Leading decentralized exchange (DEX) Uniswap outlines the platform’s vision for the next generation model V4. 
Uniswap v4 is designed to revamp and revolutionize the Uniswap network and advance key structures. 

The team at Uniswap has rolled out its vision for Uniswap v4, after confirming that progress is still ongoing with the next-generation model.

Two years after releasing Uniswap v3, which mainly catered to on-chain liquidity and DeFi, the Unisawp protocol has become the largest decentralized exchange protocol, after processing over $1.5 trillion in trading volume.

As technology advances, Uniswap is moving with the tides, as it accelerates plans to launch Uniswap v4, with the goal of restructuring the liquidity creation method and the current token trading process. Uniswap wrote;

Our vision with Uniswap v4 is to allow anyone to make these tradeoff decisions through the introduction of “hooks.” Hooks are contracts that run at various points of a pool action’s lifecycle. Pools can make the same tradeoffs as v3, or they can add new functionality.

On Uniswap v3, liquidity is not as flexible. However, on Uniswap v4, there will be more room for customizable liquidity. With Hooks, plugins to customize how pools, swaps, fees, and LP positions interact, are introduced to the network. In the near term, Uniswap will execute a handful of experiments to help validate the new structure for Hooks.

Unlike Uniswap v3, where new contracts were deployed for every pool, all pools will be held in one singleton contract, designed to provide gas savings, as swap will no longer be responsible for transferring tokens between pools held in different contracts.

Uniswap v4 License and Governance to remain transparent

According to estimates carried out by Uniswap, v4 significantly reduces pool creation gas costs by 99 percent. While Hooks introduces infinite options to the network, the singleton architecture makes room for efficient routing across all pools.

As explained in the announcement blog post :

This singleton architecture is complemented by a new “flash accounting” system. Instead of transferring assets in and out of pools at the end of every swap in v3, this system transfers only on net balances — meaning a far more efficient system that provides additional gas savings in Uniswap v4.

Regarding the license and governance structure, Uniswap will remain committed to transparency and decentralization. Like previous versions, the Uniswap team and community members will be in charge of governing v4 of the protocol.

Uniswap intends to release the code under a Business Source License 1.1. The license will limit the use of the v4 source code in a commercial or production setting for a minimum of 4 years, after which it will convert to a GPL license into perpetuity. Regarding the Protocol fee mechanism, Uniswap intends to model it after v3, and governance will have the capacity to vote and include a Protocol fee to any pool, up to a certain amount.

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Filed under: Bitcoin - @ July 8, 2023 8:32 am