Uniswap V3 Coming in May & Low Fees a Week Later, New Licensing Requirements Introduced
UNI price rejoiced on the “surreal moment” but soon realized the launch is still more than a month away. But the market remains excited about what’s to come.
UNI price surged to a new all-time high to about $35.88 in a strong move as Uniswap announced the launch of V3.
The market has long been anticipating this launch which creator Hayden Adams continued to tease the community about for a long time.
“A surreal moment, I can't believe it's finally ready,” tweeted Adams.
Wouldn't be surprised if the launch of Uniswap v3 becomes a re-rating catalyst for DeFi.
— Arthur (@Arthur_0x) March 23, 2021
However, soon, in an even bigger move, the UNI prices dropped to $29.79 as people realized it’s not coming for more than a month.
As of writing, the $16.4 billion market cap cryptocurrency trades at $31.20.
Launched in November 2018 and V2 introduced in May 2020, Uniswap’s V3 will be coming on May 5th.
With this launch, the automated market maker (AMM), which is currently facilitating over $1 billion in trading volume daily, is targeting the L1 mainnet launch.
However, if you were waiting for relief from extremely high fees, it won’t be addressed this time but “shortly after” through L2 deployment on Optimism, set a week later on May 12.
“Even with these groundbreaking design improvements, the gas cost of v3 swaps on Ethereum mainnet is slightly cheaper than v2. Transactions made on the Optimism deployment will likely be significantly cheaper!” says the team.
Uniswap: building with the next 3-5 years in mind. Prioritizing flexibility, scalability. Grow users first, monetize later. Token not needed yet
Sushiswap: building for market now. Prioritizing degen features. Reward token holders now to bootstrap community
— Jason Choi (@mrjasonchoi) March 24, 2021
Uniswap V3 introduces concentrated liquidity that gives individual LPs control over their capital allocation price ranges and multiple fee tiers allowing LPs to be appropriately compensated for taking on varying degrees of risk.
“These features make Uniswap v3 the most flexible and efficient AMM ever designed,” notes the team.
More importantly, LPs can provide liquidity with up to 4000x capital efficiency, earning higher returns on their capital, allowing for low-slippage trade execution.
“Biggest takeaway beyond capital efficiency improvements is the customizability V3 brings. Vastly expands the AMM design space and enables a far more robust ecosystem to grow around Uniswap. Difference between a simple application and flexible infrastructure,” said Ryan Watkins, a researcher at Messari.
As many have pointed out, V3 is more similar to a CLOB than V2. I’ve long maintained the view that CLOB is the end game. It gives market-makers more flexibility.
— Qiao Wang (@QwQiao) March 24, 2021
V3 oracles, meanwhile, are capable of providing time-weighted average prices (TWAPs) on-demand removing the need for integrators for historical values.
Uniswap’s latest version will be further launched under the Business Source License 1.1, limiting the use of the V3 source code in a commercial or production setting for up to two years.
“We strongly believe decentralized financial infrastructure should ultimately be free, open-source software. At the same time, we think the Uniswap community should be the first to build an ecosystem around the Uniswap v3 Core codebase,” reads the announcement.
Many are calling this Uniswap V3 a “masterwork,” with Will Warren, co-founder 0x project, congratulating the Uniswap team on shipping v3, saying, “A diversity of liquidity provision strategies is healthy for DEX markets and grows the pie.”