Most cryptocurrency transactions and operations take place on centralized platforms controlled by centralized authorities.
However, amid the race to decentralize the sector fully, a shift from centralized platforms in the crypto world is heating up. UniSwap is one decentralized exchange (DEX) challenging the dominance of centralized exchanges.
Built on the Ethereum blockchain, UniSwap enables permissionless transactions without the need for any intermediary. Therefore, users enjoy complete control of their funds and the operations they wish to undertake on the platform.
Why Buy UNI DEX Token
Uniswap (UNI) is the native token that powers the decentralized exchange. It also acts as a medium for settling transaction fees on the network. The DEX coin plays a primary role in maintaining the DEX software and is used by owners to maintain and operate the network.
Staking the native token is also possible, allowing holders to generate some passive income by offering liquidity and helping secure the network.
Additionally, it doubles up as a governance token, offering holders the right to vote on the development of the UniSwap exchange.
Each vote a person makes to approve or reject a given upgrade proposal is proportional to the amount of UNI tokens held. Transaction fees generated through the platform’s UNI token help finance the exchange’s development.
While UniSwap is a decentralized exchange operating without any middlemen, its native token, UNI, can be bought and sold in centralized exchanges, among other platforms.
What to Consider Before Buying UNI
There are several ways to buy UNI tokens. However, there are several things that one should take into consideration before purchasing the DEX native token.
Where to Buy UNI Token
Exploring all the available options for buying the native decentralized exchange token is vital. Centralized cryptocurrency exchanges are some of the most popular platforms for purchasing cryptocurrencies.
Therefore, it is essential to scrutinize the cryptocurrency exchanges that offer support for the UNI token to settle on one that provides the best deal on price and charges.
While selecting a crypto exchange for buying Uniswap native tokens, security is of utmost importance. If a cryptocurrency exchange is insecure, there is always a high risk of losing funds or holdings. It is also essential to settle on a broker within the country you operate from and regulate.
While using other exchanges, the best are those controlled by some of the biggest and most reputable regulatory bodies.
How liquid the exchange is will significantly affect your ability to quickly buy and sell the Uniswap token.
Additionally, crypto exchanges that offer locking pricing are some of the best. Finally, given that cryptocurrencies can be highly volatile, a crypto exchange should guarantee the price at the time of the transaction, even if it does not settle.
Finally, it is good practice to compare all the fees an exchange charges with the rest of the market. In this case, check or deposit and withdrawal fees and the fees for buying the token.
In addition to buying, it is crucial to have a place to store the tokens once bought. Cryptocurrency wallets offer safe storage instead of leaving the digital coins in a cryptocurrency exchange. However, it is essential to know that crypto exchanges don’t technically store the coins; instead, they hold private keys for accessing the coins.
Crypto wallets are classified into two based on how they store the private keys.
- Hot Wallets: Commonly referred to as online wallets, they operate on internet-powered devices such as computers, phones, and tablets. The wallets generate the private keys for the coins on internet-powered machines. One of the downsides to online wallets is that a user is usually not the private key holder. Instead, the exchange offers custody to the accounts that store the private keys. Whenever crypto exchanges provide custody services for digital coins, there is always the risk of losing everything in case of a security breach. Nevertheless, hot wallets stand out as the best for small amounts of cryptocurrencies or actively traded exchanges.
- Cold wallets are some of the best wallets for storing UNI and other tokens partly because they are not connected to the internet, thus at less risk of coming under attack. Offline wallets store users’ private keys on devices not connected to the internet. Additionally, they offer software that allows users to view the token holdings without putting the private keys at risk. Paper wallets are a perfect example of cold wallets whereby certain websites print the private keys on paper that people can laminate and store in safe deposit boxes beyond hackers’ reach.
Buy Uniswap Tokens in an Exchange: Step-by-step Guide
Open a Cryptocurrency Exchange Account
Arguably the easiest and best way to buy Uniswap tokens is through a centralized exchange. Operating as a cryptocurrency broker, most offer a trading platform where you can submit buy orders for whatever amount of UNI token you want to buy.
Opening an account with a reputable exchange is the first step to buying the Uniswap token. The account opening process is as simple as entering your details and sharing documents that show proof of residence as part of the approval process.
Add Payment Method
Once you have opened an account with a reputable and reliable crypto exchange, the next step is opening a payment option for depositing money into the account. Most cryptocurrency exchanges accept deposits from wire transfers, debit cards, and sometimes credit cards.
Other crypto exchanges accept electronic payments, such as PayPal.
Once you settle on a payment option, you must deposit some money into the cryptocurrency exchange account. The amount is to be used to purchase whatever amount of UNI tokens.
Set Up a Cryptocurrency Wallet
However, setting up a cryptocurrency wallet account is essential before initiating the purchase process. The wallet is to offer custodial services to private keys to the tokens bought. Leaving tokens in centralized exchanges only increases the risk of losing them, as most of them are usually targets of hackers.
In 2019, Binance suffered a significant security break that resulted in the loss of $40 million worth of Bitcoin.
The best way to protect your investments in UNI tokens is to store them in a private wallet. While online wallets offer storage services, hardware wallets are some of the best as they are not connected to the internet and are thus beyond hackers’ reach.
Make a Purchase
Once a deposit goes through and a wallet is in place, you can move forth and purchase the UNI token. Of course, you can always decide the amount of UNI tokens you need depending on the amount in the account.
The next step entails making a buy order on the trading platform offered by the exchange once you make an order wait for the broker to fill it according to the specifications.
Transfer Private keys to Crypto Wallets
Once the broker fills the order, and you are sure of the amount of UNI tokens bought, you can always navigate the website to transfer the tokens’ private keys to a preferred wallet. This way, you can protect the cryptocurrency holdings from hackers’ reach.
Buy Uniswap with Debit and Credit Cards
In addition to buying the UniSwap token through crypto exchanges, it is also possible to purchase the cryptocurrency through debit and credit cards. While the process is simple, you must select the platform that offers services for buying the token.
While selecting a platform, caution is of utmost importance while paying more attention to transaction fees. In addition, the platform should make it easy to store the bought UNI tokens in a preferred storage facility.
While buying a UNI token with a debit and credit card is possible, it might cost more in transaction fees. In addition to broker fees, you may incur foreign transaction fees for each purchase. The cost could be anywhere between 1% and 3%.
Currently, it is not possible to buy UNI tokens via cryptocurrency ATMs. The only ATMs available support the purchase of flagship Bitcoin. The machines also charge considerably more in transaction fees compared to other methods of buying digital currencies.
Should I Invest in UniSwap?
Uniswap (UNI) is a popular cryptocurrency partly because it powers one of the biggest decentralized exchanges offering peer-to-peer trading. In addition, being a disruptive crypto exchanger, it complies with Decentralized Finance (DeFi) standards, an edge that underscores the native coin’s long-term prospects.
Increased focus on decentralized exchanges at the expense of centralized exchanges controlled by intermediaries continues to strengthen UNI’s long-term prospects. Similarly, an influx of many financial institutions into the DeFi space affirms opportunities for growth in the burgeoning sector.
As more people and institutions look to move away from centralized exchanges, Uniswap is one of the decentralized exchanges well positioned to benefit as the fourth-largest DEX in traded volume.
Likewise, an influx of retail traders and institutions into the DeFi space should increase demand for DeFi tokens such as UNI. While the cryptocurrency sector has been under pressure recently, long-term prospects remain intact.
The future is bright for cryptocurrencies tied to decentralized exchanges, given the transition from centralized exchanges. Uniswap (UNI) is one of the tokens well positioned to benefit from the crypto boom and the DeFi movement.
The token represents the future of cryptocurrency exchanges, backed by one of the biggest decentralized exchanges.
Nevertheless, it is essential to understand the risks involved in purchasing highly volatile assets such as cryptocurrencies. Moreover, the risk of regulators cracking down on DeFi and cryptocurrencies could also affect Uniswap’s long-term prospects.