How does Uniswap liquidity work?

Uniswap is open-source software licensed under the GPL. Each Uniswap smart contract, or pair, manages a liquidity pool made up of reserves of two ERC-20 tokens. Anyone can become a liquidity provider (LP) for a pool by depositing an equivalent value of each underlying token in return for pool tokens .

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Can you make money with Uniswap pool?

Uniswap makes money via protocol fees that can be optionally turned on by UNI governance . On top of that, it generates income through the issuance of its own UNI token. Founded in 2017, Uniswap has grown to become one of the world’s leading cryptocurrency exchanges. It has raised $11 million throughout its existence.

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