Uniswap v4: What's New in the Latest Upgrade

Uniswap v4, launched on January 31, 2025, marks a significant evolution for the decentralized exchange (DEX) protocol, bringing enhanced efficiency, flexibility, and cost-effectiveness to the table. With a legacy of over $2.75 trillion in trading volume across v2 and v3—without a single hack—Uniswap v4 builds on this foundation to deliver its most advanced iteration yet. Here’s a deep dive into what’s new.

1. Hooks: Unleashing Customization

The standout feature of Uniswap v4 is "hooks"—customizable plugins in the form of smart contracts. These allow developers to add tailored logic to liquidity pools, swaps, and fees, opening the door to a wide range of innovations. Examples include on-chain limit orders, dynamic fee adjustments based on market conditions, lending unused liquidity for extra yield, and protections against impermanent loss or MEV (maximum extractable value) attacks like sandwich trades. Hooks make v4 highly adaptable, enabling experimentation without requiring developers to fork the core codebase.

2. Singleton Contract: A Game-Changer for Gas Costs

Unlike previous versions where each trading pair had its own smart contract, Uniswap v4 consolidates all pools into a single contract dubbed the PoolManager. This "singleton" design slashes gas costs dramatically—creating a new pool is now up to 99.99% cheaper, dropping from thousands of dollars to around $50. It also streamlines multi-hop swaps (e.g., ETH → USDC → USDT), boosting overall efficiency and making liquidity provision more accessible.

3. Gas Efficiency: Swaps Made Affordable

Beyond cheaper pool creation, v4 delivers significant gas savings for swappers, particularly on multi-hop trades. Native ETH support further reduces costs for ETH-based pairs by eliminating unnecessary wrapping steps. These optimizations ensure that Uniswap v4 is more affordable for users across transaction sizes, from small retail swaps to large institutional trades.

4. Flash Accounting: Smarter Transaction Handling

Uniswap v4 introduces "flash accounting," a system that optimizes transaction balance management. Instead of updating balances incrementally during a transaction, v4 settles net balances at the end, minimizing gas usage. This technical tweak is a key factor in making the protocol accessible to users with smaller budgets, enhancing its inclusivity.

5. Multi-Chain Deployment: Broader Reach

Uniswap v4 is live on 12 blockchain networks, including Ethereum mainnet, layer-2 solutions like Arbitrum, Base, Optimism, and Polygon, as well as Avalanche, BNB Chain, Blast, World Chain, and Zora Network. This multi-chain expansion enhances scalability and provides users with greater access to liquidity across diverse ecosystems, cementing Uniswap’s role as a cross-chain liquidity hub.

6. Enhanced Liquidity Management

The shift from ERC-1155 to ERC-6909 tokens improves how liquidity positions are tracked and managed. Coupled with the singleton framework, which blends all liquidity into one contract, v4 deepens pools and improves swap pricing. This results in better execution for traders and more efficient use of capital for liquidity providers.

A Milestone in DeFi Evolution

These upgrades position Uniswap v4 as the most customizable and cost-effective version of the protocol to date. Swapping support rolled out shortly after launch, automatically routing trades through v2, v3, v4, and UniswapX liquidity pools for optimal pricing. By March 28, 2025, v4 had already processed over $2.5 billion in all-time volume, with Ethereum, Arbitrum, Base, and BNB Chain leading the charge. As the DeFi landscape continues to evolve, Uniswap v4 sets a new standard for decentralized trading.