Uniswap is an exchange without an order book. A Uniswap pair has two assets in quantities X and Y, and a constant k such that X*Y=k. If you give some X to the c

Uniswap is an exchange without an order book. A Uniswap pair has two assets in quantities X and Y, and a constant k such that X*Y=k. If you give some X to the contract, then it will give you back enough Y so that k is still constant. Effectively the ratio between the two assets' quantities is equal to their relative prices. By giving the contract both X and Y, you're providing liquidity. You get a new token Z, specific to that pair. Every exchange of X for Y (or vice versa) skims off a transaction fee, which is apportioned among holders of Z. (This actually describes the first version of Uniswap. The new version 3 has more complex math that lets you do fancier stuff, but is the same basic idea.)