What is UniSwap (UNI) and How Does it Work?

Uniswap (UNI) is a decentralized exchange (DEX) built on the Ethereum blockchain. It allows users to trade Ethereum-based tokens without needing a centralized intermediary. Uniswap uses a special liquidity provision, and a trading mechanism called an "automated market maker" (AMM). Instead of using order books to match buyers and sellers, as centralized exchanges do, Uniswap uses a mathematical algorithm to set the prices of tokens based on supply and demand. When a user wants to trade a token, they provide…