What is Uniswap? How to avoid scams when trading on decentralized exchanges

Uniswap is a decentralized exchange protocol operating on Ethereum, facilitating token exchanges without the typical transaction fees associated with centralized platforms. Unlike conventional exchanges, Uniswap operates for community benefit, providing a fee-free environment for users to trade tokens directly without platform fees or intermediaries.

Any token can be listed on Uniswap by providing liquidity in the form of ETH and the ERC20 token being traded. Now, let’s discuss the safety of trading on Uniswap and explore its advantages and disadvantages.

Safety Concerns on Uniswap:
Trading on Uniswap is generally considered safe due to its decentralized nature. However, users should exercise caution and conduct thorough research, as decentralized platforms are not immune to risks such as smart contract vulnerabilities and potential token scams.

How to Avoid Scams on Uniswap? Listing tokens on Uniswap is a straightforward process. Simply deposit ETH to create a liquidity pool and deploy the ERC20 token code on the platform. Consequently, listing on Uniswap is easy, making it challenging to prevent scams.

When engaging in transactions on decentralized exchanges, it’s crucial to pay attention to the following two issues:

  1. Thoroughly Check the Asset ID of the Project: Verify the Asset ID of the project to ensure its legitimacy.
  2. Inspect the Project’s Contract: Examine the project’s contract by either reviewing the contract provided by the development team or checking on platforms like Coingecko for additional validation.

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Uniswap is now holding the position of the largest decentralized exchange (DEX) in the cryptocurrency industry.

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Typically, scam coins are listed on decentralized exchanges such as UniSwap or PancakeSwap – platforms that operate automatically without a specific company behind them.

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