Uniswap Wikipedia

We still anticipate ETH pairs being very popular, but expect to see growth in other types of pairs over time. Our team believes security is of the utmost importance — it took hundreds of hours of testing for us to feel comfortable with launching Uniswap v3. Bob’s custom position also acts as a kind of stop-loss for his liquidity. Both Alice and Bob’s liquidity will be entirely denominated in ETH if the price of ETH falls to $0.

1. It is governed by UNI token holders and stewarded by the Uniswap Foundation.
2. Logic related to trader security or ease-of-use must be implemented in external helper contracts.
3. Users and organizations that hold UNI can use it to vote on decisions related to the Protocol.
4. Participate by proposing upgrades and discussing the future of the protocol with the Uniswap community.
5. To open a path to self-sustainability, the code for Uniswap V2 includes a small protocol charge mechanism.
6. Uniswap Governance offers grant funding for people who are building apps, tools, and activities for Uniswap Protocol users, builders, and community members.

Apply for funding from the Uniswap Grants Program

Uniswap v3 offers significant improvements to the TWAP oracle, making it possible to calculate any recent TWAP within the past ~9 days in a single on-chain call. This is achieved by storing an array of cumulative sums instead of just one. V3’s LP customizability opens up a novel order feature to complement market orders, which we are calling “range orders”.

The Uniswap Protocol

LPs can combine any number of distinct concentrated positions within a single pool. For example, an LP in the ETH/DAI pool may choose to allocate $100 to the price ranges $1,000-$2,000 and an additional $50 to the ranges $1,500-$1,750. The Uniswap Protocol is one of crypto’s safest and most secure protocols. The protocol has processed over $1.5 trillion in trading volume over hundreds of millions of transactions without incident. All contracts have been audited by world-class professional security teams. While the core smart contracts are finished, additional work is still in progress.

How Uniswap Works

This type of support boosts network effects from which Uniswap and its users benefit greatly. Incentivized contributions lead to increased protocol functionality and usage. Increased liquidity further entrenches Uniswap, attracting additional users, contributors, and integrations.

What is the Uniswap Protocol? The decentralized exchange built on Ethereum

There is no expectation that it will be turned on in the near future but it opens the possibility for future exploration. Uniswap V2 includes a number of improvements for price feeds built on top of it. First, every pair measures (but does not store) the market price at the beginning of each block, before any trades take place. This price is expensive to manipulate because it was set by the last transaction in a previous block. No party is able to pause the contracts, reverse trade execution, or otherwise change the behavior of the protocol in any way. It is worth noting that Uniswap Governance has the right (but no obligation) to divert a percentage of swap fees on any pool to a specified address.

Explore these guided tutorials to get started integrating with Uniswap in your smart contracts. Learn about the architecture of the Uniswap Protocol smart contracts through guided examples. All code that may be needed for external integrations has been licensed under GPL or MIT , including math libraries, peripheral contracts, interfaces, and the developer sdk. Any wallet, interface, mobile app, protocol, or other project will be able to integrate with v3 as expected. These oracles serve as a critical piece of DeFi infrastructure, and have been integrated into dozens of projects, including Compound and Reflexer. Uniswap v2 introduced a protocol fee switch, which allowed a flat 5 basis point (16.66% of LP fees) fee to be turned on by governance.

A liquidity provider migration portal will be available at launch, allowing v2 LPs to seamlessly transfer their liquidity to the new protocol. V2 oracles work by storing cumulative sums https://cryptolisting.org/ of Uniswap pair prices on a per-second basis. These price sums can be checked once at the beginning of a period and once at the end to calculate an accurate TWAP over that period.

Once you’ve connected your wallet, you can choose which network to swap, like Ethereum, Polygon, Arbitrum, Optimism, or others. In the Classical Period of crypto (2014), Vitalik described decentralized autonomous organizations (DAOs) as “automation at the center, humans at the edges.” Learn about the core concepts of the Uniswap Protocol, Swaps, Pools, Concentrated Liquidity and more. On Friday, what is positive and negative variance March 26 at 2pm ET we will host an AMA on the official Uniswap Discord, where we hope to answer any outstanding questions you may have around Uniswap v3. Major bugs discovered as part of the testing and auditing process were fixed. However, we would like to note that Uniswap v3 is an extremely complex protocol and we cannot guarantee all bugs have already been discovered and resolved.

The Uniswap platform enables users to trade cryptocurrencies without any involvement with a centralized third party. In Uniswap v3, LP’s can concentrate their capital within custom price ranges, providing greater amounts of liquidity at desired prices. In doing so, LPs construct individualized price curves that reflect their own preferences. This feature, including the exact percentage amounts, is hardcoded into the core contracts which remain decentralized and non-upgradable. It can be turned on, and directed by, a decentralized governance process deployed after the Uniswap V2 launch.

At the same time, we think the Uniswap community should be the first to build an ecosystem around the Uniswap v3 Core codebase. In v3, it is theoretically possible for no liquidity to exist in a given price range. However, we expect rational LPs to continuously update their price ranges to cover the current market price. Instead of providing equivalent liquidity depth as a v2 LPs with less capital, v3 LPs can choose to provide greater depth with the same amount of capital as their v2 counterparts. This requires taking on more price risk (“impermanent loss”) while supporting greater amounts of trading and earning higher fees.

However, common shared positions can be made fungible (ERC20) via peripheral contracts or through other partner protocols. Additionally, trading fees are no longer automatically reinvested back into the pool on LPs’ behalf. In May 2020, Uniswap v2 introduced new features and optimizations, setting the stage for exponential growth in AMM adoption. Less than one year since its launch, v2 has facilitated over $135bn in trading volume, ranking as one of the largest cryptocurrency spot exchanges in the world. The second departure from traditional markets is the permissionless and immutable design of the Uniswap protocol. The Uniswap Protocol uses a constant product formula to determine the price of an asset.