Uniswap

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Revision as of 13:48, 8 November 2023 by Kung (talk | contribs) (Regurgitated some of the concepts on the Uniswap page, and Finematics.)
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How it works?

Overview

Uniswap is an automated liquidity protocol powered by a constant product formula and implemented in a system of non-upgradeable smart contracts on the Ethereum blockchain.[1]

Timeline

Version Evolution

V1 V2 V3
V1 Vyper: ETH20-ETH NA NA
V2 Solidity: ETH20-ETH20 NA
V3 Ethereum and Optimism Concentrated Liquidty, Active Liquidity, Range Limit Orders.
  • Focuses on capital efficiency

Concepts

Liquidity Pools

Swaps

Constant Product Formula

x * y = k

Concentrated Liquidity (CL)

As long as the pairing of ETH and DAI stay within a range ($1500-2500), User Red who invested much less than User Blue ($1200 vs. $10,000) can still earn the same trading fees (see Figure CL).

Figure CL: An example of how Uniswap V3's concentrated liquidity concept works.[2]

Active Liquidity

Range Limit Orders

Questions

  1. How does the relate to DGF?
    1. Can it help with validation pool REP management and redistribution? [Context: Odra Collaboration]
      1. REP and cryptocurrencies are fundamentally different. REP is meant to be a low velocity asset that has non-fungible qualities.

References

  1. Protocol Overview: How Uniswap works. (n.d.). Uniswap. Retrieved November 8, 2023, from https://docs.uniswap.org/contracts/v2/concepts/protocol-overview/how-uniswap-works
  2. UNISWAP V3 - New Era Of AMMs? Architecture Explained. (2021, March 23). Finematics. Retrieved November 8, 2023, from https://finematics.com/uniswap-v3-explained/