With a tentative rollout date set for May 5, 2021, the third iteration of decentralized exchange uniswap is one of the most hype projects in the crypto space. Its newer features offer its users more flexibility to take advantage of profit strategies.
However, Uniswap creator Hayden Adams claims that there is much more to the update. Through his Twitter account, he showed the new DEX equation to calculate efficiency and said:
I don’t think the incredible efficiency of Uniswap v3 has sunk just yet. For the past 3 months (Jan 8 to present), the price of ETH / BTC has ranged between 0.0295 and 0.0454. If you plug into the formula, we find that it is 9.8 times more efficient than v2.
Comparing the second to the soon-to-be-released Uniswap iteration, Adams highlighted other benefits for users, such as the reduction in the amount of capital required to provide liquidity.
Liquidity Providers (LPs) will also be able to participate in a specific range for a trading pair to receive trading rates with the “same amount of non-permanent loss”. Adams added the following example:
the Uniswap v2 WBTC / ETH pair has $ 318 million. If WBTC / ETH LP, instead, were provided in the range of 0.0295 and 0.0454 in v3, they could create the same amount of liquidity and take on the same amount of non-permanent loss with only 318 / 9.8 = $ 32 million.
Uniswap v3 will be 10 times more efficient
In a post title “The Knack to Rule Them All,” Researcher Will Sheehan, ”dig into Uniswap v3. Stating that this update will “change” the dynamics in active and passive LP. Therefore, minimizing and creating a better balance between all users. Adam added:
Efficiency is just a means to an end – the result of concentrated liquidity offers much better execution rates and gives LPs more desirable positions. How much will they improve once v3 is live? These things can be difficult to predict. But I have a good feeling.
UNI is trading at $ 29.62 with gains of 3.4% on the daily chart. During the week, the governance token has gains of 5.6% and losses of 11.5% on the monthly chart. With over $ 15 billion in total market capitalization, UNI managed to break into the top 10, beating Litecoin and Chainlink.
UNI with moderate gains on the 24-hour chart. Source: UNIUSDT Tradingview