Decoding UniswapX: Decentralizing Aggregated Trading, Ushering in the Golden Age of On-Chain Market Makers
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Decoding UniswapX: Decentralizing Aggregated Trading, Ushering in the Golden Age of On-Chain Market Makers
UniswapX will change the game for DEX, MEV, and interoperability.
Navigating Web3 tides with focused insightsBy: TechFlow Intern
On July 17, Hayden Adams, founder of decentralized exchange Uniswap, announced the launch of UniswapX—an non-custodial aggregated protocol based on Dutch auctions—at ETH CC.
According to an article published by Hayden Adams, UniswapX is an aggregation trading protocol that allows users to aggregate different liquidity sources to match optimal trade prices.
Currently, this feature has been rolled out in beta on the Uniswap frontend platform—users can enable it by clicking the gear icon in the upper right corner.
How to Better Aggregate Liquidity?
UniswapX aims to solve this problem by offloading routing complexity to an open network of third-party builders known as fillers. These external entities compete to fulfill users' token swap orders by leveraging on-chain liquidity (such as decentralized pools across all versions of Uniswap) or their own private inventory.
Hayden Adams explained:
“Users initiating trades can simply use Uniswap without worrying about whether they’re getting the best price, and their trades will always be transparently recorded and settled on-chain. All orders are backed by Uniswap’s smart order routing, forcing fillers to compete with Uniswap v1, v2, v3, and the upcoming v4.”
Through this competitive mechanism, UniswapX enables a series of “magical operations”:
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Better prices
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Gasless transactions
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MEV protection
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No fees if transaction fails
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Cross-chain transactions without gas (coming soon)
How Are Gasless Transactions Achieved?
Traders sign an off-chain order, which is then submitted on-chain by fillers who pay the gas fee on behalf of the trader. Since traders do not need to pay gas, they don’t even need to hold the native token of the blockchain (e.g., ETH, MATIC) to conduct transactions.
Additionally, the protocol design also helps defend against maximum extractable value (MEV) attacks such as sandwich attacks. With UniswapX, MEV that would otherwise be captured by arbitrageurs is returned to traders through improved pricing.
Hayden Adams also emphasized that UniswapX contracts are immutable—Uniswap Labs cannot modify or pause them—and user funds remain self-custodied throughout the entire trading process.
Later this year, the team plans to release a cross-chain version of UniswapX, combining trading and cross-chain transfers into a single operation.
Traders will be able to swap assets across different chains within seconds, including native asset swaps, significantly reducing reliance on bridged tokens.
DAN, a researcher at Paradigm, stated that UniswapX will change the game for DEXs, MEV, and interoperability:
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This architecture opens up vast new design possibilities for DEXs;
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It provides a better foundation for order flow auctions, enabling MEV to be returned to users;
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We’re still early—long-term, UniswapX’s order matching component could even become an ideal application for decentralized block builders like Flashbots’ SUAVE;
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Seamless cross-chain, especially cross-Rollup trading, will be revolutionary;
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UniswapX complements Uniswap V4—the improvements in the Uniswap ecosystem won’t come from zero-sum redistribution.
In summary, the combination of both points toward a promising future direction for DEXs.
Uniswap = Liquidity Protocol
UniswapX = Protocol for Finding Liquidity
When combined, Uniswap V4 and UniswapX will create expansive opportunities for professional on-chain market makers—their golden age is coming. Meanwhile, 1inch might be the least happy—previously profiting quietly, now UniswapX throws the door wide open, inviting everyone to compete in “aggregating trades.”
Finally, after reading the whitepaper, one can’t help but marvel: Chinese contributors truly hold up half the sky!
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