The new version of the most important DeFi DEX, Uniswap V3, is now live on the Ethereum mainnet.
The development team of Uniswap informed its community of users that the new version of the decentralized exchange (DEX), Uniswap V3, is now available on the Ethereum mainnet. The launch occurred as planned a few months ago, to introduce new improvements and updates to the protocol and continue being the most important decentralized exchange in the ecosystem.
Uniswap has emerged as the leading DeFi DEX, and has marked several important milestones along its journey, the most recent being the alcanzar a trading volume that exceeds 10.000 billion weekly. At the time of this writing, the transactions that take place within this DEX occupy more than 55% of the total transactions that occur in DeFi DEXes, which does not give an idea of the great use that traders and investors give to Uniswap.
Now, with the official launch of its new version, Uniswap V3, the DEX seeks to continue leading the decentralized finance ecosystems, offering the first-of-its-kind capital efficiency for liquidity providers (LPs).
It may interest you: Uniswap V3 Coming Soon to Ethereum Mainnet to Improve Capital Efficiency
Capital efficiency
Uniswap developers aim to make this DEX the most efficient and reliable DeFi protocol in decentralized ecosystems. To do this, Uniswap will allow liquidity providers (LPs) to customize the capital they want to add to preferred liquidity pools, as well as fee levels to generate returns in line with the degree of risk assumed in operations.
Capital efficiency allows individual LPs to have granular control over the price ranges to which their capital is allocated, so they can define the price of selling or exchanging one asset for another with a range above or below what the market is showing at a given time. This functionality allows LPs to obtain better returns, based on their objectives, in addition to providing liquidity with up to 4.000x greater capital efficiency compared to the v2 version of the protocol.
“Uniswap v3 is the most powerful version of the protocol yet, with Concentrated Liquidity delivering unprecedented capital efficiency for liquidity providers.”
LPs can now concentrate their capital within their desired price ranges in a customized manner, providing larger amounts of liquidity to the pools, pairs, or markets of their choice.
With capital efficiency, Uniswap V3 aims towards low-slippage trade execution, allowing LPs to significantly increase their exposure to their preferred assets while reducing their downside risk.
Oracles and NFTs
The new version of the protocol is also equipped with highly reliable advanced decentralized oracles, capable of providing time-weighted average prices (TWAP) on demand, for any period within the last 9 days or so. This ensures ease when creating oracles that include simple moving averages (SMA), exponential moving averages (EMA), outlier filtering, and more.
Uniswap developers claim that this major upgrade to the protocol's oracles does not increase gas costs, but rather the opposite. Uniswap V3 has managed to reduce gas costs for keeping advanced oracles up to date by approximately 50% compared to the costs of the V2 version. This ensures affordable access to advanced oracles that improve data integrity.
On the other hand, the development team revealed that now LP positions will be represented by non-fungible tokens (NFT).
Migrating from Uniswap V2 to Uniswap V3
Uniswap developers have created a migration portal for Uniswap v2 and Sushiswap LP users to seamlessly migrate their liquidity and assets to the new V3 version.
Uniswap V2, according to the protocol, has a Total Value Locked (TVL) of $8.430 billion, Whereas the Daily trading volume on DEX hits $1.170 billion, at the time of this writing. Meanwhile, in Uniswap V3, the TVL already exceeds 293 million, since its official launch on May 5. Likewise, the trading volume in V3 is higher than the $100 million in the last 24 hours.
Source: Uniswap
According to the protocol statistics, since Uniswap V3 was launched, the TVL has grown by over 440.000%, while the daily transaction amount is 12.400% higher than on its first day of operations.
UNI and the gains in DeFi
Just like reported Bit2Me News yesterday, monthly revenue in DeFi exceeded $252 million last April. The data provider The Block Crypto Data shows that 44% of this monthly revenue comes from Uniswap, which has already generated over $1.400 billion in annual revenue for holders of its UNI token.
Since its launch in late 2020, UNI has appreciated by more than 4.000%, going from an initial value close to $1, to more than $41 at the close of this edition.
Finally, the launch of the new version of Uniswap is expected to attract a larger number of investors, which in turn will increase the liquidity stored within this protocol and the DeFi ecosystem in general. Although some experts in the industry say they are concerned about the flip side of Uniswap V3, which may make the process of providing liquidity more complex for certain LPs on the protocol.
Continue reading: Uniswap V3 Contracts Arrive on Ethereum's Ropsten, Rinkeby, Kovan, and Goerli Networks
