Uniswap Token Pools – How to Identify Base Token from the Pool using Web3js

So IUniswapV2Pair is a cast, that casts an address into an interface, in this case the IUniswapV2Pair interface. Doing this essentially makes all the functions inside of the interface easily callable with solidity syntax.

token0() and token1() are functions of all Uniswap Pairs. They will return different addresses of underlying tokens depending on what address you call it on, ie in this case your msg.sender.

Uniswap utilizes a fixed-point number representation(Q-notation) to achieve a higher precision.

sqrtX96 means that the variable has been multiplied by 2**96 to guarantee 96 bits of precision during the computation.

Multiplying a variable by 2**96 is equivalent to shifting its bits to the left by 96 bits. During the computation, the variable now have 96 more bits with express its value. The added 96 bits will be lost in the end when the variable is divided by 2**96(shifting right 96 bits), but the added precision has been reflected to the final value.

If uint256 is used instead, some amount of precision will be lost on every step of the computation. This is because in Solidity division rounds towards zero. While the computation with fixed-point number also loses some precision, it's 96 bits more precise when compared to that of uint256.