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Podcast summary created with Snipd AI
Quick takeaways
- Uniswap V3 aims to provide the best trading experience and become the go-to platform for all kinds of assets.
- Uniswap V3 brings significant gas fee reductions, making it more efficient and cost-effective for traders and liquidity providers.
- Hooks in Uniswap V3 open up a new design space, allowing for the creation of innovative features that enhance functionality and liquidity provision strategies.
- Uniswap is exploring cross-chain trading to expand beyond Ethereum, which would facilitate interoperability and improve the trading experience for users and market makers.
Deep dives
Uniswap's Transition to a DEX
Uniswap is seen as a decentralized exchange (DEX) and the best implementation of a DEX for the entire on-chain trading environment. With Uniswap V3, it has transitioned closer to a central limit order book (CLOB) than before. This reflects the aim to provide the best trading experience for every asset, and the goal is for Uniswap to be the go-to platform for all kinds of assets.
The Importance of Gas Fee Reduction
Uniswap V3 brings significant gas fee reduction benefits, making it more efficient and cost-effective for traders and liquidity providers. Contract deployment fees are expected to be around 99% cheaper, and swapping costs will also decrease, although exact figures are not yet available. These improvements address some of the challenges posed by higher gas costs and help ensure Uniswap remains competitive in the evolving DeFi space.
The Potential of Hooks in Uniswap V3
The introduction of hooks in Uniswap V3 opens up a new design space that allows developers and designers to extend the AMM logic and launch their own pools with customized additional features. This enables the creation of innovative hooks that enhance Uniswap's functionality and liquidity provision strategies. While safety and proper evaluation of these hooks are essential, they have the potential to improve market makers' efficiency, reduce fragmentation, and offer traders more options.
Exploring Cross-Chain Trading and Intent-Based Architecture
Uniswap is looking into embracing cross-chain trading and expanding its capabilities beyond the Ethereum blockchain. Concepts like intent-based architecture and signed orders are being explored to enable users to trade on various chains and liquidity providers to fill orders across different platforms. This would create more complex market structures, facilitate interoperability, and enhance the overall trading experience for users and market makers.
Uniswap X and Toxic Flow
Uniswap X is directly competitive to other aggregators like CowSwap and OneInch, as it enables takers to sign transactions and fillers (market makers) to take the other side off-chain. This leads to the most toxic flow settling on-chain, potentially hurting Uniswap LPs even more.
Hooks and Market Makers
Hooks in Uniswap V4 can provide market makers with more flexibility, enabling them to withdraw liquidity at the right time. This addresses the issue of toxic flow and impermanent loss faced by LPs in previous versions.
Cross-Chain Trading and MEV
Cross-chain trading on Uniswap X may capture MEV as sophisticated fillers source liquidity from exchanges. However, spreads and liquidity on traditional exchanges may still be more favorable for retail traders.
Imran and Qiao bring on Dan Robinson (Paradigm) and Evgeny Gaevoy (Wintermute) to discuss how UniSwapX and UniSwapV4 will impact DeFi.
No BS crypto insight for founders.
Timestamps:
(00:00) Intro
(01:00) Welcome to Good Game
(14:13) High-level points that UniswapV4 enables
(23:44) Does Uniswap automatically play the liquidity aggregator role?
(28:19) Does the current vision of UniswapV4 sound like something that makes you want to provide liquidity more?
(29:06) McAMM - Loss vs. Rebalancing
(31:13) Early estimate of how much lower the fees will be for contract deployment and swapping
(34:13) The current cost of contract deployment on UniswapV3
(40:55) Any other interesting DEXs outside of UniSwap?
(49:02) What is Uniswap going to look like a few years from now?
(44:58) Qiao: Do you ever see Uniswap become an order book many years from now?
(47:20) New designs that Evgeny wants to see in the DEX space
(50:42) Uniswap launched UniSwapX
(56:24) How does a messaging protocol work?
(57:39) MEV protection and no cost for failed transactions
(01:10:02) Hooks - is it like an app store?
(01:11:57) Qiao: Is there anything else in DeFi you guys are excited about?
(01:17:01) Summary
Dan Robinson Twitter: https://twitter.com/danrobinson
Evgeny Gaevoy Twitter: https://twitter.com/EvgenyGaevoy
Spotify: https://spoti.fi/3N675w3
Apple Podcast: https://apple.co/3snLsxU
Website: https://goodgamepod.xyz
Twitter: https://twitter.com/goodgamepodxyz
DISCLAIMER: The views expressed herein are personal to the speaker(s) and do not necessarily reflect the views of any other person or entity. Discussions and answers to questions are intended as generalized, non-personalized information. Nothing herein should be construed or relied upon as investment, legal, tax, or other advice.
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