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How does the Defi community evaluate Uniswap v3?

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The last major update led by the core team?

After a week of preparation by the Uniswap founders, the Uniswap V3 has finally been revealed.

On March 24, Uniswap announced.V3 documentation, has aroused a wide discussion among practitioners. According to the introduction, the new changes include a "Granular Control" feature that adds aggregated liquidity to the "x*y=k" curve, allowing users to put their money into a range to earn more transaction fees; A multi-tier system of charging different fees for different assets; Provides Range Orders and other functions for traders and LP.

In addition, Uniswap V3 has added the time-weighted average price (TWAP) predictor, as well as changes to the open source license of the code. Read more:What will the new AMM story bring to the Defi market?.

Uniswap V3 has been long awaited by the industry, and many crypto practitioners have weighed in after the release of the document.

The core is to improve capital efficiency

Improving capital efficiency is the key to V3. Uniswap itself is amassing huge assets. According to data, Uniswap alone accounts for 20-25% of total Ethereum trading volume, of which the platform accounted for more than $36 billion in trading volume in February, accounting for 60% of the entire Dex market. So far, Uniswap has reached $25 billion in trading volume in March.

Screenshot: The Block

Uniswap strategy manager Teo Leibowitz, explained that the user input the same amount of money to earn more, or to save money for other choices, the reduced Uniswap slide, adjust, and thus improve the overall trading experience, "from a strategic perspective, this kind of focus on capital efficiency may further consolidate Uniswap dominance in the market."

According to Ethereum independent researcher Hasu, this improvement in Uniswap v3 is "the death blow for Curve." Hayden Adams, Uniswap's founder, disagrees, however, saying that the original idea behind the change was to optimise capital efficiency across all trading partners, and that the possible impact on Curve was a "side effect".

Mindao Yang, founder of DForce, said the feature points of Uniswap V3 were largely expected, "the architecture is more elegant", and its biggest hit is the simultaneous launch of Layer2, which is equivalent to triple optimization in capital efficiency (1000x) + throughput (100x) + cost friction (100x).

In his opinion, the new version of Uniswap is not just for Curve. Ethereum's Sushi, customized PMM (Curve), various AMM forks on the exchange public chain and various Layer2 Swap projects are "all within range" and do not give other projects "time to drink water". However, the disadvantage is not optimized capital pool interest.

He also mentioned that the basic assumption of Uniswap V3 is to ensure maximum ownership and non-licensing, and to make no external assumptions at all, thus forming the system self-consistent. "Everything is to ensure ownership as the premise, and everything else can be trade off."

According to Dodo co-founder Radha Xiong, the whole Uniswap V3 is about improving capital utilization and thus liquidity, and he thinks it's "a shame" that V3 isn't an aggregator, because no matter what new mechanics come up with, it won't match the aggregator in terms of experience.

Thorchain believes that while Uniswap wants to improve capital efficiency, the simple X*Y= K is "really" inefficient. V3 now wants to activate LPs, but this could affect LPs that operate infrequently and allow robots to come back. "The best way to do this is to build a loan market based on a liquidity pool," he says. In addition, it mentions that Sushiswap and the Spartan Protocol are trying similar things.

Software licensing and "copying"

Open source is an important feature of the blockchain world. Uniswap has made changes to the software licensing: the core code is licensed under BSL 1.1, meaning that the Uniswap V3 code will not be used directly for commercial or production applications for two years.

The move is thought to be aimed at some bifurcated projects. However, when the community asked whether Sushiswap would copy the Uniswap V3 code, Sushiswap CTO Joseph DeLong said bluntly, "We don't want it."

It is widely believed that even with Uniswap's regulations, there is no way to completely stop the copying of anonymous projects in the crypto world, but for now, Uniswap has at least confirmed the legality of the code. If any team tries to copy, the team behind Uniswap will respond with legal consequences.

However, while the V3 white paper has clarified the direction of Uniswap's next development to some extent, some people feel that it has not met the psychological expectations. "People are grasping at straws and trying to hype". In fact, "Gas costs, unpredictable losses, robot jump starts, and even the definite time of L2 deployment are still unknown variables."

The anticipation for Uniswap V3 has been going on since the beginning of the year, and the founders have been campaigning for the release of V3 since a week ago. The results show that the market is still looking forward to V3, but the key factor that will determine whether Uniswap will continue to be the leader is the deployment and performance of Layer2.

Longer term, The Block analysts believe that V3 is The last time The Uniswap team will dominateMajor updateAfter this, the team will return control to the community, and all future updates will be made through open community collaboration. Moving from a core team-led approach to a community-driven approach is a new starting point for Uniswap.