What is the UNI token and how does it work?
The UNI token is the native token of the Uniswap protocol.
It was launched in September 2020 and is an ERC-20 token built on the Ethereum blockchain. The UNI token serves as a governance token for the Uniswap protocol, allowing holders to vote on changes to the protocol and receive rewards for providing liquidity. The UNI token has two main functions: governance and rewards.
Governance: The UNI token allows holders to vote on changes to the Uniswap protocol, such as new features, fee structures, and other modifications. This allows users to have a say in how the protocol evolves over time. Rewards: The UNI token also provides rewards for users who provide liquidity to Uniswap pools.
These rewards are distributed in proportion to the amount of liquidity provided by each user, and can be used to offset trading fees or withdrawn from Uniswap. In addition, UNI tokens can be used as a medium of exchange on Uniswap, allowing users to trade directly with each other without having to go through an exchange or third-party service. This makes it easier for users to access different types of assets without having to worry about counterparty risk or high fees associated with traditional exchanges.
