Prepare to Buy NFTs on Uniswap Using any ERC20 Token

Subh Rath

February 24, 2023

NFTs are becoming a popular and widely used digital asset investing alternative. Additionally, with the debut of Uniswap, a prominent decentralized exchange, in 2018, it has made NFT trading easier and more convenient by bringing new upgrades and features. Since the introduction of NFTs on Uniswap, the platform has been aiming to offer a more unified experience across NFTs and ERC-20s.

With the formal debut of this experience on February 22, the platform now allows buyers to acquire NFTs on Uniswap with any ERC20 token while sellers continue to earn their listing token. According to the Uniswaps update statement, by putting ERC20s and NFTs closer together, the platform is exploring the possibilities of digital ownership and exchange. Yet, this is not a wholly novel or untested technique, as projects such as Treasure DAO have already explored these restrictions for only pricing their assets in MAGIC.

What is the Uniswap Universal Router Contract?

If you’ve ever purchased NFTs, you’re probably familiar with the difficulties that come with them because NFTs are often priced in ETH. From swapping an ERC20 into W/ETH in your wallet expressly to purchase an NFT to facing the pricing out of ETH required to purchase an NFT and pay for gas, leaving a dusting of ETH – these concerns are avoidable. And the Universal Router Contract from Uniswap makes this possible.

For the first time, this contract combines token and NFT trades into a flexible and gas-optimized swap router. It determines the most cost-effective way to exchange your inputted ERC20 token for the purchase token, such as ETH, and then settles the trade via Opensea’s Seaport — a marketplace protocol for exchanging ERC721s and ERC1155s.

This contract’s v1 now accepts single input tokens, which means NFTs can be purchased with a single ERC20 token. However, Uniswap intends to enable multiple input tokens in the forthcoming iteration of this contract. For example, if you buy two Froggy Friends today for 500 DAI, you will soon be able to buy them for 0.1 ETH and 275 DAI.

All in all, with the recent and the impending Uniswap update for NFT purchasing, users and buyers should anticipate future innovative crossings of ERC20s and NFTs.