Uniswap has been the backbone of decentralized trading, replacing traditional order books with Automated Market Makers (AMMs). At the heart of this model are liquidity pools, where users supply tokens and earn fees in return. With each upgrade, Uniswap has aimed to improve efficiency, reduce costs, and create a better user experience.
Now, with Uniswap v4, the protocol introduces a leap forward with:
Singleton Architecture — consolidating all pools into a single contract to cut costs and reduce fragmentation.
Customizable Hooks — allowing developers to build unique pool behaviors, from dynamic fees to on-chain strategies.
Flash Accounting — settling balances only once per transaction for massive gas savings.
Native ETH Support — streamlining ETH trading without wrappers.
These innovations mark a turning point in how decentralized exchanges (DEXs) can scale and evolve.
From v1 to v4: The Evolution
Uniswap v1 (2018): Introduced the AMM model, enabling ETH ↔ ERC20 swaps but requiring ETH as a bridge for ERC20 ↔ ERC20 trades.
Uniswap v2 (2020): Added ERC20 pools, flash swaps, and price oracles, but still lacked capital efficiency.
Uniswap v3 (2021): Brought concentrated liquidity, letting LPs define price ranges, improving efficiency but increasing complexity.
Uniswap v4 (2025): Introduces singleton contracts, hooks, and flash accounting, further boosting efficiency and flexibility.
Impermanent Loss (IL) in Brief
Liquidity providers risk impermanent loss when token prices move differently than if they had just held them. For example, providing ETH + USDC to a pool may yield fewer profits than simply holding both if ETH’s price doubles. LPs accept this trade-off because trading fees often offset IL.
Uniswap v4 doesn’t eliminate IL entirely but provides new tools through hooks that could help reduce its impact in the future.
Liquidity in v4
In v4, liquidity is managed by a singleton PoolManager. Unlike earlier versions where each pool had a separate contract, all pools now live under one roof. This structure makes liquidity management more efficient, reduces gas costs, and enables extensible behaviors through hooks.
Hooks: The Game-Changer
Hooks are perhaps the biggest innovation in Uniswap v4. They let developers customize pool behavior at critical points (before/after swaps, liquidity changes, etc.). Some applications include:
Dynamic fee adjustments
On-chain limit orders
Auto-compounding yields
MEV protection
This flexibility turns Uniswap into a developer platform for building new financial primitives, far beyond standard AMM models.
Uniswap v4 introduces powerful upgrades, singleton architecture, hooks, flash accounting, and ETH-native support that make DeFi trading more efficient and customizable than ever. At QuillAudits, we recognize how innovations like these raise the bar for decentralized exchanges while also demanding rigorous smart contract security audits to ensure reliability, cost savings, and developer flexibility.
What is Uniswap v4? A Short Technical Breakdown was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this storyUniswap has been the backbone of decentralized trading, replacing traditional order books with Automated Market Makers (AMMs). At the heart of this model are liquidity pools, where users supply tokens and earn fees in return. With each upgrade, Uniswap has aimed to improve efficiency, reduce costs, and create a better user experience.
Now, with Uniswap v4, the protocol introduces a leap forward with:
Singleton Architecture — consolidating all pools into a single contract to cut costs and reduce fragmentation.
Customizable Hooks — allowing developers to build unique pool behaviors, from dynamic fees to on-chain strategies.
Flash Accounting — settling balances only once per transaction for massive gas savings.
Native ETH Support — streamlining ETH trading without wrappers.
These innovations mark a turning point in how decentralized exchanges (DEXs) can scale and evolve.
From v1 to v4: The Evolution
Uniswap v1 (2018): Introduced the AMM model, enabling ETH ↔ ERC20 swaps but requiring ETH as a bridge for ERC20 ↔ ERC20 trades.
Uniswap v2 (2020): Added ERC20 pools, flash swaps, and price oracles, but still lacked capital efficiency.
Uniswap v3 (2021): Brought concentrated liquidity, letting LPs define price ranges, improving efficiency but increasing complexity.
Uniswap v4 (2025): Introduces singleton contracts, hooks, and flash accounting, further boosting efficiency and flexibility.
Impermanent Loss (IL) in Brief
Liquidity providers risk impermanent loss when token prices move differently than if they had just held them. For example, providing ETH + USDC to a pool may yield fewer profits than simply holding both if ETH’s price doubles. LPs accept this trade-off because trading fees often offset IL.
Uniswap v4 doesn’t eliminate IL entirely but provides new tools through hooks that could help reduce its impact in the future.
Liquidity in v4
In v4, liquidity is managed by a singleton PoolManager. Unlike earlier versions where each pool had a separate contract, all pools now live under one roof. This structure makes liquidity management more efficient, reduces gas costs, and enables extensible behaviors through hooks.
Hooks: The Game-Changer
Hooks are perhaps the biggest innovation in Uniswap v4. They let developers customize pool behavior at critical points (before/after swaps, liquidity changes, etc.). Some applications include:
Dynamic fee adjustments
On-chain limit orders
Auto-compounding yields
MEV protection
This flexibility turns Uniswap into a developer platform for building new financial primitives, far beyond standard AMM models.
Uniswap v4 introduces powerful upgrades, singleton architecture, hooks, flash accounting, and ETH-native support that make DeFi trading more efficient and customizable than ever. At QuillAudits, we recognize how innovations like these raise the bar for decentralized exchanges while also demanding rigorous smart contract security audits to ensure reliability, cost savings, and developer flexibility.
What is Uniswap v4? A Short Technical Breakdown was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story
What is Uniswap v4? A Short Technical Breakdown
3 min read
Uniswap has been the backbone of decentralized trading, replacing traditional order books with Automated Market Makers (AMMs). At the heart of this model are liquidity pools, where users supply tokens and earn fees in return. With each upgrade, Uniswap has aimed to improve efficiency, reduce costs, and create a better user experience.
Now, with Uniswap v4, the protocol introduces a leap forward with:
- Singleton Architecture — consolidating all pools into a single contract to cut costs and reduce fragmentation.
- Customizable Hooks — allowing developers to build unique pool behaviors, from dynamic fees to on-chain strategies.
- Flash Accounting — settling balances only once per transaction for massive gas savings.
- Native ETH Support — streamlining ETH trading without wrappers.
These innovations mark a turning point in how decentralized exchanges (DEXs) can scale and evolve.
From v1 to v4: The Evolution
- Uniswap v1 (2018): Introduced the AMM model, enabling ETH ↔ ERC20 swaps but requiring ETH as a bridge for ERC20 ↔ ERC20 trades.
- Uniswap v2 (2020): Added ERC20 pools, flash swaps, and price oracles, but still lacked capital efficiency.
- Uniswap v3 (2021): Brought concentrated liquidity, letting LPs define price ranges, improving efficiency but increasing complexity.
- Uniswap v4 (2025): Introduces singleton contracts, hooks, and flash accounting, further boosting efficiency and flexibility.
Impermanent Loss (IL) in Brief
Liquidity providers risk impermanent loss when token prices move differently than if they had just held them. For example, providing ETH + USDC to a pool may yield fewer profits than simply holding both if ETH’s price doubles. LPs accept this trade-off because trading fees often offset IL.
Uniswap v4 doesn’t eliminate IL entirely but provides new tools through hooks that could help reduce its impact in the future.
Liquidity in v4
In v4, liquidity is managed by a singleton PoolManager. Unlike earlier versions where each pool had a separate contract, all pools now live under one roof. This structure makes liquidity management more efficient, reduces gas costs, and enables extensible behaviors through hooks.
Hooks: The Game-Changer
Hooks are perhaps the biggest innovation in Uniswap v4. They let developers customize pool behavior at critical points (before/after swaps, liquidity changes, etc.). Some applications include:
- Dynamic fee adjustments
- On-chain limit orders
- Auto-compounding yields
- MEV protection
This flexibility turns Uniswap into a developer platform for building new financial primitives, far beyond standard AMM models.
Uniswap v4 introduces powerful upgrades, singleton architecture, hooks, flash accounting, and ETH-native support that make DeFi trading more efficient and customizable than ever. At QuillAudits, we recognize how innovations like these raise the bar for decentralized exchanges while also demanding rigorous smart contract security audits to ensure reliability, cost savings, and developer flexibility.
What is Uniswap v4? A Short Technical Breakdown was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.
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