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Hayden Adams: Uniswap – An Automated Decentralized Exchange for Ethereum

Episode Summary

We were joined by Hayden Adams to discuss the decentralized exchange Uniswap. We covered their automated system, the economic incentives powering Uniswap and the importance of decentralized exchanges.

Episode Notes

The concept of a decentralized exchange has been a holy grail in the cryptocurrency space for many years. Many attempts have been made, but most decentralized exchanges suffered from central points of failure, poor user experience and little liquidity.

Launched during Ethereum's DevCon 2018, Uniswap is one of the first fully decentralized exchanges and managed to become the leading DEX very fast. We were joined by Uniswap Founder Hayden Adams to discuss Uniswap's unique model, the different participants in the protocol and the importance of decentralized exchanges for the blockchain space.

Topics covered in this episode:

How Hayden's exploratory project to learn smart contract development took off and became Uniswap
How Uniswap works and its different participants
The advantage of an automated exchange instead of using order books
The role of liquidity providers in Uniswap
Feedback loops that can make Uniswap markets popular or collapse
The challenging economics of liquidity shares
Addressing Arthur Hayes' criticism of decentralized exchanges
Why Uniswap didn't create a tokeneconomic monetization model

Episode links:

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This episode is hosted by Brian Fabian Crain & Sunny Aggarwal. Show notes and listening options: epicenter.tv/292