Ethereum is one of the world’s leading blockchains. The Ethereum network processes more than one million transactions per day, and its native asset, ether (ETH), has the second-highest market cap of any cryptocurrency after Bitcoin. But most notably, it is a decentralized computing platform capable of running a wide variety of applications, including the entire DeFi ecosystem.
How Ethereum works
Ethereum is a decentralized network, like Bitcoin, but it was built to handle more than just payments. From day one, its founder Vitalik Buterin envisioned Ethereum as the platform designed to power an entire world of onchain apps.
With Ethereum as the foundation, it sets the rules, secures the network, and empowers developers to build the next generation of the internet. Here’s how it all works:
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Ethereum runs on proof of stake — a system where a network of computers called validators keep the blockchain running by confirming and recording transactions. It sets the rules for how transactions are verified and how network costs are calculated.
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Smart contracts let developers add logic to onchain transactions, no middlemen needed. Ethereum was the first blockchain to support them, unlocking the ability to build apps for lending, borrowing, swapping, and more.
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Dapps are onchain apps that run on Ethereum using smart contracts. Today, thousands of dapps let users lend, borrow, trade collectibles, and more — all without relying on a central provider.
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Ethereum has grown beyond a single chain. Developers can now build apps on “Layer 2” networks — newer networks compatible with Ethereum and designed to make transactions faster and cheaper — like Warpcast on Base or Flaunch on Unichain.
What can you do on the Ethereum network?
The Ethereum Foundation compares Ethereum to an “infinite garden,” an ecosystem with all kinds of onchain applications and use cases. Some of the things you can do on Ethereum today include:
1. Token swaps
The Ethereum network is home to decentralized exchanges (DEXs) like the Uniswap Protocol. DEXs allow users to swap digital assets directly, instead of buying and selling them with a local currency (like USD). This is an efficient, fully onchain way to trade crypto.
2. Lending, borrowing and liquidity provision
On Ethereum, several protocols allow users to lend or borrow digital assets without needing approval from a central authority. Additionally, anyone with a crypto wallet can earn fees by providing liquidity to decentralized exchanges like Uniswap Protocol, helping to support trading on the platform.
3. Collectibles
Non-fungible tokens (NFTs) were first launched on Ethereum as a way to verify ownership of creative works as diverse as art auctioned off by Sotheby’s to custom skins for video game characters. This is one of the most fun use cases for Ethereum!
4. Tokenization of real world assets (RWA)
Tokenization uses blockchain to verify ownership of an asset (such as real estate or art) and enable a more efficient storing, management and transfer of that ownership. Roughly half of the global RWA market is managed on the Ethereum network.
5. Prediction markets
Anyone can place bets on the outcomes of future, often real-world events by using onchain prediction markets. By using smart contracts, no central intermediary needs to bring together parties to resolve payment based on an event’s outcome — it’s all automated.
6. Onchain gaming
Video game developers use blockchains, sometimes in combination with traditional servers, to enhance the player experience. On top of being fun, onchain games can provide benefits like greater ownership, allowing users to truly retain in-game items — and even move those assets between games or platforms.
To explore what’s possible on Ethereum, you just need to connect your wallet to a decentralized application.
Uniswap Wallet is your passport to Ethereum and beyond
Between Ethereum’s mainnet and its diverse Layer 2 networks, you’re only a few clicks away from accessing financial services, collecting digital artwork, or even playing your next favorite onchain game.
Discover new passions and interests on Ethereum by downloading a secure, self-custody crypto wallet like Uniswap wallet.
Or connect your existing wallet and swap tokens on 13+ networks with the Uniswap web app, the world’s largest onchain marketplace.
