Uniswap Gives First Look at V4

Uniswap is one of the largest and most popular decentralized exchanges (DEXs) that crypto has to offer. It regularly handles billions of dollars in transactions each week, and it frequently has greater trading volume than even Coinbase.

Beyond its dominant position among DEXs, Uniswap is also usually on the cutting edge of DeFi. The original Uniswap exchange basically invented the DEX, while the third version, Uniswap V3, introduced the now-popular “concentrated-liquidity” function, which allowed participants to provide liquidity within a custom price range.

Now, the DEX king is due for its next big upgrade.

Enter V4

That upgrade is the fourth iteration of the exchange, the creatively named Uniswap V4.

The big addition in V4 is “hooks”, a “powerful new way to customize liquidity pools”. Simply put, hooks are plugins that allow users to customize how pools, swaps, fees, and liquidity providers interact. For example, hooks will enable the development of a time-weighted average market maker and on-chain limit orders – things that were previously impossible to do in Uniswap V3.

The other big improvement coming from V4 is the “singleton”. The singleton is a single smart contract that contains all of the liquidity pools deployed on V4. Because the singleton provides a single point for all trades to be routed through, gas fees for swaps and creating a pool should be dramatically reduced.

A Decentralized Improvement Process

These are already massive upgrades, but it very well could be just the beginning for V4. Keeping with their decentralized principles, Uniswap is building V4 in public and is actively considering community feedback before officially deploying V4.

In other words, anybody in crypto can come and suggest improvements to V4.

Couple this with the fact that the centralized exchanges are currently at war with the SEC, and it suddenly becomes very easy to picture a world in which Uniswap and other DEXes dominate the exchange landscape.