Hayden Adams, founder of the new decentralized exchange Uniswap, discusses how Uniswap differs from a traditional exchange based on order books, how market the contract determines the price of the tokens, and how market making on Uniswap is similar, in terms of payment, to participating in a mining pool. He covers under which conditions it is that a market maker will earn profit, what fees go toward in Uniswap, and how the contract functions as the dollar values of each token in a liquidity pair fluctuate. He describes how Uniswap quickly became one of the biggest decentralized exchanges on Ethereum since its launch in November, why gas fees are lower on Uniswap than other dexes, and how new tokens get listed on Uniswap. Plus, he talks about what regulatory risk he faces, how he plans to make money off the dex, and what he thinks of the idea that Dan Elitzer described in last week's Unconfirmed — people using the Uniswap liquidity pair tokens as collateral for loans. Thank you to our sponsor! CipherTrace: http://ciphertrace.com/unconfirmed Episode links: Uniswap: https://uniswap.io Uniswap on Twitter: https://twitter.com/UniswapExchange Hayden: https://twitter.com/haydenzadams Explanations of Uniswap: High level overview by Cyrus Younessi of Scalar Capital: https://medium.com/scalar-capital/uniswap-a-unique-exchange-f4ef44f807bf Another by Ross Bulat:  https://medium.com/@rossbulat/uniswap-understanding-the-decentralised-ethereum-exchange-5ee5d7878996 Analysis of Uniswap on Token Daily: https://www.tokendaily.co/blog/pnl-analysis-of-uniswap-market-making The posts by Vitalik Buterin that Hayden used to create Uniswap: On Reddit: https://www.reddit.com/r/ethereum/comments/55m04x/lets_run_onchain_decentralized_exchanges_the_way/ The comment by Vitalik near the top of this blog post about Bancor: http://hackingdistributed.com/2017/06/19/bancor-is-flawed/ Blog post by Vitalik: https://vitalik.ca/general/2017/06/22/marketmakers.html Unconfirmed episode with Dan Elitzer on superfluid collateral and Uniswap liquidity pair tokens being used as collateral: https://unchainedpodcast.com/how-to-earn-money-on-collateral-in-defi-and-why-thats-risky/