📝 Hi, I'm 10, this is#区块链发展史 Popular science series, this issue’s content: UNI’s AMM (automatic market maker) model, and other DEX core technologies!
Each launch of UNI from v1 to v3 has led to tremendous changes and updates in DEX. Its AMM model is undoubtedly the most advanced. Without UNI’s innovation, there would be no development and growth of DEX!
Pre-viewing reminder: The content of 10 is progressive, and the prerequisite knowledge is in the history post. If you have any questions, you can read it yourself! 🌤️
If you are a player in the primary market, you must have experienced the on-chain currency exchange, and almost all the decentralized exchanges you use are based on UNI technology. They will also update their versions after the copyright of UNI expires, such as Cake, Sushi, Quick, etc.!
1. Brief description of each version:
-- Uniswap v1: Launched in November 2018. Introduced the Constant Product Market Maker (CPMM) model, which allows anyone to provide tokens in a specific trading pair and collect fees from users in the trading pool. Uniswap v1 only supports direct exchange between ERC-20 tokens and ETH (ETH). If you want to exchange two ERC-20 tokens, you need to do it in two steps. Uniswap v1 has some limitations, such as inefficient pricing algorithm and high slippage for large transactions.
-- Uniswap v2: Launched in May 2020. It makes some improvements over the previous version, such as allowing direct swaps between any two ERC-20 tokens without the need for ETH as an intermediary. It also adds some new features, such as providing reliable on-chain price data, allowing users to borrow tokens without providing collateral, and collecting a portion of the fees for future development. Uniswap v2 also has some disadvantages, such as the dispersion of liquidity between different pools and rates, and high gas fees due to complex contract logic.
-- Uniswap v3: Launched in May 2021. It introduced a disruptive new feature: pooled liquidity, allowing liquidity providers (LPs) to specify custom price ranges for their deposits, thereby improving capital efficiency and reducing slippage. Uniswap v3 also introduced multiple fee tiers, more flexible pool creation, more advanced oracles, and non-fungible liquidity positions. Uniswap v3 faces some challenges, such as increased complexity for LPs, higher gas fees for exchangers, and lack of composability with other protocols.
-- Uniswap v4: Announced in June 2023, it is still under development and has not yet been officially launched. Uniswap v4 proposes some major new features, such as allowing users to customize their pools more, making cross-pool liquidity more efficient, and restoring the option to trade directly with ETH. Uniswap v4 is expected to bring many benefits, such as greater customization, better efficiency, lower gas fees, and more advanced trading strategies. Uniswap v4 also has some potential limitations, such as Uniswap can charge a portion of withdrawal fees, and its license restricts the use of its source code.
v4 has already shocked the industry when its content details were disclosed. I believe that after its official launch, it will trigger a new round of DEX makeover craze!
2. Tail:
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