_TL;DR:

• Uniswap V4 is the upcoming iteration of the popular decentralized exchange.

• It introduces a feature named hooks that will increase pool customization, enabling dynamic swap fees and support for complex trading orders.

• It also features what they call The Singleton, a consolidated contract, improves gas efficiency and reduces deployment costs.

• Participants in the DeFi ecosystem should benefit from the enhanced flexibility and cost savings that Uniswap V4 is anticipated to offer.

• For investors, this update helps strengthen the investment thesis for Uniswap’s token UNI and supports the growing interest in DeFi solutions.   

 

Uniswap, the leading decentralized exchange (DEX) in the DeFi ecosystem, is gearing up for its upcoming iteration, Uniswap V4. Following the success of Uniswap V3, which introduced the innovative "concentrated liquidity" feature, Uniswap aims to further enhance its capabilities and maintain its position as the largest DEX in the DeFi space. The upcoming update promises to introduce innovative features that enhance customization, improve gas efficiency, and revolutionize trading capabilities within the decentralized finance (DeFi) ecosystem. In this article, we will delve into the key features of Uniswap V4, including hooks for advanced pool customization and the introduction of The Singleton for enhanced efficiency. We will explore how these updates are set to position Uniswap as a frontrunner in the rapidly evolving DeFi landscape.

 

_{What are the main features of V4?}

 

Introducing Hooks: Unleashing Customization Potential 

 

Uniswap V4 introduces hooks, a game-changing feature that offers a higher degree of customization compared to its predecessors. With hooks, liquidity pools can have dynamic swap fees that adapt to market conditions, paving the way for more efficient and flexible trading experiences. Traders will also have the ability to execute complex orders such as limit orders and TWAP (Time-Weighted Average Price) orders, enabling greater control over their transactions. Furthermore, the introduction of hooks empowers users to leverage Uniswap liquidity in unique ways, fostering innovation and enabling the development of customized solutions without requiring permission. 

 

The Singleton: Streamlining Efficiency and Reducing Costs 

 

One of the standout updates in Uniswap V4 is the implementation of The Singleton, a single contract that consolidates all pools within the protocol. This significant architectural change brings several benefits, including improved gas efficiency and reduced deployment costs. Complex swaps will now be routed through a single contract, eliminating the gas-intensive nature of multiple contracts. Moreover, the Singleton incorporates a "flash accounting"  system, optimizing gas costs by transferring the net token balance upon completion of a swap. These enhancements not only enhance user experience but also contribute to overall network scalability and cost-effectiveness, with the use of this new feature potentially the cost of deploying new pools in Uniswap by as much as 99%.

 

_{Why it matters to investors}

 

Uniswap V4 represents a significant milestone in the evolution of decentralized exchanges, and the upgrade is expected to solidify the protocol’s position as the largest decentralized exchange by trading volumes. The introduction of hooks improves capital efficiency and customization while reducing gas usage, which may attract more order flow from DEX aggregators. Additionally, the inclusion of TWAPs and limit orders makes Uniswap more competitive with centralized exchanges, appealing to sophisticated traders. 

Regulatory pressures on centralized exchanges and the shift towards on-chain trading create favorable conditions for Uniswap to challenge its competitors. The latest upgrade has the potential to push the DEX/CEX volume ratio to new heights. Still, it is important to note that the release of Uniswap V4 is not imminent, as the code is still undergoing finalization and auditing. As the release date approaches, the DeFi community eagerly anticipates the profound impact that Uniswap V4 will have in pushing the boundaries of decentralized finance and solidifying Uniswap's position as a leader in the industry.

 

_{^[2]Trading strategy used to execute a large-volume order by breaking it into equal parts across a set period in order to minimize slippage.}

_{^[3] Instead of transferring assets in and out of pools at the end of every swap like in v3, this system transfers only on net balances, optimzing costs related to gas-fees.} 

 

__________________________________________

_{This material expresses Hashdex Asset Management Ltd. and its subsidiaries and affiliates (“Hashdex”)'s opinion for informational purposes only and does not consider the investment objectives, financial situation or individual needs of one or a particular group of investors. We recommend consulting specialized professionals for investment decisions. Investors are advised to carefully read the prospectus or regulations before investing their funds. The information and conclusions contained in this material may be changed at any time, without prior notice. Nothing contained herein constitutes an offer, solicitation or recommendation regarding any investment management product or service. This information is not directed at or intended for distribution to or use by any person or entity located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Hashdex to any registration or licensing requirements within such jurisdiction. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of Hashdex. By receiving or reviewing this material, you agree that this material is confidential intellectual property of Hashdex and that you will not directly or indirectly copy, modify, recast, publish or redistribute this material and the information therein, in whole or in part, or otherwise make any commercial use of this material without Hashdex’s prior written consent.} 

_{Investment in any investment vehicle and cryptoassets is highly speculative and is not intended as a complete investment program. It is designed only for sophisticated persons who can bear the economic risk of the loss of their entire investment and who have limited need for liquidity in their investment. There can be no assurance that the investment vehicles will achieve its investment objective or return any capital. No guarantee or representation is made that Hashdex’s investment strategy, including, without limitation, its business and investment objectives, diversification strategies or risk monitoring goals, will be successful, and investment results may vary substantially over time. Nothing herein is intended to imply that the Hashdex s investment methodology or that investing any of the protocols or tokens listed in the Information may be considered “conservative,” “safe,” “risk free,” or “risk averse.”}

_{Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Hashdex, and Hashdex does not assume responsibility for the accuracy of such information. Hashdex does not provide tax, accounting or legal advice. Certain information contained herein constitutes forward-looking statements, which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue”  “believe” (or the negatives thereof) or other variations thereof. Due to various risks and uncertainties, including those discussed above, actual events or results, the ultimate business or activities of Hashdex and its investment vehicles or the actual performance of Hashdex, its investment vehicles, or digital tokens may differ materially from those reflected or contemplated in such forward-looking statements. As a result, investors should not rely on such forward- looking statements in making their investment decisions. None of the information contained herein has been filed with the U.S. Securities and Exchange Commission or any other governmental or self-regulatory authority. No governmental authority has opined on the merits of Hashdex’s investment vehicles or the adequacy of the information contained herein.}

_{Nasdaq®, Nasdaq Crypto IndexTM, NCITM, Nasdaq Crypto Index EuropeTM, NCIETM are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Hashdex Asset Management Ltd. The Hashdex Nasdaq Crypto Index Europe ETP (the Product) have not been passed on by the Corporations as to their legality or suitability. The Product is not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT.}