- In the beta stage, UniswapX promises crypto users more liquidity, better prices, MEV protection, and gas-free swapping.
- The Uniswap governance token UNI gained about 3 percent in the past day to trade around $6.17 on Tuesday.
The exponential growth of the Ethereum (ETH) network is undeniably contributed by mainstream adoption of its DeFi ecosystem led by leading decentralized exchange (DEX) Uniswap, which has ostensibly processed more than $1.5 trillion in crypto trading volume since its inception. Furthermore, Uniswap DEX supports several chains excluding Ethereum and uses Automated Market Makers to outsource its enhanced liquidity.
Nonetheless, the Uniswap team understands competition in the DEX industry is fast growing amid mainstream cryptocurrency adoption.
Resultantly, the Uniswap team has been looking at how to enhance its ecosystem and remain the top DeFi in the crypto industry. Currently, the Uniswap core developer team is testing several products including V4.
Why UniswapX Matters in Mainstream Cryptocurrency Adoption
According to an announcement by Uniswap, an opt-in beta for the UniswapX protocol on the Uniswap Labs interface is available for Ethereum Mainnet. The project further noted that the new protocol will be expanding to other chains and the Uniswap Wallet in the future.
Notably, the new permissionless, open source (GPL), Dutch auction-based UniswapX protocol is meant to streamline crypto trading across AMMs and other liquidity sources.
Through aggregating liquidity sources, the UniswapX protocol will provide users with improved swapping capabilities through a gas-free contract. Interestingly, the UniswapX protocol will protect users against Maximal Extractable Value (MEV) at the same time not charging the users for failed transactions.
In the near future, UniswapX intends to expand to gas-free cross-chain swaps, which will not only attract new customers but also significantly help existing customers.
2/ UniswapX is next-level aggregation 💪
It outsources the complexity of routing to an open network of fillers who compete to fill swaps at the best prices.
Read the details in our whitepaper:https://t.co/ZfzvLB9bil pic.twitter.com/oljZtRMz1j
— Uniswap Labs 🦄 (@Uniswap) July 17, 2023
The UniswapX protocol intends to closely work with V1, V2, V3, and V4 after its launch to provide seamless swapping of digital assets across different chains. Uniswap noted;
With UniswapX, swappers will be able to use the Uniswap interface without worrying whether they’re getting the best price, and transactions will always be transparently recorded and settled on-chain. All orders are backstopped by the Uniswap Smart Order Router, which forces fillers to compete with Uniswap v1, v2, v3, and, once it launches, v4,
In a bid to ensure safe adoption, the UniswapX contains a protocol fee switch that can only be activated by Uniswap Governance through voting with the UNI token. However, Uniswap Labs does not participate in the process in a bid to ensure enhanced decentralization of the ecosystem.
Market Outlook
The Uniswap ecosystem is among the leading decentralized exchanges with a whopping $3.82 billion in total value locked (TVL). Notably, the Uniswap V3 remains the best-performing version with about $2.6 billion in TVL and a UNI liquidity of about $42 million.
With more protocol developments, the UNI market is expected to exponentially grow in the future crypto bull rallies. Moreover, UNI has a market capitalization of about $4.6 billion and its underlying value has only rallied about 500 percent from its ATL, thus leaving it a lot of room for future bull rallies.
