Uniswap v4 marks a significant milestone in the evolution of decentralized exchanges (DEXs). Since its inception in 2018, Uniswap has transformed from a basic automated market maker (AMM) into a sophisticated platform offering enhanced flexibility, reduced costs, and advanced features for DeFi enthusiasts. This guide delves into the key upgrades, comparisons with prior versions, and practical implications for users in 2025.
Key Takeaways
- Gas Efficiency: Uniswap v4 reduces gas fees by up to 99.99% through a singleton contract (PoolManager) and flash accounting.
- Customization: Introduces hooks for dynamic fees, limit orders, and automated liquidity management.
- Native ETH Support: Eliminates the need to wrap ETH into WETH, simplifying transactions.
- ERC-6909 Standard: Replaces ERC-1155 for more efficient liquidity claims and reduced token transfer costs.
- Backward Compatibility: v2 and v3 remain viable for specific use cases (e.g., deeper liquidity pools).
What Is Uniswap v4?
Uniswap v4 is the latest iteration of the leading DEX, optimized for cost-effectiveness, user control, and scalability. Key differentiators include:
Singleton Contract
- Prior Approach (v3): Each liquidity pool required a separate smart contract, increasing gas costs.
- v4 Innovation: All pools operate under a single PoolManager contract, drastically lowering deployment and interaction fees.
Hooks
Customizable plugins enabling:
- Dynamic fee adjustments based on market volatility.
- Limit orders and automated liquidity strategies.
Example: A hook could auto-compound LP rewards without manual intervention.
Flash Accounting
Minimizes redundant token transfers by netting balances internally, reducing gas usage.
👉 Discover how Uniswap v4 hooks revolutionize DeFi
Uniswap v4 vs. Older Versions
| Feature | v1 (2018) | v2 (2020) | v3 (2021) | v4 (2025) |
|-----------------------|--------------------|--------------------|--------------------|--------------------|
| Gas Efficiency | Low | Moderate | High (multi-contract) | Optimized (singleton) |
| Liquidity | Fixed ranges | Flexible | Concentrated | Dynamic + hooks |
| ETH Handling | WETH required | WETH required | WETH required | Native ETH support |
| Customization | None | None | None | Hooks |
Deep Dive: v4 Features
Dynamic Fees
Pools adjust fees (e.g., 0.05%–1%) in real-time based on market conditions, benefiting both traders and LPs.
Native ETH Support
Trade ETH directly without wrapping, saving time and gas.
ERC-6909 Standard
- Replaces ERC-1155 for efficient liquidity management.
- Benefits: Lower gas fees for LPs and high-frequency traders.
Who Should Switch to v4?
- Traders: Lower fees and native ETH swaps.
- LPs: Enhanced yield strategies via hooks.
- Developers: Build custom AMM logic (e.g., anti-MEV hooks).
FAQ
1. Is Uniswap v4 replacing v3?
No. v3 remains active, and liquidity migrates gradually. Swaps are routed optimally across versions.
2. How does v4 reduce MEV risks?
Hooks allow strategies like randomized trade execution, making front-running less profitable.
3. Are gas fees really lower?
Yes—via singleton contracts and flash accounting.
Uniswap v4 redefines DeFi efficiency but retains backward compatibility, ensuring users can choose the best fit for their needs.