The report discusses the upcoming Uniswap V4 upgrade, which introduces a slew of new features aimed at improving the protocol’s efficiency and customizability. The new version implements a “singleton” model, managing all pools within a single contract, significantly reducing gas costs. It also introduces the concept of a “hook”, allowing developers to customize liquidity pool behavior based on set triggers. However, the report notes that despite these improvements, there are still limitations, particularly in terms of MEV capture.
- Uniswap V4’s singleton model: This new model reduces the gas costs of deploying a liquidity pool by 99%, making it more efficient.
- Introduction of hooks: Hooks allow developers to customize certain behaviors in liquidity pools, increasing their granularity and expressivity.
- Upgraded fee switch: Pool deployers can now turn on their fee switch, competing with the UNI DAO, and a withdrawal fee for LPs can also be enabled.
- Donate() function: This function allows users and integrators to directly pay in-range liquidity providers, incentivizing certain types of liquidity.
- Increased complexity: The new features make the protocol more complicated, and liquidity providers will likely need to become more sophisticated.