HOT: Uniswap Labs Revealing New Version Of Uniswap, UNI Jumps Over 6%

Key Points:

• Uniswap Labs has revealed its plans for the next version of its cryptocurrency trading platform, Uniswap v4.
• The Uniswap community will administer the exchange.
• The developer intends to improve the DEX’s coin-swapping capabilities with the v4 update by integrating “hooks” and unique liquidity pools.

According to a June 13 blog post by Uniswap’s Founder, Hayden Adams, Uniswap Labs has published a draft of the code for Uniswap V4. The new code includes “hooks” or plugins that enable developers to construct their own liquidity pools.

The new design will be more efficient, with preliminary data indicating that it will lower the cost of pool construction by 99%. It will also enable developers to make their own compromises, enabling them to create minimalistic pools that are less expensive to operate. Perhaps the most significant difference is that it opens up a far larger playing field for developers to construct their own pools with their own rules, possibly leading to much more experimentation.

For the first time, Uniswap Labs is soliciting community input on Uniswap v4 prior to its public release. This community-driven initiative is intended to highlight Uniswap’s commitment to decentralization. It is a significant distinction intended to distinguish decentralized exchanges (DEX) from centralized exchanges (CEX), such as Coinbase and Binance, which are now facing SEC litigation.

Uniswap is the world’s biggest decentralized crypto exchange by volume. The most recent version, V3, was released on May 4, 2021. Uniswap is widely recognized for popularizing automated market makers (AMM), a sort of blockchain-based computer software, or “smart contract,” that allows cryptocurrency exchanges to take place without the involvement of middlemen.

According to DefiLlama, Uniswap v3 is the biggest decentralized exchange by trading volume, having completed over $1 trillion in transactions since its creation.

Uniswap V4 is a completely new protocol, according to Sara Reynolds, the smart contract engineer at Uniswap Labs. But, developers will be free to pick which one to employ since it will coexist with V3, which is immutably written to the Ethereum blockchain.

The code has been open-sourced and will be inspected and tested publicly in the next months before being released under a Business Source License 1.1, which will eventually migrate to a GPL license. The Uniswap community, made up of UNI token holders, will control the exchange. Together with the V4 code, Uniswap Labs issued a draft technical whitepaper.

The developer intends to improve the DEX’s coin-swapping capabilities with the v4 update by introducing “hooks” and unique liquidity pools. Uniswap Labs CEO Hayden Adams characterized hooks as plugins to tailor how pools, swaps, fees, and LP positions interact in a blog post published on Tuesday.

According to Adams, the new capabilities might open the way for on-chain limit orders and dynamic fees, which may be accessible on more conventional exchange platforms but are more difficult to execute in a blockchain setup with no middlemen or centralized order books.

A flash accounting system will also be included in the upcoming version of Uniswap. All of the pools will be covered by a single contract under the new design. As a result, the protocol just needs to return the user’s net balances. This reduces blockchain transaction expenses while increasing flexibility.

Following the news, the UNI price spiked by more than 6%, outperforming other altcoins but quickly returning to its former levels.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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