Uniswap Releases Uni V4 Code

Tuesday, June 13, 2023

Uniswap Releases Uni V4 Code

Quick Take

  • Uniswap releases draft code for Uni V4.
  • Orbiter Finance introduces its Cross Rollup Protocol.
  • Ethereum researchers analyze the impact of finality incidents.
  • Taiko analyzes the L2 MEV landscape.

Uniswap Releases Uni V4 Code

Uniswap released a whitepaper and draft code for Uni V4, the next iteration of the protocol. Uni v4 introduces hooks, which are contracts that enable the creation of custom liquidity pools. Deployers can add new functionality to pools, including native dynamic fees, onchain limit orders, and time-weighted average market maker (TWAMM) orders.

All v4 pools also live within a single smart contract, coined as a "singleton" contract. The new architecture reduces the gas cost of pool creation by an estimated 99%. Uni v4 also features a "flash accounting" system enabled by transient storage EIP-1153. Flash accounting only transfers net balances between pools. Uniswap is seeking community feedback before Uni v4 is implemented.

Orbiter Cross Rollup Protocol

Oribiter Finance introduced its Cross-Rollup Protocol, an optimistic rollup bridge that uses using zero-knowledge proofs to monitor malicious behavior. Orbiter aims to offer an efficient, low-gas, and OmniRollup-compatible bridge that inherits Ethereum L2 security. Orbiter uses Makers, which earn trading fees for providing destination liquidity.

Users and market makers can prove the legitimacy of a specific transaction by using an efficient and low-cost ZKP coined as the Zero-Knowledge Simple Payment Verification (ZK SPV). Each supported rollup will have its own SPV implementation. Third parties, referred to as dealers, will also be incentivized to deploy front-ends that support the Orbiter Cross-Rollup bridge protocol.

Impact Of Ethereum Finality Incidents

Ethereum researcher Soispoke.eth published findings on how Ethereum's finality incidents impacted the network and user experience. Last month, a Prysm client bug caused nodes to replay outdated attestations, resulting in higher computational load and CPU usage. Soispoke describes the increased load, along with the processing demands of handling deposits, as a "cascading effect."

Soispoke analyzed data from EF nodes located in three different geographical locations. The research showed that the finality incidents significantly impacted the network. This includes up to 21 missed slots per epoch, a 68% drop in the participation rate, and lengthy node recovery times. Transaction inclusion times temporarily increased from 7 seconds to 12 seconds, but there was no corresponding rise in base and priority gas fees during the finality incident.

Mapping The L2 MEV Landscape

Taiko published an outline of the current L2 MEV landscape and the implications of various sequencer designs. Taiko notes that Ethereum’s rollup-centric roadmap will migrate 99% of all activity to L2s, creating opportunities for MEV to be captured at L2. Currently, most rollups capture MEV via a centralized sequencer.

Arbitrum currently adopts a First Come First Served model, limiting its MEV extraction. On the other hand, Optimism does not and can better extract MEV by re-ordering user transactions. Taiko analyzes potential decentralized sequencer designs for more fair MEV extraction, including shared sequencers, outsourced sequencing to other chains, and based rollups.

LI.FI Unveils Cross-Chain Zaps

Cross-chain bridge aggregator LI.FI unveiled cross-chain zaps, a solution for bundling multiple actions in a one-click transaction. Cross-chain zaps allow users to deposit tokens into any contract from any chain, such as bridging from Ethereum to Optimism and making an LP deposit on Velodrome. As part of an integration with Wido, developers can use an SDK to embed cross-chain zaps.

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