Uniswap V4 Upgrade Explained: Four New Features Leading DeFi Innovation
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Uniswap V4 Upgrade Explained: Four New Features Leading DeFi Innovation
CryptoDoctor, a crypto analyst, will tell you everything you need to know about the Uniswap V4 update from four perspectives.
Navigating Web3 tides with focused insightsAuthor: CryptoDoctor
Translation: TechFlow
Uniswap is preparing to upgrade to version V4 and aims to improve customizability and gas costs by introducing the following features:
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Hooks;
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Singleton;
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Flash Accounting;
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Native ETH.
In this article, crypto analyst CryptoDoctor will explain everything you need to know about the Uniswap V4 update from these four perspectives.
Hooks
Hooks are the core feature of Unisamp V4, enabling developers to create customized concentrated liquidity pools with their own logic.
This upgrade transforms Uniswap into more of a foundational platform, allowing developers to add new functions or modules via Hooks.
Examples of functions and modules mentioned in the V4 whitepaper include:
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Executing large orders via TWAMM;
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Limit orders on-chain;
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Volatility-based dynamic fees;
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Internal MEV for LPs;
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Custom on-chain oracles.
Singleton
Uniswap V4 abandons the original Factory/Pool architecture, instead consolidating all pools into a single contract called the Singleton.
The Singleton reduces costs for multi-hop trades (i.e., swaps requiring multiple conversions) and cuts contract deployment costs by 99%.
Flash Accounting
Flash Accounting is introduced within the Singleton structure, differing from V3 where assets are transferred after each swap.
In V4, each operation updates an internal net balance, with external transfers occurring only at the end of the lock period.
Native ETH
With Singleton and Flash Accounting, Uniswap V4 reintroduces native ETH trading pairs.
This upgrade further saves gas fees (approximately half the gas cost of ERC-20 transfers) and eliminates additional wrapping costs.
Beyond the above, some other notable features include:
• Support for accounting under the ERC-1155 standard;
• A new fee mechanism;
• A new donate() function that allows users, integrators, and hooks to make direct payments to in-range LPs.
From Uniswap V4's perspective, the goal is to become a non-custodial, immutable, and permissionless AMM platform that enables developers and projects to build various customized Hooks.
This open architecture brings greater possibilities to the DeFi ecosystem. Moreover, as more innovative Hooks and combinations of Hooks emerge, Uniswap V4 will be integrated into diverse DeFi narratives and ultimately become an indispensable part of DeFi.
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CryptoDoctor
