Uniswap V4 DeFi Protocol Launches on Ethereum and Beyond—Here’s What's New

Ethereum decentralized exchange Uniswap launched its V4 platform Friday, building upon previous versions by making liquidity pools cheaper and unlocking new development opportunities for builders in the industry.

Built via development contributions of more than 100 community members, the latest version of Uniswap—described by the Uniswap Foundation as “a key milestone in the evolution of DeFi”—is now live on 12 chains, including Ethereum mainnet and layer-2 networks like Arbitrum and Base, plus the likes of Avalanche and BNB Chain too.

Alongside a 99.99% reduction in costs for liquidity pools, Uniswap V4 grants developers and protocols new opportunities thanks to the introduction of hooks, or modular plugins that allow developers to customize pools, swaps, fees, and pool positions.

For example, a dynamic fee hook could enable automatic fee adjustments based on market conditions, while an auto-rebalancing hook would allow for consistent rebalancing and optimization of a liquidity position.

More than 150 hooks have been developed thus far as a part of grants and programs hosted by the Uniswap Foundation. The Foundation said that such upgrades provide strong benefits and open up opportunities to reach multiple demographics in crypto. 

“For chains, V4 offers a pathway to supercharge the growth of their DeFi ecosystems and support their developer communities. For protocol teams, V4 enables a way to improve user experience, and to differentiate themselves. And for developers, V4 provides a platform to build powerful new DeFi applications,” the Foundation wrote.

The latest version is now accessible for liquidity providers, with V4 token swaps rolling out in the coming days. 

Uniswap’s V2 and V3 have facilitated more than $2.75 trillion in swaps to date. In building V4, the protocol hosted a $15.5 million bug bounty and held nine separate security audits to avoid any potential issues with the new version.

In October 2024, Uniswap Labs unveiled plans to build its own layer-2 network, Unichain. The protocol’s native governance token UNI is down 1% in the last 24 hours to $12.

Edited by Andrew Hayward