Many people use Uniswap and Binance to trade different types of tokens everyday. But, which of these two exchanges is cheaper? Let’s find that out below.
Is Uniswap Cheaper Than Binance?
Uniswap is cheaper than Binance only if trade in high volumes or specific coins.
Binance is a major centralized exchange (CEX) with its native Binance Coin (BNB) token. You can trade leading crypto on Binance, including Bitcoin, Litecoin, Ethereum, BNB, and hundreds of other industry tokens.
Binance puts its starting fees at 0.10%.
On the other hand, Uniswap is a top decentralized exchange (DEX) platform built on the Ethereum network with UNI as its native token. Its primary use is to provide a platform for users to trade digital assets without intermediaries.
For Uniswap, the rates start from 0.01% up to 1%. Today, according to the volume you trade, you will fall in any of the four fee groups: 0.01%, 0.05%, 0.3%, and 1%.
The higher the volume traded, the lower the fees you pay. Moreover, fees on Uniswap depend on what you trade. Stablecoins have lower fees than altcoins.
What Is Uniswap?
Uniswap is a decentralized cryptocurrency exchange with the native token UNI that runs an automated market maker (AMM) on the Ethereum network.
Uniswap allows users to swap ERC20 coins, trade them, or use the natvie UNI token to participate in the governance of its network.
Unlike centralized exchanges, Uniswap has no single authority and allows for exchange on all the ERC-20 tokens.
When To Use Binance?
Here are some reasons you may prefer to use Binance
- If you’re looking to trade BEP-20 tokens.
- When you’re looking for a CEX.
- If you want a crypto exchange with lower fees.
- You want to trade coins across different chains
When To Use Uniswap?
- When you’re seeking anonymity.
- If you want access to trading or swapping ERC-20 tokens.
- When you want an easy-to-use decentralized exchange that allows you to control your digital assets and wallets.
- When you want a faster and easier method to trade your crypto.
- If you want to earn money while providing liquidity.
How Expensive Is Uniswap?
Uniswap isn’t pocket-friendly for average crypto users. You may burn through hundreds of dollars to exchange a token on the platform and fees may fluctuate for various reasons we’ll discuss below.
The standard user fee on Uniswap is 0.3% but with many have other bundled fees associated with Ethereum.
Why Is Uniswap So Expensive?
Uniswap is seemingly expensive for these reasons.
A broad category of fees
Although Uniswap is a great solution, it gets expensive daily because of the fees involved. While the fee on exchange is only 0.3%, gas fees may change depending on Ethereum network traffic.
Also, traders must pay any extra fees to compensate for the slippage during transactions.
Significant liquidity is needed to keep the Uniswap network alive. Investors who provide liquidity earn interest from this service. To incentivize them, these fees pay them as rewards, and they come as a cost to the user.
High Ethereum gas fees
In general, Ethereum has the highest fees of any blockchain. Running on the Ethereum network, Uniswap carries this flaw as well.
Why Is Uniswap Popular?
Uniswap’s popularity is high for multiple reasons. Let’s look at top four reasons:
Uniswap offers a robust decentralized exchange that provides full anonymity to all its users.
Whether a new or experienced investor in the crypto markets, you can use Uniswap without having to creating a user account or leave your personal information.
You only need ETH and a MetaMask wallet, and you can swap or pool your ERC-20 tokens.
Most investors use Uniswap to make passive income by providing liqudity.
You can continuously provide liquidity to the Uniswap network and receive rewards when users trade and swap tokens within the platform.
Uniswap ia a more secure platform. You can freely trade from your crypto wallet. You maintain complete control over your digital assets and security keys.
You can swap all ERC-20 tokens on Uniswap without having to leave the Ethereum ecosystem.
Learn more about Uniswap’s ERC-20 compatibility in our guide.
Do You Need ETH For Uniswap?
Yes. You need ETH for Uniswap.
ETH is the primary token used to fuel any transaction occurring on Uniswap. However, if you already own another ERC-20 token, you can use it instead.
If you hold a token that isn’t ERC-20 compatible, changing it to ETH is the only way to fund your activity on Uniswap.
For instance, if you’re new or hold other token standards but want to participate as a liquidity provider, you must first exchange your BEP-20 token to ETH on exchanges that accept such swaps. After that, convert your ETH to UNI on Uniswap and proceed to provide liquidity on the network.
How To Avoid Fees At Uniswap?
Any avid crypto user will worry about the cost of gas on any transaction, and Uniswap isn’t an exception. Here are ways to avoid paying fees or reduce the cost of transacting on Uniswap DEX.
Using Wrapped ETH
Using wrapped Ether (WETH) is an easy-to-use method if you want to avoiding high fees on Uniswap. When you convert your ETH to wETH, it helps you cut costs for every transaction you do.
For example, swapping directly with ETH will cost you more if you want to purchase SOL. However, if you use wETH, you might save a few dollars on the transaction.
Using Other Exchanges
Scouting rates on other crypto exchanges are another great way to save on fees. A great example is Quickswap which uses Polygon MATIC as the primary token to pay fees on the exchange. While Uniswap charges upwards of $30, you will find it less when using MATIC.
You can save on fees by making a few changes to your MetaMask wallet. Follow below for the below steps:
- Open your MetaMask account.
- Go to the settings.
- Scroll to ‘Advanced.’
- Activate the Advanced gas controls.
Waiting for low prices
Most times, fees are high when there’s heavy traffic on the Ethereum blockchain. So, you can wait for a period when the traffic is less so you can spend fewer fees.
Uniswap is cheaper than Binance, but it can be expensive to swap tokens of a lower value on their network.