Overview: Uniswap is one of the most popular decentralized exchanges (DEX) on the Ethereum network, allowing users to trade ERC-20 tokens directly from their wallets without the need for a centralized intermediary. Its automated market maker (AMM) model has revolutionized trading by enabling users to provide liquidity and earn fees.

Key Features:

• Concentrated Liquidity: With the launch of Uniswap v3, liquidity providers can now concentrate their capital within specific price ranges, leading to improved capital efficiency and higher returns on investment.

• Flexible Fee Tiers: Uniswap v3 offers different fee tiers for liquidity providers, allowing them to choose the appropriate fee structure based on their risk tolerance and expected volatility of the token pairs.

• Layer 2 Integration: Uniswap has integrated with Layer 2 solutions like Optimism and Arbitrum, significantly reducing transaction costs and improving trading speeds for users.

Impact: Uniswap remains a cornerstone of the DeFi ecosystem, facilitating billions of dollars in daily trading volume. Its innovative features have set a standard for decentralized exchanges and have encouraged other platforms to adopt similar models.