Can Uniswap lure in more users with its latest upgrade

  • Uniswap plans to launch V4 in Q3 2024.
  • Despite growth, concerns arise over MEV bots and arbitrage transactions.

The Uniswap Foundation has revealed its tentative plan to launch Uniswap [UNI] v4 in Q3 of 2024.

New developments

The project is currently progressing through its initial phase, encompassing core code completion, testing, gas optimization, security enhancements, and the finalization of peripheral components.

Moving forward, the second phase will involve conducting extensive audits, including both comprehensive professional audits and engaging the community in audit competitions.

Source: X

Uniswap continued to see a surge in activity over the last few months. During this period, the number of daily active users on the network grew by 26.2%.

Moreover, the fees generated by the protocol increased by 83% during this period. The increased fees not only bolstered the platform’s revenue but also provided additional resources for ongoing development.

Screenshot 2024 02 16 at 5.00.49 PM

Source: token terminal

Some problems ahead

However, the sentiment around Uniswap could be impacted by the growing number of MEV bots and ARB transactions.

For context, MEV stands for Miner Extractable Value, and it refers to the profit that miners can extract by reordering and including transactions in a block in a way that benefits them.

MEV bots are automated systems or algorithms that actively seek to exploit opportunities within the transaction order and execution process to maximize profits for miners.

Arbitrage transactions, on the other hand, involve taking advantage of price differences for the same asset on different platforms or markets.

In the context of decentralized exchanges like Uniswap, arbitrage transactions can occur when there are price discrepancies between Uniswap and other trading platforms.

Traders use automated tools or bots to quickly exploit these price differences, buying the asset where it’s cheaper and selling where it’s more expensive, thereby making a profit.

Realistic or not, here’s UNI’s market cap in BTC terms

The growing presence of MEV bots and arbitrage transactions can impact the sentiment around Uniswap because they introduce an element of complexity and potential manipulation into the trading environment.

Traders may need to contend with increased competition, potential front-running, and other tactics employed by these automated systems, which could influence transaction outcomes and overall market dynamics.

Screenshot 2024 02 16 at 5.04.34 PM

Source: Dune Analytics

Looking at the token

At press time, UNI was trading at $7.51 and its price had grown by 4.63% in the last 24 hours.

Uniswap on Ethereum UNI 17.12.19 16 Feb 2024

Source: Santiment



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