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How Does Uniswap Make Money (Business and Revenue Model)

The Uniswap business model

Uniswap logo
Here’s what you should know:
  • What is Uniswap, and how does Uniswap work?
  • How does Uniswap make money?
  • Protocol Fees
  • Reserved Team Tokens from UNI (Uniswap’s governance token)
  • Uniswap subsidiaries, acquisitions, and exits
  • Uniswap profit and revenue
  • What is the Uniswap business and revenue model?
  • Uniswap funding, net worth, and valuation

How does Uniswap make money and how is it free to use? Well, here is a full, in depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Uniswap business and revenue model, how much Uniswap makes per year, and how Uniswap works.

What is Uniswap, and how does Uniswap work?

Uniswap is a cryptocurrency exchange that uses a decentralized network protocol.

Founded in 2018 by Hayden Adams, Uniswap has since handled more than $1 trillion of transactional volume on its decentralized exchange (DEX) since its launch back in 2018.

So, how does Uniswap work? To trade cryptocurrencies on Uniswap, you can simply go to app.uniswap.org and connect your crypto wallet.

Once you connect and approve your wallet to be used with Uniswap’s site, you can search for or import the token you’re looking to buy or sell. Then, tap “Swap” on Uniswap and then “Confirm” on your wallet once it pops up for you to review the transaction. Just make sure you have enough ETH for gas fees (or whatever network you’re swapping on).

Some of Uniswap’s competitors include Coinbase, Crypto.comBinanceFTX, and other cryptocurrency exchanges.

How does Uniswap make money?

According to data, it has been reported that Uniswap’s decentralized exchange (DEX) has now facilitated more than $1 trillion of transactional volume since its launch back in 2018.

So how does Uniswap make money off of all those customers and sent emails?

Below is a breakdown of how much money Uniswap makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how Uniswap makes money in 2022

Uniswap has a revenue model that makes money in two (2) ways; from protocol fees and reserved team tokens from UNI (Uniswap’s governance token).

#1. Protocol Fees

Uniswap has the option to make money from its protocol fees that can be collected by UNI governance.

In Uniswap v3, they introduce multiple pools for each token pair, each with a different swapping fee. “Liquidity providers may initially create pools at three fee levels; 0.05%, 0.30%, and 1%,” according to Uniswap.

From that, a percentage can be sent to an address specified by UNI governance as a protocol fee by calling the collectProtocol function, if Uniswap chooses to turn it on.

As noted above, Uniswap’s DEX platform has handled more than $1 trillion of transactional volume since its launch back in 2018. Oh which, Uniswap can take a percentage of each transaction, if they decide to do so.

Uniswap app | Uniswap Business Model | How Does Uniswap Make Money | How Does Uniswap Work
Source: Uniswap

#2. Reserved Team Tokens from UNI (Uniswap’s governance token)

Uniswap also makes money from the UNI tokens they set aside for the Uniswap team.

According to Uniswap, they allocated 21.266% of the total UNI tokens for Uniswap team members and future employees with 4-year vesting. Which you can see in the pie chart in the image below.

There are 1,000,000,000 UNI tokens in circulation, 21.266% of which are reserved for the Uniswap team. If we do the math, 21.266% = 212,660,000 tokens. Which has a USD value of $1,489,389,254.93 USD ($1.48 billion USD) when trading at $7 per coin.

Uniswap UNI token allocation chart | Uniswap Business Model | How Does Uniswap Make Money | How Does Uniswap Work
Source: Uniswap

Uniswap subsidiaries, acquisitions, and exits

To date, Uniswap has made a total of 1 acquisition and 1 investment.

Mergers and acquisitions business model
Source: Crunchbase | Uniswap

Uniswap profit and revenue

In 2021, it’s reported that Uniswap generated $1+ billion USD in revenue.

Note: Because Uniswap is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Uniswap business and revenue model?

Uniswap makes money through a few revenue models that they combine within their company, they are:

  • Fee for service (FFS) business model
  • Mergers and acquisitions (M&A) business model

Uniswap funding, net worth, and valuation

Uniswap’s Crunchbase profile shows Uniswap has not raised any funds.