The Uniswap Foundation has announced that the launch of Uniswap’s version 4 protocol is tentatively scheduled for the third quarter of 2024. This eagerly anticipated upgrade is contingent upon the implementation of Ethereum’s upcoming Dencun hard fork, expected to occur in March. The rollout of Uniswap V4 will follow a rigorous security audit of the protocol initiated from the Dencun hard fork.
Uniswap stands as the most prominent automated market maker (AMM) in the decentralized finance (DeFi) landscape, facilitating token trading through liquidity pools rather than conventional order books. Since its inception in 2018, Uniswap has evolved through various iterations, with Uniswap V3, introduced in May 2021, currently in operation. Notably, Uniswap V3 introduced the concept of “concentrated liquidity,” allowing liquidity providers to designate specific price ranges to optimize fee generation.
The upcoming Uniswap V4 release signals a transition towards a more modular framework, primarily through the integration of “hooks.” These smart contracts enable enhanced customization within Uniswap’s liquidity pools, facilitating dynamic fee structures, on-chain limit orders, and tailored on-chain oracles.
Moreover, Uniswap V4 will debut a “flash accounting” system designed to reduce fees for liquidity providers. This innovation relies on “transient storage,” a feature activated by the proposed Ethereum Improvement Proposal (EIP) 1153, slated for integration into the Ethereum protocol during the Dencun hard fork.
Uniswap’s V4 upgrade represents a significant milestone in the DeFi ecosystem, promising increased flexibility, efficiency, and cost-effectiveness for users and liquidity providers alike. As the DeFi landscape continues to evolve, Uniswap remains at the forefront of innovation, driving forward the decentralized exchange paradigm with each successive iteration.