One of the most important crypto news of the day concerns the crypto Uniswap (UNI). Indeed, as announced on March 23, it is today (May 5, 2021) that Uniswap releases its v3. Find out why this development represents an important step for the Uniswap project.

What is Uniswap (UNI) crypto used for?

Before discussing v3, it's important to remember what Uniswap is. This crypto was created in November 2018 and operates on the Ethereum blockchain. Uniswap is one of the most important applications of decentralized finance or DeFi. With more than $ 9.8 billion under management, Uniswap ranks in 4th rank of DeFi applications, just behind Compound, Aave and Maker.

Uniswap is a decentralized crypto exchange which allows the exchange of ETH and ERC20 tokens. Unlike traditional crypto trading platforms, Uniswap works thanks to the funds made available by its users. Indeed, the LP or Pool Liquidators are the people who lend cryptos in such a way that Uniswap has sufficient reserves to process the request. They can increase or withdraw their fund at any time. In return, these LPs receive income. Thus, each transaction gives rise to 0.3% of fees which are fully redistributed to the LP according to the capital invested.

Currently, the Uniswap price is around € 36. Its capitalization is over 18.8 billion euros, which ranks UNI as the 9th crypto in the world.

What exactly does Uniswap v3 change?

After v1 in November 2018 then v2 in May 2020, Uniswap welcomes a v3 on May 5, 2021! This update was eagerly awaited by the Uniswap community as it should boost the attractiveness of the project. To put it simply, v3 and its two-tier Optimism update include two main changes.

First of all, transaction fees will decrease compared to v2. But above all, the effectiveness of the Uniswap protocol will increase. Concretely, the v3 will make it possible to jump the profitability of the LP. Uniswap claims a profitability 4,000 times greater! Concretely, LPs will have to invest less cryptos and generate more earnings. At the same time, the associated risks will also be lower.

Concretely, v3 is a winning update for Uniswap users, whether LPs or traders. The implementation of this v3 should positively impact the course of Uniswap. To be continued…


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