Understanding Uniswap V4: Cost Reduction and Efficiency Enhancement, Personalization and Aggregation

Original author: SJ Crypto

Original source: Twitter

Yesterday Uniswap released an introduction to the vision of V4, briefly introducing and disclosing the features to be updated. Although I don’t hold #Uni myself, in keeping up with the times (boredom) principle, I’ll make a functional summary that you can understand. Because I looked through the Chinese information and found that most of it is organized and directly translated, it feels like I’ve seen something, but I haven’t received anything.

Actually, Uniswap V4 has only one core: increasing efficiency and reducing costs;

1. Efficiency increase-Hooks

This feature is translated as [Hooks], and I will call it that for now.

The main purpose I summarized it as: pool customization modularization. That is, package each function and give it to the developer. The developer only needs to customize it according to the needs of their own project pools.

Under the conditions of modular combination, the pool’s operable space becomes larger, that is, the pool creation will be more in line with the pool’s own needs for functions (of course, this operable space must be within the range that can be provided), which is basically equivalent to giving you a module library.

2. Cost reduction-Singleton

This is a design that changes the underlying architecture of Uniswap. Originally, there were multiple tokens and multiple contracts, but now there are multiple tokens and one contract;

The main purpose is to change the original liquidity pool and package them together. For example, it is easy to understand:

  • Originally, if you want to take a bus, you need to go to a fixed station to take a specific bus, but now you can go directly to the bus parking lot and just get on the bus you want without having to find a station separately;

  • Based on this logic, it is also easier for you to go where you want or take which bus.

The above example may be a bit general, but at least one thing is clear, The design core of Singleton is: pool aggregation, reducing interaction costs.


In addition, this design needs to be combined with the EIP-1153 protocol, which will further reduce the cost of a single transaction. EIP-1153 needs to be deployed after the Cancun upgrade, so the actual deployment of V4 will be after Cancun at least.

  • About EIP-1153: Simply put, it is a temporary expansion function of the block to accommodate transactions, so as to reduce Gas.

However, the use of this protocol is not competitive. Uni can use it, and other swaps can use it~

The focus of this vision is basically these two items, the secondary summary is: personalization and aggregation.

3. Don’t hype V4

Finally, I want to express some personal opinions: don’t hype V4.

Every time there is good news about Dex, it is compared with Cex. Can they be compared? They are not in the same race track. Although there is overlap in functionality, the demand is an insurmountable gap.

Why? Because users are always lazy.

All kinds of functions are so glamorous, but they cannot solve the problems of demand outside of trading, such as cashing out, understanding thresholds, and “after-sales service”….

These are all pain points that Dex cannot solve, and they are services that Cex can provide. Pool interaction and token transactions, the former is possible for Dex, and the latter has a better experience for Cex.

Why? Because of screening.

The centralized exchange comes with a listing screening mechanism, which Dex does not have. Why is screening important? This is the endorsement of security and platform trust brought by third-party centralization.

To put it more popularly: If the project party runs away, who do you go to for rights protection in Dex?

Well, let’s talk about something more heart-wrenching. Even if we ignore the above, what does your Uniswap have to do with #Uni?

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