Uniswap an ethereum based most popular decentralized exchange is all set to launch its v3 protocol upgrade tomorrow aims to give users more control over the liquidity they provide and feature more upside for riskier trades.
DeFi is a multi-billion dollar industry that is replacing traditional financial institutions such as banks and brokerage firms with automated codes (i.e. smart contracts) based on blockchain networks. DeFi allows you to get loans, earn interest on stocks, exchange tokens, and bet on future token values. Ethereum has a market cap of $ 391 billion and more than $ 77 billion in crypto is invested in the Ethereum-based DeFi protocol. This shows how important this sector is to blockchain growth (and perhaps its price).
Uniswap is the most popular decentralized switch based on Ethereum (DEX) which allows users to exchange tokens sent over the Ethereum network. Uniswap itself is an automation market maker (AMM) that relies on an algorithm to determine asset prices rather than buy and sell orders. Those on the platform provide liquidity by blocking the tokens they hold. others can borrow tokens and pay interest to liquidity providers.
ERC20 tokens on exchanges include stable dollar coins such as Tether and USDC, as well as management tokens such as Maker and Aave, which make it easier to reconcile other protocols.
In the past 24 hours, Unsiwap reported trading volume of nearly $ 1.9 billion, according to CoinMarketCap. While it is nowhere near the centralized spot exchanges of Binance or Huobi, which generate $ 68.8 billion and $ 20.7 billion, respectively, it could turn it into a “critical infrastructure for decentralized funding,” such as Uniswap in one Wrote blog post on December. 23 March.
The goal of Uniswap v3 is to make it “the most flexible and efficient AMM ever created”.
DEX highlights three new features.
The first is concentrated liquidity. “Auto market makers have historically required all [liquidity providers] to share identical strategies and deposit capital along the price curve from 0 to infinity,” Uniswap wrote in a March press release. “That way, they haven’t taken into account individual expectations for future price activity.” The result of concentrated liquidity is that traders do not need to invest a lot of capital to get results.