- Uniswap v3 launches today seven months after first details were announced
- Uniswap v3 promises cheaper fees through Optimism integration
- Liquidity providers also have more control over their capital allocation and can enjoy multiple fee tiers
A year since upgrading from v1 to v2 and some seven months after being teased, Uniswap v3 is finally upon us. With the platform now more popular than ever, witnessing its highest ever seven-day trading volume last month ($11.18 billion), Uniswap users will be chomping at the bit to try out the new platform. What are the key changes we can expect from Uniswap v3? Let’s find out.
Optimism
Uniswap plans to launch on Ethereum mainnet today with a launch on its layer 2 solution Optimism “to follow shortly after”. This will result in trades being “significantly cheaper” according to Uniswap, and represents a big test of the L2 protocol, something that could attract back traders who left the platform due to Ethereum’s ridiculous fees.
Concentrated Liquidity
Concentrated liquidity gives individual liquidity providers much more control over the price ranges to which their capital is allocated. Individual positions are combined together into a single liquidity pool, forming a single combined curve for users to trade against.
Multiple Fee Tiers
Uniswap v3 will have three fee tiers per pair for liquidity providers – 0.05%, 0.30%, and 1.00%. This allows liquidity providers to tailor their risk, ensuring that liquidity providers are “appropriately compensated” for taking varying degrees of risk.
Uniswap v3 to Challenge Centralized Exchanges?
Uniswap claims that these changes will allow liquidity providers to get up to 4,000x more capital efficiency than with Uniswap v2, adding that their new model will allow them to challenge and even in some cases surpass trade executions on centralized exchanges. Creator Hayden Adams has also promised a “fun little surprise” for launch day…it couldn’t be another airdrop could it? Please?
