UniSwap is a decentralized exchange which allows anyone to trade cryptocurrencies directly from their wallet.
Liquidity providers lock a 50/50 ratio of the pair being traded into a smart contract, and buyers/sellers trade on this pair. The liquidity providers are paid a a liquidity fee on every trade.
This page gives a better overview
I have two questions:
- is it permissible to buy/sell on uniswap as we pay a liquidity fee?
- is it permissible to become a liquidity provider and earn passive income via the liquidity fee?