Uniswap v4: Revolutionizing DeFi with Unlimited Customization

Coin WorldMonday, Feb 3, 2025 10:08 am ET

1min read

Uniswap Labs, the leading decentralized exchange, has unveiled Uniswap v4, its latest and most flexible DeFi protocol. The launch, hailed as a "new era of DeFi" by Uniswap's Founder and CEO Hayden Adams, follows a $15.5 million bug bounty program and extensive security reviews, including nine audit reports and a $2.35 million security competition. Uniswap v4 is now live on Ethereum, Polygon, Arbitrum, OP Mainnet, Base, BNB Chain, Blast, World Chain, Avalanche, and Zora Network.

Uniswap v4 introduces Hook Contracts, a new feature that offers unlimited customization and modification actions for developers. Hooks enable developers to create new market structures, build bespoke trading features, and make add-ons directly into the protocol. This opens avenues for new startups to experiment and implement their own DeFi innovations, driving deeper liquidity and more swapping options. Developers can customize how pools, swaps, fees, and LP positions interact, unlocking creativity and innovation.

In addition to Hook Contracts, Uniswap v4 offers other new features such as Singleton contracts, support for Native ETH, and Flash & Custom Accounting. Singleton contracts will hold all pool states in one contract, while Custom Accounting allows hook developers to alter end-user actions. Native ETH is being bought back in Uniswap v4, and Flash & Custom Accounting enables a caller to lock the pool and access any of its tokens as long as they are not owned by the end of the lock.

Uniswap v4 is built on the automated market maker (AMM) model to efficiently facilitate value exchange on the Ethereum Virtual Machine (EVM). It also supports the mining/burning of Singleton-implemented ERC-6909 tokens. The new protocol offers gas savings of 99.99% for both swappers and Liquidity Providers (LPs) compared to V2 and V3.

Uniswap v4 marks a significant evolution from its earlier protocols. Launched in 2018, Uniswap v1 and v2 used the constant product market maker (CPMM) model, while v3 introduced concentrated liquidity. However, the previous versions lacked flexibility to support new evolving functionalities of DeFi and required deployment of a new contract for new pools

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