— Walletor (@walletorapp) June 13, 2023
The best decentralized exchange on the market, Uniswap, has revealed Uniswap v4. This upgrade will have features that are customizable, and it has released the draft core code so that the community can build on top of it.
She said, “The possibilities are pretty endless.” Moreover, she added that they are making the progress of v4 public so that the community “can take it anywhere.”
Decentralized exchanges are platforms where people can trade crypto without the need for an intermediary. DEXs let users swap and hold tokens without giving up control over them. According to DefiLlama, a volume dashboard, with $3.87 billion in Total Value Locked (TVL), Uniswap is the top decentralized exchange on the market.
Uniswap V4 Upgrade
In 2021, when version 3 of the Ethereum-based Uniswap platform came out, it made huge news. Version 3 added Automated Market Makers (AMM), multiple fee tiers, and real-time, on-chain price oracles. But v4 will let people create their own features.
Uniswap says it is adding a new type of smart contract called “hooks,” which will let developers add to liquidity pools that are already in place. These contracts have tokens that are locked, but other users can pay a fee to open them and use them for other things.
Reynolds says that “hooks” is “kind of limitless” in terms of how it can be changed because it has so many new ideas. They will make it possible for things like time-weighted average market makers (TWAMM), which spread out buy orders over a long time. She says to think of it as Daily Cost Averaging (DCA), but with no work on your part (automatically).
The new release will also allow fees that change based on how volatile the market is and on-chain limit orders. It will also be possible to change liquidity pools while they are in use.
This fourth version also wants to cut the cost of gas used to create pools by 99%. This has been a big problem for traders over the years. Raynolds said that this is done with “singleton” contracts. Which will let all pools live under one contract and make transportation much more efficient.
Moreover, she noted, “There are directions the community can take this that we aren’t even aware of at the moment.”