By
Svetlana Soroka
April 24th, 2024
Uniswap describes its V3 project as the “most flexible and efficient automated market maker ever designed.”
Uniswap, a world-famous decentralized exchange platform, has broken two of its records in the past week, ahead of its widely anticipated V3 update. The Uniswap V3 update is scheduled to launch on May 5th 2021, and as a count down to its launch approaches, Uniswap and its derivatives have enjoyed a massive run of success.
Over the last week, Uniswap’s decentralized exchange broke a $10 billion trading volume record, reaching over $43 billion in total market cap. And now, over the previous 24 hours, the native token of Uniswap (UNI) has reached an all-time high of over $44, shattering its previous record, gaining 4.95% in price and 87.53% in trading volume since yesterday.
Uniswap is one of the most popular DeFi exchanges globally. It is an “Automated Liquidity Protocol” that allows users to swap ERC-20 tokens with intermediaries in a decentralized ecosystem. Uniswap precludes the use of order books by providing a platform on which Automated Market Makers (smart contracts) can hold liquidity pools for traders to trade against; these liquidity pools are funded by anyone who can put 2 UNI tokens or equally valued digital assets into one.
Uniswap has undergone many developments since its birth in 2018 at the capable hands of Hayden Adams. However, the “public good” protocol has been updated only once. Uniswap V2 was introduced in May 2020 and offered optimizations and upgrades that redefined the DeFi crypto space. The Uniswap V2 update drove an exponential and global adoption of the Uniswap protocol by providing vital infrastructural services to the DeFi space, developers, users and Liquidity makers.
However, the advent of Uniswap’s V3 update on May 5th promises to change the DeFi landscape once again, drawing investors and other interested parties to the DEX platform. The V3 platform introduces features that set Uniswap apart in the market, features like Concentrated liquidity for individual Liquidity Providers, multiple fee tiers for Liquidity Providers so they can be compensated according to the risk taken, significantly lower gas costs and Capital efficiency for low-slippage trade execution.
Uniswap came forward to introduce their V3 project as the “most flexible and efficient automated market maker ever designed.” A seemingly ambitious claim. Yet, their faith in the V3 project is not unreasonable, with investors flocking to Uniswap after the V2 upgrade, which tremendously benefited the crypto space. And the V3 project will no doubt rival and even surpass the success of its predecessor.