Uniswap Labs plans to introduce Hooks in the upcoming Uniswap v4, bringing the world’s leading decentralized exchange into the limelight due to its innovative nature. According to critics on the social media platform X, once Hooks on Uniswap v4 are released, DEXs will go the Know Your Customer (KYC) verification route.
The user shared screenshots, shared insights, and stated that the exchange introduced KYC verification in the latest version. At the same time, the platform plans to use the "permissioned" off-chain server on UniswapX to enhance performance.
UniswapX is an open-source solution that allows open, permissionless trading across automated market makers (AMMs) and other liquidity sources. It is currently being tested on the Ethereum mainnet.
While the community has embraced these developments, critics say that these requirements, especially the authentication requirement for Hooks, will be offered as an option and then gradually become mandatory.
Uniswap v4 is under development, and Hooks will be one of the key updates. Hooks are programmable extensions for customizing pool and transaction behavior, tightly integrated with Uniswap’s core protocol.
With Hooks, developers can more easily implement additional features such as dynamic fees, on-chain limit orders, and over-improved customization. In this way, Uniswap v4 will also have the potential to be integrated into other protocols.
The Evolution of Uniswap: Building “Real” DeFi?
Since the first version was launched at the end of 2018, DEX has continued to evolve and release new features. Uniswap v1 introduced AMM and opened up decentralized finance (DeFi). This makes liquidity providers (LPs) essential for market making.
Uniswap price on October 16 | Source: UNIUSDT on Binance, TradingView
In Uniswap v3, the exchange unlocks Pooled Liquidity (CL). This feature allows LPs to specify the price range they are willing to provide liquidity. In Uniswap v2, LPs provided liquidity across the entire price range of a token pair. In v3, liquidity depth increases while traders receive better pricing.
Despite the criticism, Hooks has received support from some. For example, a user acknowledged that the feature will amplify the value proposition of certain protocols, making them true "DeFi" platforms. Meanwhile, another commentator responded to critics by saying that the feature will contribute more to "real DeFi" than any other. #DeFiChallenge #UniswapV4
