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News

Uniswap V4 Promises Lower Gas Fees and Bigger LP Profits

2 mins mins
Uniswap V4 Promises Lower Gas Fees and Bigger LP Profits

Key Points:

  • Multi-hop route ETH -> USDC -> USDT delivers better prices than a single-hop v3 pool, despite v3’s larger TVL.
  • Uniswap V4 offers lower multi-hop route costs and native ETH transactions, optimizing user exchange rates.
  • Gas savings = better exchange prices = higher LP profits, positioning V4 for widespread adoption.

Hayden Adams, the founder of Uniswap, took to social media platform X to highlight a key breakthrough with the release of Uniswap V4.

Uniswap V4 Boosts Efficiency and LP Profits

In a post, Adams tested an exchange of $1,000 ETH to USDT, 12 hours after V4’s launch. He shared that Uniswap V4’s routing algorithm recommended a multi-hop exchange route of ETH -> USDC -> USDT through two V4 pools, with a total TVL (Total Value Locked) of $400,000, offering the best price.

What made this multi-hop route stand out was its ability to outperform a single-hop exchange through any v3 ETH/USDT pool, despite the latter having a significantly larger TVL of $150 million. Adams emphasized that this result pointed to the significant advantages of V4, particularly when it comes to gas efficiency. The lower costs for multi-hop routes and native ETH transactions allowed users to secure better prices and potentially boost LP (Liquidity Provider) profits.

Read more: Uniswap V4 Security Contest Kicks Off with $2.35M Prize Pool!

Gas Efficiency Drives Uniswap V4’s Success

Adams believes that gas efficiency will be one of the biggest growth catalysts for V4, driving further adoption. With lower gas fees equating to better exchange prices and more LP profits, Uniswap V4 could attract more users and liquidity providers to its platform.

The launch of Uniswap V4 marks a significant leap forward for decentralized exchanges, offering users an enhanced trading experience with lower costs and better prices. The gas efficiency improvements introduced in V4 will likely lead to wider use of the platform and greater interest from liquidity providers seeking higher profits.

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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Avatar of Yuna Kim

Yuna Kim

01 February 2025, 16:47:25 GMT +0000

With a deep passion for unraveling the complexities of finance and crypto, I have dedicated over 5 years to financial journalism, covering everything from traditional equities to the forefront of venture capital. I believe that crypto is a fascinating puzzle, and I thrive on helping people make sense of it.

As a journalist at Coincu, my mission is to deliver clear, insightful, and well-researched content that empowers readers to navigate the ever-evolving financial landscape with confidence.

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