Uniswap V4 has custom liquidity pool plugins in its code draft.

  • Uniswap is currently the largest decentralized cryptocurrency exchange in the world, in terms of volume.
  • The release of Uniswap V4 is the first step towards launching the new version of Uniswap.
  • The final stage before launch involves a vote by UniswapDAO.

Uniswap Labs has released a draft of the code for Uniswap V4. The updated code features “hooks” or “plugins” that allow programmers to design customized liquidity pools.

The most recent version of Uniswap, Uniswap V3, was released in May 2021 and was recently deployed on the Boba Network.

Uniswap V4 draft code

According to a post published today by Uniswap’s founder, Hayden Adams, the “hooks” feature in the V4 will enable developers to add many new innovations to the exchange, including on-chain limit orders, automatic deposits to lending protocols, automatically compounded liquidity provider fees, and more.

Adams states that the purpose of Uniswap V4 is to:

“Create a way for pool deployers to introduce code that performs a designated action at key points throughout the pool’s lifecycle – like before or after a swap, or before or after an LP position is changed.”

Deployers will be able to create time-weighted average market makers (TWAMMs), which allow users to sell large amounts of cryptocurrency gradually in smaller batches. This can help traders avoid negative price changes or being front-run by EVM bots. Additionally, on-chain limit orders will be possible because pools will be able to implement logic that will only fill an order when a token reaches a specific price.

Another example of the featured “hooks” is code that allows for the repositioning of fees back into an LP’s pool or lending out inventory when a particular pool isn’t being used.

Steps to launching the new Uniswap V4

Releasing the source code is the first step in launching a new version of Uniswap.

The group now intends to consult with Uniswap users and iterate on this foundational code over time. Once enough agreement has been reached on a final version, V4 will become a formal proposal to be presented to Uniswap’s governing body, UniswapDAO.

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