Uniswap v3 has finally been launched on the Ethereum mainnet.
The official announcement was made yesterday when version 3 of the DEX was deployed.
V3 is a more powerful version of the Uniswap protocol, and also includes Concentrated Liquidity which offers better capital efficiency for liquidity providers, as well as better execution for traders and superior infrastructure.
This new version was only unveiled at the end of March, and is now up and running.
The v1 was launched in November 2018 as a proof of concept of AMM (automated market makers ), while the v2 was released last year, which was precisely in May 2020.
2020 was the year of great success for Uniswap, as well as for other DEXs, so much so that a new, further improved version was needed.
The aim was to launch V3 on Ethereum’s mainnet on 5 May 2021, and that was achieved, with distribution on the Optimism second layer to follow shortly.
The version v3 of Uniswap
To make Uniswap v3 a flexible and efficient AMM, Concentrated Liquidity has been added, which gives individual LPs granular control over which price bands their capital is allocated, and multiple pricing tiers, which always allow LPs to be adequately compensated for taking on varying degrees of risk.
In addition, the gas cost of v3 swaps on the Ethereum mainnet is slightly cheaper than with the previous v2, while those that will be made on the Optimism distribution will be significantly cheaper.
A migration portal to v3 for Uniswap v2 and Sushiswap LP has also been released.
However, although after 6 weeks of testing the Uniswap v3 bug bounty did not reveal any major issues, v3 is a complex new protocol and it is not possible to guarantee that all bugs have been found and fixed.
The Uniswap v2 protocol will remain functional and available for use as long as the Ethereum network continues to exist, but over time the benefits of Uniswap v3 should take most of the liquidity and trading volume away from v2.
So there is no obligation to migrate to v3, but it will likely be more beneficial, so much so that the Uniswap team believes that most of the trading volume will occur on v3.