exists along the entire proposed route.
Concentrated liquidity arrived with version 3 in May 2021: providers pick the price ranges where their capital works, instead of spreading it across every possible price. Capital can be more useful near the market price, but a position outside its range stops earning swap fees until conditions change. Providing liquidity is therefore an active exposure to how prices move, even when the deposit is left untouched.
Version 4 launched on January 31, 2025. It introduces hooks, which are contracts that let developers customize what happens around swaps, liquidity changes and similar actions. It also groups pools within a singleton architecture to reduce unnecessary transfers and accounting costs. The ability to customize pools expands their design space and the need to understand each pool's specific code.
Our guide to decentralized exchanges explains slippage, liquidity pools and order-book alternatives in more detail. A recognizable protocol name alone does not establish the quality of a particular market.
Networks, execution speed and the fees users pay
Uniswap does not operate one universal consensus system for all its pools. Each deployment relies on its host network. On Ethereum, execution and settlement depend on Ethereum; on a layer 2, sequencer behavior, data publication and the network's settlement design add further considerations. Confirmation time therefore varies by route and chain.
Unichain is a separate Ethereum layer-2 network developed for decentralized finance. Its public mainnet launch was announced on February 11, 2025. It is part of the broader Uniswap ecosystem, but using a Uniswap pool on another chain does not mean the transaction travels through Unichain.
A swap can involve several costs: the pool's swap fee, network gas, price impact and any additional charge imposed by an interface or route. These should be checked separately. A route described as gas-free can have a third party pay the transaction cost and reflect that expense in the quoted output. A zero line item does not establish zero economic cost.
Layer-2 transactions also introduce different confirmation stages. A fast sequencer response is not the same event as final settlement on the underlying network. The layer-2 guide explains those dependencies and bridge withdrawals.
What UNI governs, and what changed with protocol fees
UNI holders can delegate voting power and participate in governance. Delegation lets another address vote with that power without transferring the underlying tokens. Proposal thresholds, voting periods and execution delays make governance a process rather than an instant poll.
A major change was the UNIfication proposal. The official governance record marks proposal 93 as executed on December 29, 2025. Its actions included transferring 100 million treasury UNI to a burn address, enabling the v2 protocol fee on Ethereum mainnet and placing the v3 factory under a configured fee controller.
The original rollout described fees for v2 and selected v3 pools, with other versions and networks requiring their own implementation steps. It would be inaccurate to turn that into a claim that every Uniswap swap everywhere pays the same protocol charge.
The fee system uses contracts called TokenJar and releasers. Fees collect in a TokenJar; a releaser can allow a caller to obtain those accumulated assets in exchange for burning a required amount of UNI. The current documentation describes the release as a user-triggered transaction. This links specified fee flows to UNI removal, but it is not a cash dividend automatically paid into each holder's wallet.
UNI supply is more complicated than a one-billion cap
At genesis, one billion UNI were minted. Of that initial supply, 60% went to the community, and the rest was split among the team, investors and advisors, subject to the original vesting schedules. Those historical allocation percentages describe the launch plan, not the ownership distribution today.
The token was designed with minting capacity after the initial four-year period. Its published contract limits each mint to 2% of total supply and imposes at least 365 days between mints. An authorized minting action is required; the contract does not independently print a fixed annual installment merely because a year has elapsed.
UNI should consequently not be described as having an immutable one-billion maximum. Nor does the existence of burn activity prove that effective supply must fall in every future period. Minting permissions, treasury transfers, tokens sent to inaccessible addresses and market-data definitions all affect how supply figures should be interpreted.
The executed treasury burn is especially easy to misread. Proposal 93 specifies a transfer to a burn address. That removes spendable treasury tokens, but a transfer to such an address does not necessarily reduce the ERC-20 contract's reported totalSupply value. Circulating, spendable and contract-reported supply are distinct measures.
Current development and the risks that remain
Uniswap remains active as of October 18, 2026. Its development includes new v4 pool designs rather than only new versions of the original exchange. On October 14, 2026, Uniswap Labs announced that its VolatilePair Hook was live on Ethereum mainnet, initially for ETH/USDC, with fees recalculated according to recent price movements.
The announcement illustrates both the opportunity and the qualification around hooks: a pool can use specialized fee logic, and that logic can have its own upgrade arrangements. Users should examine the particular hook rather than assume every pool inherits an identical risk profile from the core protocol.
Liquidity providers can lose money relative to holding the assets directly. Fees may not cover adverse price movements, arbitrage losses, gas or an asset's collapse. Swappers face thin liquidity, sandwich attacks, malicious token contracts and misleading token symbols. Checking the chain and contract address is more useful than relying on a familiar ticker.
Wallet approvals and signatures create another exposure. A malicious approval can authorize spending even when the user thinks they are only preparing a swap. The wallet and recovery guide explains the difference between controlling keys and evaluating the contracts those keys authorize.
UNI holders face a separate set of uncertainties: delegate concentration, treasury spending, future issuance decisions, implementation risk and competition for trading liquidity. A growing trading ecosystem can increase protocol activity without giving token holders a fixed claim on its economic results. Understanding the actual governance and fee contracts is the starting point for understanding UNI.