- Uniswap V4 is the latest version of Uniswap Protocol with some updated features like Hooks, Singleton contracts, and many more.
- The update will increase the popularity of the protocol, resulting in more trades and orders on the platform.
Decentralization is the main key to success in the modern digital world. This decentralization movement has led to the innovation of various platforms, mainly focusing on it. This has also led to decentralized exchanges in which there is no third party involved in the exchange or swap.
One such decentralized exchange platform is Uniswap. Uniswap is a big exchange where people can trade and exchange digital money. It’s different from regular exchanges because it is not controlled by any one company. This platform runs on the Ethereum blockchain and uses a technology called Automated Market Makers (AMM) to carry out the trade.
Recently, Uniswap launched the Uniswap V4, which has gained the attention of mainstream people. So, to know what it is and how it will advance the overall functioning of the platform, we should first know about all its previous versions, namely Uniswap V1, V2, and V3.
Uniswap V1: The Official Launch of the Uniswap Platform
Uniswap V1 Was launched officially on the Ethereum mainnet on November 2, 2018. The platform has enabled the trading of ERC-20 tokens and is decentralized, censorship-resistant in nature. Anyone can swap or exchange the ERC-20 token without permission. This is all about Uniswap V1.
Uniswap V2: Introducing Pools, Oracles, and Flash Swaps
Uniswap V2 was launched 18 Months after the launch of Uniswap V1, in May 2020. This updated version has introduced several unique features like trading ERC- 20 pairs, Flash swaps, and trading pools. Flash swaps have increased the flexibility of the platform by enabling more efficient trade execution and settlement.
Uniswap V3: Focuses on Concentrated Liquidity
Uniswap V3 was launched just one year after the launch of Uniswap V2, in May 2021. With this update, the platform has introduced the well-known concept of concentrated liquidity. This feature basically provides liquidity to the platform with the help of liquidity pools, enabling greater capital efficiency.
Uniswap V4: Introducing Hooks and Singletons
Uniswap V4 was launched two years after the launch of Uniswap V3, on June 12, 2023. The platform has some unique features like Hooks and Singleton contracts. Hooks are basically contracts or pieces of code that will add new features to the liquidity pools.
They can be used to create pools that have dynamic swap fees, on-chain limit orders, and customized on-chain oracles such as Geomean oracles. This update can also help traders facilitate more complex orders. It will help the liquidity providers earn additional yields.
Singleton contracting is another feature that has come with this update. In this contract, all liquidity pools will share a single contract, rather than multiple contracts as previously used. This will also help reduce the fees for creating a new pool by up to 99%. Moreover, this update will enable the feature of flash accounting to reduce gas costs.
Uniswap V4 will make the protocol more updated and help the platform retain its place as the largest decentralized exchange. This will make the overall protocol more efficient and scalable. This will also lead to further advancements in the world of decentralized finance (DeFi).
