Uniswap which allows users to buy NFT with ERC-20 tokens
Uniswap, the largest decentralized exchange operating on the Ethereum blockchain, announced on February 23, 2023 that the platform has begun allowing investors to purchase Non-Fungible Tokens (NFTs) using ERC-20 tokens.
The Uniswap protocol took this step to strengthen its growing NFT business following the acquisition of Genie. Also, the trading market for NFTs is heating up with new entrants such as Blur.
According to Uniswap, there are two main challenges right now:
- “Not everyone has enough ETH in their wallet. Trading an ERC20 to W/ETH solely to buy an NFT is an avoidable step.’
- “Pricing out the ETH needed to buy an NFT and pay for gas can be inaccurate, leaving a dust of ETH behind.”
According to the Uniswap team, the platform plans to enable users to buy NFTs with just one ERC-20 token and eventually also buy NFTs using other ERC-20 tokens.
As reported, this feature will allow investors to avoid converting their ERC-20 tokens to ETH as well as WETH for the sole purpose of buying NFTs, thus rendering this step useless and helping users save on gas fees.
According to Uniswap’s official website, this feature is made possible by their new Universal Router contract, which integrates token and NFT trading into a flexible and gas-optimized swap router for the first time. Universal Router finds the most profitable way for investors to trade, by entering ERC-20 tokens to buy tokens, such as ETH, and then settle the trade through Opensea’s protocol.
Uniswap DEX announced on June 21 last year that it had acquired Genie for an undisclosed sum. Genie, founded in 2021, allows users to buy NFTs from multiple marketplaces in a single purchase. This acquisition comes less than 2 months after NFT marketplace OpenSea acquired Gem, a competitor to Genie.
Uniswap reportedly reported in November 2022 that they had allowed trading of NFTs on the platform and that they were turning Genie into their NFT aggregator.
Despite this, the Uniswap NFT aggregator has seen a rapid drop in trading volume and number of transactions. As reported, the trading volume of the platform fell from around $246,000 to around $20,000. At the same time, the number of transactions decreased from 446 to just 36.
The NFT market has become more competitive, reports suggest. Blur, the latest entrant, has taken the market by storm thanks to its overall token promotion master plan. Reportedly, it now has 82% trading volume within just one week.
By joining ERC-20s and NFTs, Uniswap expects to see more innovative intersections between ERC-20 tokens and NFTs in the near future.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while graduating. A keen observer of detail, he shares his passion for writing alongside being a developer. His backend knowledge of blockchain helps him bring a unique perspective to his writing
