Uniswap v3 launches tomorrow where we will see new features that make liquidity go further and lower trading risk so let’s find out more in our latest crypto news today.
Uniswap v3 launches and adds more liquidity, better oracles, and new fee tiers and is competing with trading protocols like SushiSwap and Pancakeswap. Also, we can see now that there are new products and features that are dropping every week in the DeFi space so the top decentralized exchange can afford to rest.
Uniswap which upgraded to version 2 last May, aims to release the third version of its protocol which promises to give the users more control over the liquidity they provide and feature more upsides for the riskier trades. DeFi is a multi-billion dollar industry that replaces the traditional financial institutions and brokerage companies with smart contracts built atop on the blockchain network. With Defi, one can get loans and earn interests, swap tokens and place bets on future values.
— Hayden Adams 🦄 (@haydenzadams) May 3, 2021
Ethereum has a $391 billion market cap and more than $77 billion in crypto that is invested in the Ethereum-based Defi protocols, showing how important the sector is to the blockchain’s expansion. Uniswap is the most popular Ethereum-based DEX which allows people to swap tokens that run via the Ethereum network. Uniswap itself is an automated market maker which means it relies on algorithms to price assets rather than buy and sell orders. These on the platform provide liquidity by locking up the tokens they own while others can borrow the tokens and pay interest to the liquidity providers.
The ERC20 token on the exchange includes the dollar-pegged stablecoin like USDC and Tether as well as governance tokens like Aave and Maker. The goal is to become the most flexible and efficient AMM ever designed. The DEX is highlighting three new features. The first one is concentrated liquidity as Uniswap wrote in the press release:
“Automated market makers have historically required all [liquidity providers] to share identical strategies and deposit capital across the entire price curve from 0 to infinity. In doing so, they have failed to account for individual expectations of future price activity.”
Furthermore, Uniswap added more fee tiers so that the traders can determine the risk levels when trading volatile assets. And lastly, it is introducing cheaper oracles that make sure the price is up to date and will reduce the risks of getting burned by bad data.
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