Uniswap is an Ethereum based exchange that allows anyone to swap ERC20 tokens.

Uniswap V2 launched in May 2020, enabling direct ERC20 to ERC20 swaps and adding a host of technical improvements.

In September 2020, Uniswap launched its UNI governance token with an airdrop to anyone who had used the protocol before September 1.

Decentralized exchanges solve many of the problems of their centralized counterparts, including the risk of hacking, mismanagement, and arbitrary fees. However, decentralized exchanges have their own problems, mainly lack of liquidity—which means a lack of amount of money sloshing around an exchange that makes trading faster and more efficient.

That's where Uniswap comes in. It's trying to solve decentralized exchanges' liquidity problem, by allowing the exchange to swap tokens without relying on buyers and sellers creating that liquidity. 

Below we explore how Uniswap works and how it became one of the most popular decentralized exchanges on Ethereum.