2023-07-15 09:19:38
Uniswap is promoting its next major protocol upgrade, Uniswap v4, with cheaper fees and smarter functionality. v3 was a complete misstep, but can the leading decentralized exchange really level up now? Perhaps not everyone is familiar with the special world of decentralized exchanges (DEX), where instead of a central order book and limit price orders, so-called automated trading protocols ensure price determination and market liquidity, and traders have only two buttons: buy or sell. These decentralized exchanges give real freedom to the most committed crypto people, where they don’t have to give out their tokens for a moment, don’t have to worry regarding identification, and can be the first to get into special projects like PEPE a few months ago. Uniswap is the number one decentralized exchange with close to a billion dollars in trading volume in the last 24 hours alone. The Uniswap team is currently working on the fourth version of Uniswap, which offers exciting opportunities by integrating the EIP-1153 standard, from which both developers and users expect the simplification of smart contracts, which will ultimately reduce gas fees. The so-called EIP-1153 it follows a singleton design approach, so all important functions would have to be created only once with a higher gas fee, and then the additional variants might be used much cheaper. This would mean that, contrary to the current practice, every trading pair or new liquidity position would not have to be done with a special gas price for all pairs, but the “stock market” function would be created only once, and then everyone would know it much cheaper for their own trading pair use. Ethereum Development Proposal No. 1153 (EIP-1153) would represent a significant step forward in improving the transaction execution efficiency of the Ethereum blockchain across the entire Ethereum network. The purpose of the proposal is to simplify operations and reduce costs related to storage during the execution of smart contracts. Uniswap aims to reduce fees by taking advantage of EIP-1153 and singleton architecture. Uniswap v3 currently generates a significant amount of gas fees, hundreds of millions of dollars annually. For veteran DEX users, the v4 narrative is strikingly similar to the promises made prior to Uniswap v3 launch. Even then, Uniswap promised smarter functionality with lower transaction fees, but the protocol update did not win the support of users to such an extent that, to this day, in all respects, the v2 version, which was intended to be superior, has many times more traffic than the current v3 version. Nevertheless, Uniswap’s UNI token shows an upward trend in the market. At the time of writing this article, it was trading at $6, which is not independent of the general upward trend of the past few days. The impact of Uniswap v4 cannot yet be fully priced in, but reducing fees may attract more users and increase network traffic.
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#Uniswap #cheaper #DEX #transactions
