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Uniswap V3 to Launch on May 5 with Increased Capital Efficiency

After many teasers and promotions, Uniswap has finally revealed an overview of V3 of the DEX, set to launch on May 5. The major DEX, Uniswap, admitted that V3 will be the most flexible and capital-efficient automated market maker ever designed. Nevertheless, highly expected scaling solutions to decrease transaction fees will not be involved in the May launch and will come sometime later. V3 will also launch distinctively on the L2 Optimism solution. Moreover, V3 offers concentrated liquidity and various fee tiers. 

As per the announcement, LPs will provide capital with up to 4000x capital efficiency, providing low-slippage trade execution superior to centralized exchanges. The improvement paves the way for low slippage trade execution while conceding yield farmers to expand their appearance to approved assets and decrease their downside risk. Moreover, LPs can trade one asset for another by combining liquidity to a price range entirely above or below the market price. Additionally, it also offers concentrated liquidity by giving individual LPs control over their capital’s price ranges.

Uniswap Transactions on L2 Optimism Deployment will be cheaper

The new updates mainly were concentrated on trade execution and capital efficiency instead of reduced fees. The fees will ideally be decreased and maintained by forthcoming scaling solutions for the Ethereum network. Nevertheless, the Uniswap report conceded that V3 would appear with “slightly” more affordable gas fees along with the other characteristics. However, transactions performed on the L2 Optimism deployment will be “significantly cheaper” as per the Uniswap team. Moreover, Uniswap oracles will also be cheaper and more comfortable to combine.

Furthermore, Uniswap’s UNI token has taken a hit of 8.5% on the announcement day, falling back to $31, as per CoinGecko. Analysts claim that it happened due to lack of scaling in the initial launch of burst the bubble for those who were anticipating prominent gas relief. The V3 developments seem beneficial to big bag holders, losing a lot of liquidity. Experts can see this clearly while witnessing the market sentiment of UNI.

UNI has slipped by 6% across the past two weeks, although it has still gained 520% after the beginning of 2021. In terms of TVL, the DEX is floating around its all-time high of $5.2 billion.

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