The crypto world has known the existence of centralized exchanges for a long time. They have been able to see massive trading volume, high liquidity, as well as quick transaction times. Not minding how good they may be, they had some issues. One was the issue of having to entrust your crypto to them before an exchange could be done. Crypto users were scared of this, as there was the risk of losing one's crypto during a security breach. This birthed the need for decentralized exchanges, where custodians were not needed.
As a result of some limitations, creating decentralized exchanges has not been an easy feat.
One decentralized exchange that seems to have succeeded is the Uniswap. It is a pioneer in the field, and UniLend took a leaf from the tree and improved it. We will be looking at both protocols and make the differences easy to spot.
Uniswap
This is a decentralized exchange protocol that was created on the Ethereum ecosystem, and it acts as an automated liquidity protocol. Here, users can effortlessly sell, buy, and trade their cryptos without having to worry about custodians or intermediaries.
The issue of censorship is taken care of with the high level of decentralization that this system offers.
Uniswap doesn't have an order book, instead, it uses a model that uses liquidity providers that create liquidity pools. With this system, the need for an order book is not there. ERC-20 token holders can easily swap their tokens without worrying about an order book.
The fact that the Uniswap protocol is decentralized means that a listing process doesn't exist. It is typical for traditional exchanges to list out a lot of rules that an asset has to follow before it can be listed. This is not the case here. Any ERC-20 token can be listed once it has a liquidity pool that traders can use. What this means is that one does not have to worry about paying listing fees.
UniLend
Uniswap is the forerunner that UniLend took a leaf from its book. This means that UniLend offers everything that Uniswap offers at the moment and has incorporated more. Uniswap only acts as a DEX that removes the need for an intermediary before an exchange can occur.
Unilend does the aforementioned, and gives their users features that allow them to earn interests. Instead of ERC20 tokens merely being in one's wallet, UniLend allows holders to lend them out for a fee. Borrowers can also have access to the tokens and pay an interest in return.
The CyberFi integration makes the automated borrowing and lending possible.
Users can easily lend and borrow staked assets. This is made possible via the StaFi protocol. As for those that want to borrow and lend real world assets, this is possible because of the existence of OpenDeFi. Real life assets will be tokenized.
UniLend is not solely focusing on offering lending and borrowing functionalities, it also allows users to benefit from the spot trading feature.