Expert Takes: Crypto Exchange Uniswap V3 Launch
Decentralized exchange UniSwap has announced the launch of UniSwap v3 on the Ethereum mainnet.
UniSwap v3 introduces concentrated liquidity and multiple-tier fees. According to UniSwap, the new features will make the exchange “the most flexible and efficient automated market maker ever designed” making gas fees cheaper on Ethereum transactions.
LPs will be able to provide liquidity with up to 4000x capital efficiency relative to Uniswap v2, earning higher returns on their capital. Capital efficiency paves the way for low-slippage trade execution that can surpass both centralized exchanges and stablecoin-focused AMMs. LPs can significantly increase their exposure to preferred assets and reduce their downside risk, and will be able sell one asset for another by adding liquidity to a price range entirely above or below the market price, approximating a fee-earning limit order that executes along a smooth curve.
Below are experts commenting on the upgrade, offering insight as to what this means for new users, whether or not this upgrade is a game changer for the space, and how this could affect the current DeFi wave.
George Harrap, co-founder of Step Finance, the front page of Solana said:
“Uniswap v3 is an evolution of the popular AMM protocol and it will bring with it a host of new opportunities for liquidity providers mainly involving more efficient use of capital. I am excited to see what impact Uniswap V3 will have particularly in the stablecoin swaps space.”
Sam Kazemian, founder and CEO of FRAX, the world’s first fractional-algorithmic stablecoin said:
“The launch of Uniswap V3 is a game changer for the stablecoin space. Its innovative design creates 100x the capital efficiency, making it as efficient, if not more, as Curve Finances’s StableSwap design. It will be very interesting to see which protocol proves to be the home of stablecoin trading.
FRAX will be creating special purpose Uni V3 farming pools that use V3’s innovative range order functionality to create the tightest peg in the stablecoin industry. I think our V3 LP programs will inspire a lot of similar stablecoin projects.”
Hisham Khan, CEO of Cryptocurrencies.AI, CEX-DEX and digital companion for trading strategies said:
“The Uniswap V3 upgrade is the next step in the evolution of AMMs. Liquidity Providers will now be able to better choose where they allocate their liquidity, which will bring greater capital efficiency, while reducing slippage, further benefiting traders on the booming decentralized exchange.
This is an upgrade not just for Uniswap, but for DEX’s in general – we will see the rise of DEX adoption, as other chains like Solana compete with Uniswap in speed and lower tx fees, building new DeFi products at a rapid pace.”
Kadan Stadelmann, CTO of Komodo, a Composable Smart Chain Platform said:
“Uniswap v3 is exciting for the future of DeFi – mainly because it offers an alternative model for liquidity providers. When we look at most AMM-based DEXs that exist today, their liquidity models have basically followed what Uniswap has already established with slight variations. By giving users more control of how capital locked in liquidity pools is used at different price ranges, Uniswap v3 will inevitably lead to a market divergence. The changes look like they will make it more difficult for the average Uniswap liquidity provider but easier for professional market makers. Will other DEXs adopt a similar model to become more like Uniswap v3, or will they choose to stick with their existing models? That’s what a lot of people are wondering at the moment.”
Martin Köppelmann, Co-Founder and CEO At Gnosis, a developer platform building market mechanisms for DeFi said:
“Uniswap v3’s innovation is all about offering users more control of the liquidity they provide. We explored a similar concept to this in our DEX experiments, and we’re happy to have our recently launched CowSwap DEX integrate with the incoming Uniswap v3 liquidity. The Uniswap v3 launch is one of many upgrades innovating the future of decentralised exchanges, and we hope to see the DeFi space continue to put users first and give them more control over their digital assets.”
Blake Ho, COO of Furucombo, a drag and drop DeFi aggregator, said:
“While an exciting development for the DeFi space, it will be interesting to see what Uniswap v3’s user interface updates look like and how they tackle the potential challenge in regards to complexity of the upgrade.”