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Friday, September 24, 2021

Ethereum-based DeFi, Uniswap’s 3rd Iteration Goes Live

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Popular decentralized exchange, Uniswap has announced the launch of its V3 deployment on the Ethereum mainnet. This highly anticipated and ambitious version of the protocol promises to let users more control over the liquidity they provide and feature more upside for riskier trades.

In short, the main objective of Uniswap v3 is to make the platform “the most flexible and efficient AMM ever designed.”

“Uniswap v3 is the most powerful version of the protocol yet, with Concentrated Liquidity offering unprecedented capital efficiency for liquidity providers, better execution for traders, and superior infrastructure at the heart of decentralized finance.”

What Does Uniswap v3 Entail?

This is what the third iteration of the decentralized finance [DeFi] protocol Uniswap involves:

Firstly, Uniswap has focused on concentrated liquidity which is any AMM’s basic functionality. The platform revealed that the liquidity providers [LP] will be able to concentrate their capital within custom price ranges, thus offering greater amounts of liquidity at desired prices. As a result, the LPs build individualized price curves that reflect their own preferences.

Secondly, the DEX platform is also introducing multiple fee tiers to enable investors to identify their risk levels while trading volatile assets.

Lastly, Uniiswap will be adding another crucial feature of the “easier and cheaper” oracle. This version will provide significant improvements to the already existing time-weighted average price [TWAP] oracles. These oracles act as a critical piece of DeFi infrastructure. Over the past couple of months, it has been integrated into dozens of projects. The V3 aims to ensure the calculation of any recent TWAP within the past ~9 days in a single on-chain call to mitigate the risk of erroneous data.


Besides, it is a cut-throat competition in the realm of decentralized finance. Especially with the fast flourishing Binance Smart Chain’s projects, the space is heating up. Currently, Uniswap is the fourth-largest DeFi protocol on the Ethereum blockchain according to the latest stats by DeFi Pulse. On the 6th of May, it registered a $7.16 billion in terms of total value locked [TVL].

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