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Uniswap V4 Launch Date: DEX Targets Q3 Release Following Ethereum Dencun Upgrade

Last Updated 2 mins ago
James Morales
Last Updated 2 mins ago
By James Morales
Verified by Peter Henn

L Key Takeaways

  • Uniswap has announced that it is targeting the third quarter of 2024 for the release of the Uniswap V4 upgrade.
  • The Uniswap Foundation announced the timeline following the news that Ethereum’s Dencun upgrade will ship in March.
  • Changes introduced by Dencun will enable new features and greater efficiency for Uniswap V4.

Scheduled to occur between March 13 and 16, Ethereum’s Dencun upgrade will enable new smart contract functionality, deploying proto-danksharding for the first time. Many developers are already anticipating how to take advantage of the technology. Among these are the team behind decentralized exchange (DEX) Uniswap (UNI), who plan to release its latest version, Uniswap V4 , after Dencun goes live.

On Thursday, February 15, the Uniswap Foundation announced that the Uniswap V4 launch is set for the third quarter of 2024. When Uniswap V3 dropped in 2021, it catalyzed a major shift in the landscape of decentralized finance (DeFi). Can its post-Dencun heir do the same?

Uniswap V4 to Introduce New Features

With each iteration of the DeFi protocol, Uniswap has increased the customization options available to users.

For example, V3 introduced the concept of concentrated liquidity, which lets liquidity providers deploy capital within a specific price range, helping to reduce the risk of impermanent loss. 

With V4, Uniswap will introduce further customizability thanks to hooks. These are externally deployed contracts that can both adjust and elaborate on the default swap function.

Uniswap Hooks Use Cases

Hook contracts introduced by Uniswap V4 will enable new DeFi functionality. For example, letting decentralized exchanges (DExs) dynamically adjust protocol fees according to market conditions. Fee distribution will also be customizable.

Other possibilities include programmable swap parameters that execute large orders gradually, on-chain limit orders that fill at tick prices and contracts that channel out-of-range liquidity to other platforms.

Many of the potential applications of hook contracts promise to increase profits for liquidity providers (LPs). For example, LPs could program a hook that deploys out-of-range liquidity to interest-bearing lending platforms rather than letting it sit idle. LPs could also use hooks to automatically compound and redeploy fees.

In addition to enhanced customizability, Uniswap V4 will also support native ETH as a tradable asset, letting users swap Ether for ERC-20 tokens directly, without needing to wrap it first.

Lower Fees Pave the Way for Native ETH Trading

While Uniswap’s Ethereum deployment remains its most popular, there is currently no way to trade ETH directly. First, it must be swapped for wrapped ETH (WETH) – an ERC-20 version of Ethereum’s native currency.

By insisting on all ETH being wrapped, Uniswap keeps gas fees lower than they would be if it allowed unwrapped Ether transactions. This is because transferring WETH is usually cheaper than transferring the equivalent ETH.

Post-Dencun, however, Ethereum fees could fall. Uniswap V4 is also expected to take advantage of “transient storage”  introduced by the upgrade to increase the efficiency of its contracts.

Thanks to the lower fee structure, Uniswap V4’s native ETH support could well create a cleaner, more straightforward trading experience. We shall have to wait and see if it can deliver on its promise.

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