Important crypto news for Uniswap, which has finally announced its v4 version: new possibilities in the area of liquidity creation and token exchanges on the blockchain.
The news is reported from their own Twitter channels, which reads:
Uniswapv4: new possibilities in trading tokens and beyond
Two years ago, Uniswap introduced Uniswap v3, a watershed moment for on-chain liquidity and DeFi.
Currently, the Uniswap protocol has become the largest decentralized exchange protocol, handling a total trading volume of more than $1.5 trillion.
As a public infrastructure, it represents a crucial part of the crypto ecosystem.
But as technology and markets evolve, the Uniswap protocol has to continue to develop.
Therefore, Uniswap is presenting its vision for Uniswap v4, which will open up new possibilities in the area of liquidity creation and token trading on the blockchain.
Uniswap currently has made the draft code available so that v4 can be compiled publicly, with the goal of receiving open feedback and meaningful contributions from the community.
However, the team anticipates that this process will take several months. Currently, it is possible to view the first open source version of the main and related repositories of Uniswap v4 and read the draft technical whitepaper.
What will change with Uniswapv4?
As we know. Uniswap v3 has taken a powerful and sophisticated approach to providing liquidity, addressing an intricate trade-off area. However, new features come with higher costs and greater code complexity.
For example, v3 introduced oracles, allowing developers to integrate on-chain price data in real time, but at the expense of additional costs for users making trades.
Now, the vision for Uniswap v4 is to allow anyone to make trade-off decisions through the introduction of “hooks.” Hooks are contracts that are executed at different points in the life cycle of a liquidity pool.
Pools can make the same tradeoffs as in v3 or they can add completely new features.
For example, v4 will allow pools to support dynamic fees, add on-chain limit orders, or act as a time-weighted automated market maker (TWAMM) to distribute large orders over time.
Along with this customization, Uniswap v4’s architecture reduces costs and provides efficiency. It introduces a new “singleton” contract, in which all pools reside within a single smart contract.
Uniswap believes that the combination of hook and singleton architecture creates an extremely powerful platform, enabling fast and secure customization of pools and efficient routing across many pools.
So, Uniswap v4 brings fast and expressive innovation in Automated Market Makers (AMMs) within a powerful ecosystem.
All the crypto news about Uniswap v4: hooks, custom pools and more
As anticipated, Uniswap v4 is a new version of the Uniswap protocol that introduces the concept of “hooks” and custom pools.
Each liquidity pool in Uniswap has a lifecycle during which different operations take place. In Uniswap v3, these life cycle stages are tightly coupled and executed in a rigid sequence.
With Uniswap v4, we want to provide the ability for pool providers to introduce custom code that is executed at key points during the pool lifecycle.
For example, actions can be executed before or after an exchange or before or after a liquidity position has been changed.
These “hooks” act as plug-ins that allow the interaction between pools, trades, fees, and liquidity positions to be customized.
Developers can use hooks to innovate beyond the simple provision of liquidity and security of the Uniswap protocol by creating custom AMM pools that integrate with Uniswap v4 smart contracts.
Finally, the team created example contract hooks to provide a baseline and understanding of the current framework.
Thus, it is expected that developers will be able to think of new and interesting ways to create functionality that has not even been imagined until now.