Uniswap Labs released a draft of the code for Uniswap v4, which involves customization of liquidity pools, a new architecture based on a single smart contract, and other innovations.
Uniswap Labs, developer of the largest decentralized crypto exchange Uniswap, published its vision for the fourth version of the platform, which is an open-source project. The protocol is managed by Uniswap DAO, so the new version will be rolled out only after a public consensus is reached on the final version of the platform code. Previous versions will remain available.
Among the major innovations proposed in Uniswap v4 are:
- All liquidity pools will be based on a single smart contract. This introduces hooks, contracts that are executed at different stages of the pool’s lifecycle.
- Developers will be able to use hooks to create customized liquidity pools with completely new functions.
- Hooks will add the ability to operate as a time-weighted average market maker (TWAMM) and other trading features.
Hayden Adams, Founder of Uniswap, said the company remains committed to openness and transparency. The process of discussing and implementing the proposed innovations could take many months, as the final version of Uniswap v4 will require overwhelming community approval.
Uniswap is the largest decentralized crypto exchange (DEX) by trading volume. The third version of the protocol was rolled out on May 4, 2021. The announcement indicates that Uniswap v3’s aggregate trading volume has exceeded $1.5 trillion since then. It’s worth noting that amid pressure from the U.S. Securities and Exchange Commission (SEC) on centralized crypto exchanges, total trading volume on four major DEXs increased by ~$494 million during the first week of June. Specifically, weekly trading volume on Uniswap v3 on Ethereum reached $978 million, and on Uniswap v3 on Arbitrum reached $393 million.
