• Press Releases
    • Submit a press release
    • Read All
  • Advertise
  • Contact us
Crypto.com Logo Crypto.com Logo
Bitcoinist.com
No Result
View All Result
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • Gambling
      • Bitcoin Casinos
      • Real Money Slots
      • Online Casino Real Money
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Industry News
    • Press Releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
    • Bitcoin Casinos – Where, What and How to Play
  • Events
  • Play Games
  • Play Casino Games
  • Play Finance
Breaking News: Breaking: SEC Sues Binance And CEO For Alleged Securities Fraud
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • Gambling
      • Bitcoin Casinos
      • Real Money Slots
      • Online Casino Real Money
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Industry News
    • Press Releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
    • Bitcoin Casinos – Where, What and How to Play
  • Events
  • Play Games
  • Play Casino Games
  • Play Finance
Bitcoinist.com
No Result
View All Result
Breaking News: Breaking: SEC Sues Binance And CEO For Alleged Securities Fraud
uniswap

How Uniswap v3 Begun a New Age Of Efficiency For DeFi

Bitcoinist by Bitcoinist
2 years ago
in Industry
0

The popularity of Uniswap v2 in 2020 was unprecedented for a DeFi protocol. The decentralized exchange seemed to be the epicenter of the new financial revolution. First matching and then outperforming major trading platforms in terms of volume, Uniswap has been forked countless times to try and mimic its success.

The launch of its third iteration on May 5th introduced a new model which combines the limit order books used by traditional exchange platforms with the automated market maker (AMM) formula. This design has brought capital efficiency with more flexibility when providing liquidity.

In exchange, liquidity providers (LPs) must have an active role in the protocol. Uniswap v2 model allows a user to provide liquidity for the entire range of a trading pair. The newest iteration has a feature called concentrated liquidity and will limit it to a specific section of the price spectrum.

Therefore, users must compete to stay profitable. After its rollout, the decentralized exchange saw a bump in its number of users with the migration of around 9,500 LPs to the new iteration. This metric dropped after the hype settled, according to data provided by The Block.

With Uniswap v3 model, fewer LPs have the capacity to participate in the race to provide useful liquidity. However, they can leverage the protocol’s capital efficiency. In its second iteration, the liquidity provided for some trading pairs, such as stablecoins trading pairs, was unused.

Uniswap v3 allows users to customize the price range to which they want to provide liquidity. Most likely, they will place it on the most useful range. Thus, 100% of their capital earns fees in that useful price range.

Uniswap v3 Gains More Dominance In The DeFi Sector

Uniswap v3 demands more from LPs but provides them with new tools, a combination of passive/active strategies, future integration with L2 scaling solution Optimistic Rollups, and more interoperability with other protocols.

The Block research’s data suggest that Uniswap v3 has been more successful in attracting liquidity for trading pairs with large interest. In less than two weeks, the third iteration took over the market share for wBTC/ETH, USDC/ETH, UNI/ETH in terms of trade volume. Trading pairs with less interest and liquidity such as FEI/ETH have better trade volume in Uniswap v2. This seems likely to change over time.

Moreover, due to its efficiency Uniswap v3 can provide better trades for a trading pair between stablecoins and a token. The research predicts that these pairs will become dominant over time and have a bigger role in the exchange’s future.

Further data indicate that in a couple of weeks Uniswap v3 accounted for 80% of the second iteration trade volume and it 10% above in terms of liquidity. The metrics seem to be trending upwards suggesting the third iteration is fulfilling its objective.

Despite a difficult launch, Uniswap v3 is still a work in progress. LPs, users, market makers, are still experimenting and familiarizing themselves with its capabilities and features. The Block research’s data suggest that migration, at a low pace, is occurring. As the protocol develops and matures, it will integrate features and will operate with more pieces of Ethereum’s ecosystem to facilitate the participation of more users.

The authors of The Block’s research, Mika Honkasalo and Larry Cermak, were invited to the Crypto Unstacked Podcast episode 65 power by Amber Group. The researchers did a deep dive into the decentralized exchange’s features, its new model, its benefit, the new LP tokens functionality, and more.

On the future of the new iteration, Cermak predicts that Uniswap v3 will flip v2 in terms of volume. He said:

Eventually, it will happen (…) What’s also important to remember is that Uniswap is pushing relatively hard for people to migrate. If you go to Uniswap right now, it automatically routes you through v3 unless you want to switch to v2.

The Block’s research was unlocked by Amber Group, a leading crypto finance service provider with an international presence. This company aims to create long-term value for its clients and has been doubling down on research and academic tools, such as the Amber Academy and the popular podcast Crypto Unstacked.

Its deep dives on the latest protocols, major crypto companies, trends, and innovations have proven to be a useful tool for investors. Research, such as the one conducted on Uniswap v3, is critical to grasp the true reach of the ecosystem built on Ethereum, its limitations, capabilities, opportunities, and potential to support a new global financial system.

 

Image by rentheadnn from Pixabay
ShareTweetShareShare

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

I consent to my submitted data being collected and stored.

Bitcoinist

Bitcoinist

Bitcoinist is the ultimate news and review site for the crypto currency community!

Related Posts

Phemex, The Web3 Trade Portal

Phemex, The Web3 Trade Portal

9 hours ago
Crypto Funding Protocol AngelBlock Offers Startups Up To 15K In Grants

Crypto Funding Protocol AngelBlock Offers Startups Up To 15K In Grants

20 hours ago
Traders Should Forget Dogecoin Price Predictions and Back These 3 Meme Coins – Here’s Why

Traders Should Forget Dogecoin Price Predictions and Back These 3 Meme Coins – Here’s Why

21 hours ago
Ripple Price Prediction as XRP Network Activity Spikes 2,600% – Are Low-cap Cryptos the Best Bet?

Ripple Price Prediction as XRP Network Activity Spikes 2,600% – Are Low-cap Cryptos the Best Bet?

22 hours ago
Introducing Gem Wallet: Your Open-Source DeFi Wallet

Introducing Gem Wallet: Your Open-Source DeFi Wallet

3 days ago
HedgeUp (HDUP) will 300x in 2023 – ArbDoge AI (AIDOGE) and Volt Inu (VOLT) Hope to Follow Suit

HedgeUp (HDUP) will 300x in 2023 – ArbDoge AI (AIDOGE) and Volt Inu (VOLT) Hope to Follow Suit

3 days ago
Please login to join discussion

Premium Partners

Premium Casino Partners

Play Finance

Now Trending

  • Whale Power Unleashed: Mooky Emerges as the Rival Meme Coin...

    4 days ago
  • Exploring the Meteoric Rise of Mooky: Could It Be the Next...

    4 days ago
  • Discover the Next Big Thing: Mooky.io Presale Boasting Fair...

    5 days ago

Top Casinos

Trust Dice
Trust Dice
Punt Casino
Punt Casino
mBit
mBit
1xBit
1xBit
K8
K8

Press Releases

  • Rollman Mining Marks Its Ascent as the World’s First...

    9 hours ago
  • Top Crypto Whales Think DigiToads (TOADS) And Monero (XMR)...

    9 hours ago
  • XT.com Lists NORDEK ($NRK) in its Main Zone

    9 hours ago
  • Hedera (HBAR) Investors are now Turning Their Attention to...

    11 hours ago
  • How a College Dropout Turned $200 into $2 Million with...

    15 hours ago

Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.

Bitcoin

  • News
  • Price
  • Businesses
  • Acceptance
  • Technology
  • Investment
  • Regulation
  • Reviews

Altcoins

  • News
  • Price
  • Ethereum
  • Ripple
  • Litecoin
  • EOS
  • NAGA

Categories

  • Blockchain
  • Security
  • FinTech
  • Technology
  • Trending
  • Breaking News
  • Press Releases
  • How to

Pages

  • Contact us
  • Editorial Policy
  • Advertise
© 2023 Bitcoinist.com. All Rights Reserved.
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • Gambling
      • Bitcoin Casinos
      • Real Money Slots
      • Online Casino Real Money
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Industry News
    • Press Releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Bitcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
    • Bitcoin Casinos – Where, What and How to Play
  • Events
  • Play Games
  • Play Casino Games
  • Play Finance

© 2023 Bitcoinist. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.