Hayden Adams, CEO of Uniswap Labs, has emphasized the main features of the recently launched Uniswap V4, which represent significant enhancements over Uniswap V3.
The gas efficiency of Uniswap V4 has significantly increased in comparison to V3. This implies that the protocol may enable consumers to experience transactions at a reduced cost.
Adams illustrated this by converting $1,000 worth of Ethereum (ETH) into Tether (USDT) via the Uniswap V4 in the 12 hours following its introduction.
He stated that the Uniswap algorithm recommended that he utilize a multihop route rather than a single-hop swap.
Two V4 pools with a cumulative Total Value Locked (TVL) of $400,000 were employed in the multihop exchange from ETH to USDC and USDT. In contrast, the single-hop exchange, which utilizes V3 pools to facilitate direct ETH to USDT, has a substantial TVL of $150 million.
One of the benefits of Uniswap’s V4 is that the multihop route still provided the most favorable pricing, even in the presence of reduced liquidity. This is a result of the enhanced gas efficacy of V4, which decreases exchange costs and makes multihop routes more cost-effective.
Furthermore, this results in improved prices for V4 consumers and ensures that liquidity providers can earn a higher profit.
Experts regard this development as a significant victory for the Ethereum chain and a critical factor in the ecosystem’s expansion. They attributed the success to the Dencun upgrade, which improved the efficacy of smart contracts. This, in turn, facilitates the implementation of innovations such as the Uniswap V4 architecture.
According to analysts, the more efficient route enables smaller pools to compete with larger pools in the ecosystem, in addition to the reduced petroleum fees.
This could potentially result in a more widespread adoption and appreciation. Uniswap (UNI) has once again fallen below the $12 support level as of the time of this writing. The stock of UNI was trading at $11.43, representing a 3.37% decrease in the past 24 hours.
Nevertheless, the transaction volume has increased by 58.93%, reaching $336.42 million. In the short term, this renewed interest from investors could assist Uniswap in rebounding.
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