Uniswap V4 Upgrade Analysis: Four New Features Leading DeFi Innovation

Uniswap V4 Upgrade Analysis: Four Key Features for DeFi Innovation

Crypto analyst CryptoDoctor will tell you everything you need to know about the Uniswap V4 update from four angles.

Uniswap is preparing to upgrade to version V4 and is trying to improve customizability and gas costs by introducing the following features:

• Hooks ;

• Singleton;

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• Flash Accounting;

• Native ETH.

In this article, CryptoDoctor will tell you everything you need to know about the Uniswap V4 update from the above four angles.

Hooks

Hooks are the core feature of Uniswap V4, which allows developers to create customizable, centralized liquidity pools with their own logic.

This upgrade makes Uniswap more like a basic platform, allowing developers to add new features or feature modules through Hooks.

The features and feature module examples mentioned in the V4 white paper include:

• Execute large order trades through TWAMM;

• Chain limit orders;

• Volatility-based dynamic fees;

• Internal MEV of LPs;

• Customized on-chain oracle.

Singleton

Uniswap V4 abandons the original Factor/Pool structure and consolidates all pools into a single contract called Singleton.

Singleton reduces the cost of multi-hop transactions and reduces contract deployment costs by 99%.

Flash Accounting

Flash Accounting is introduced in the Singleton structure, which is different from V3, where assets are transferred after each exchange.

In V4, each operation updates an internal net balance, and external transfers are made when the lock expires.

Native ETH

With the help of Singleton and Flash Accounting, Uniswap V4 brings back native ETH trading pairs.

This upgrade further saves gas fees (approximately half the gas cost of ERC-20 transfer) and eliminates additional packaging costs.

In addition to the aforementioned, there are a few other noteworthy features, including:

• Support for accounting under the ERC-1155 protocol;

• New fee mechanism;

• New donate() function, allowing users, integrators, and hooks to pay directly to LPs within a specific range.

From the perspective of Uniswap V4, they aim to be a non-custodial, non-upgradable, and permissionless AMM platform, allowing developers and projects to build a variety of custom hooks.

This open architecture brings greater possibilities to the Defi ecosystem. Additionally, with more and more examples of innovative hooks and combinations of hooks, Uniswap V4 will be inserted into various Defi narratives and eventually become an indispensable part of Defi.

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