Today is Uniswap Update 3rd…Here’s what to expect!
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Answer Today is Uniswap Update 3rd…Here’s what to expect!
With new products and features increasing weekly in the emerging field of decentralized finance (DeFi), the world’s largest decentralized trading platform cannot survive on its old glories without updating.
Today, Uniswap, which was upgraded to version 2 last May, aims to release version 3 of its protocol today May 5, 2021, which promises to give users more control over the liquidity they provide and more options.
DeFi is a multi-billion dollar industry that is replacing traditional financial institutions, such as banks and brokerages, with algorithms (such as smart contracts) built on top of the blockchain.
Via DeFi, one can take out loans, earn interest on property, swap digital currencies, and bet on the future values of these currencies.
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Ethereum has a total market capitalization of $391 billion.
Of that, more than $77 billion is invested in DeFi protocols based on Ethereum, illustrating how important the sector is.
Uniswap is the most popular decentralized trading platform in the decentralized finance arena.
Uniswap is based on Ethereum and allows people to trade tokens that run on the Ethereum network.
Uniswap itself is an automated market maker (AMM), which means that it relies on algorithms to price cryptocurrencies rather than buy and sell orders.
Those on the platform provide liquidity by locking in the cryptocurrencies they own, others can borrow cryptocurrencies by paying interest to the liquidity providers.
The platform supports ERC20 cryptocurrencies including dollar-pegged stablecoins such as Tether and USDC, as well as governance currencies such as Maker and Aave, which facilitate voting on other protocols.
What can be expected from the third version of the Uniswap platform?
The goal of Uniswap v3 is to make the platform the most flexible and efficient AMM platform ever.
Uniswap highlights three new features.
The first advantage is concentrated liquidity.
Uniswap wrote in a press release in March:
Automated market makers have historically requested all [مزودي السيولة] Share identical strategies and deposit capital across the entire price curve from zero to infinity.
In doing so, they fail to account for individual expectations of future price activity.
The result of focused liquidity is that traders do not have to put a lot of capital on the line to achieve the desired results.
In addition, Uniswap is adding more fee levels so that traders can determine the level of risk when trading volatile assets, which are subject to price change between the time the trade is started and executed.
Read:Decentralized trading platform “1inch” expands towards “Avalanche” and “Gnosis” blockchain
Finally, Uniswap Version 3 is based on an easier and cheaper oracle, which includes that the price is up-to-date and thus reduces the risk of being slipped by bad data.
Meaning that the updates and extra features won’t make much sense for beginners, but according to Uniswap they can lead to higher returns for seasoned decentralized traders.
There is a lot of competition from different sides surrounding the Uniswap decentralized trading platform, so it is likely that the platform will start working on version 4 immediately after version 3 to catch up and stay in the arena and within the competition.
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