Uniswap V4: The Game Changer in DeFi Liquidity
CryptoMondays Philly - Episode 05
If you're even remotely into DeFi, you've probably heard about Uniswap, the OG decentralized exchange (DEX) that lets traders swap tokens without a middleman. But the thing about DeFi is that it's always evolving, and Uniswap is no exception.
On CryptoMondays Philly (CMP) Episode 5, we had Raphael—a software engineer, smart contract developer, and Uniswap ambassador—break down Uniswap V4. And let’s be real, DeFi can be a bit of a brain workout, so having someone spell it out in plain English is a win.
So, grab your coffee, or whatever fuels your crypto deep dives, and let's unpack what’s new in Uniswap V4 and why it’s a game changer.
A Quick Flashback: How We Got Here
To appreciate V4, you need to understand how Uniswap has evolved:
V1 (2018) – The Early Days
Only supported ERC20 to ETH pairs (which was a pain).
Had a flat 0.3% fee on swaps.
Creating new liquidity pools? Had to call a factory contract each time.
V2 (2020) – Bye-Bye Native ETH
Introduced ERC20 to ERC20 pools (no more unnecessary ETH detours).
Liquidity still spread across the entire price curve—not very capital-efficient.
V3 (2021) – Enter Concentrated Liquidity
Allowed liquidity providers (LPs) to set price ranges instead of spreading liquidity everywhere.
More fee tier options, making swaps cheaper in some cases.
Introduced "out of range" liquidity—if the market moves past your range, you stop earning fees.
That brings us to V4, which went live on January 29, 2025. And trust me, it's a big deal.
What’s New in Uniswap V4?
Raphael broke down four key innovations in V4:
1. Singleton Design (One Contract to Rule Them All)
In V1 to V3, every liquidity pool had its own contract, meaning multiple external calls and higher gas fees.
V4 consolidates all pools into one contract (the Pool Manager).
Result? Swaps are faster, simpler, and gas fees drop dramatically (from ~$57 to ~$4 on Ethereum Mainnet).
2. Hooks: The Smart Contract Superpower
If you're into coding, you might know React hooks—this is kinda similar.
Hooks let developers customize what happens before, during, or after a swap or liquidity action.
Want an automatic yield strategy for LPs? Want private swaps like Tornado Cash? Hooks got you.
3. Flash Accounting = More Efficient Swaps
Instead of making multiple transactions (which costs more gas), you can now bundle everything into one call.
Example:
Swap USDC for ETH,
Add it to a liquidity pool,
Withdraw your position...
All in a single transaction.
Result? Less gas, more efficiency, more money saved.
4. ERC-6909: Gas-Efficient Swapping
A new token standard that lets traders keep their assets inside the Uniswap system and make multiple swaps without gas penalties.
Example: If you're an active trader making 100 swaps a day, you can hold ERC-6909 tokens instead of ERC-20 and swap freely with reduced costs.
Why This Matters for Traders & Liquidity Providers
So, what does all this mean for you if you’re trading or providing liquidity?
Lower Gas Fees: Swaps are significantly cheaper.
More Capital Efficiency: LPs can customize their strategies better than ever.
Customization Through Hooks: Expect wild new DeFi applications that weren’t possible before.
More Flexibility for Traders: Gas-efficient trading means more frequent and profitable swaps.
And as Raphael put it, "Hooks can be very malicious if you don’t know what you're doing"—so, as always in DeFi, DYOR (Do Your Own Research).
How to Get Involved
If you’re a developer, Uniswap V4 is like a playground full of opportunities. Here’s how you can start:
Check out the OpenZeppelin library—it provides base hooks to customize your liquidity pools.
Join Uniswap’s 8-week builder program—a hands-on course where you build your own hook and win cash prizes.
Hop into the Uniswap Discord—connect with the community and start tinkering.
Final Thoughts: Uniswap V4 is a DeFi Revolution
Whether you're a trader, a liquidity provider, or a developer, V4 is a massive leap forward. It takes what worked in V3 and amps up efficiency, flexibility, and innovation.
We’re still in the early days of seeing what crazy stuff developers will build using hooks, but one thing’s clear—DeFi just got a lot more powerful.
What do you think about Uniswap V4? Drop your thoughts in the comments!
DISCLAIMER: The views and opinions expressed are those of the authors and do not necessarily reflect the official policy or position of CoinFlask. Do your own research. This is not financial advice