Hayden Adams, CEO of Uniswap Labs, has highlighted key features of newly launched Uniswap V4, marking major improvements over Uniswap V3. Adams, in a post on X, explained how V4 compares in terms of efficiency when executing a token swap.
Uniswap V4’s efficiency test
Uniswap V4 has improved as it is much more gas-efficient than V3. This suggests that users can enjoy cheaper transactions using the protocol.
Adams demonstrated this by swapping $1,000 worth of Ethereum (ETH) into Tether (USDT) through the Uniswap V4 12 hours after its launch.
According to him, the Uniswap algorithm suggested he employ a multihop route instead of a single-hop swap.
The multihop swap from ETH to USDC and USDT used two V4 pools with a cumulative Total Value Locked (TVL) of $400,000. Meanwhile, the single-hop swap, which employs direct ETH to USDT through V3 pools, has a massive $150 million TVL.
Testing a $1000 ETH -> USDT swap like 12hrs after launching v4
Our routing recommends a multihop swap ETH -> USDC -> USDT through two v4 pools with a combined tvl of $400k as the best price
Even compared to a single hop through the any of the v3 ETH/USDT pools with a combined… pic.twitter.com/gE973XYeN3
— Hayden Adams 🦄 (@haydenzadams) February 1, 2025
The advantage of Uniswap’s V4 is that even with lower liquidity, the multihop route still yielded the best price. This is due to V4’s improved gas efficiency, which reduces swap costs and makes multihop routes cheaper.
Additionally, it leads to better prices for V4 users while guaranteeing higher profits for liquidity providers.
UNI trading volume surges
Experts consider this development a key to drive growth for the ecosystem and a huge win for the Ethereum chain. They attributed the success to the Dencun upgrade, which helped enhance smart contracts’ functionality. This, in turn, supports innovations like the Uniswap V4 architecture.
Besides the lower gas fees, analysts say the more efficient route means smaller pools can compete with large pools in the ecosystem.
This might ultimately drive wider adoption and value. As of this writing, Uniswap (UNI) has crashed below the $12 support level again. UNI was trading at $11.43, a 3.37% decline in the last 24 hours.
However, trading volume has climbed by 58.93% to $336.42 million. This renewed interest from investors might help Uniswap rebound in the short term.
