- Uniswap v3 concentrated liquidity inspires an entirely new sector of DeFi.
- The total value locked in decentralized finance on Ethereum is now $89 billion.
- Uniswap v3 promises advanced new features and opportunities for yield generation.
Meanwhile, it seems likely that the UniSwap v3 launch could spark DeFi’s next big bull run. In fact, v3, which is scheduled to launch on May 5, promises advanced new features and opportunities for yield generation.
1/ Uniswap v3 will improve capital efficiency and liquidity for synthetic tokens built with UMA.
The defining feature of this upgrade is “concentrated liquidity.” It grants individual liquidity providers more control over how they provide liquidity.https://t.co/sysXbun0qg
— UMA (@UMAprotocol) May 3, 2021
Also, Uniswap emphasizes three new features for liquidity providers.
- Flexible capital distribution across a markets’ entire price curve in the form of concentrated liquidity.
- Flexible market maker fees offering boosted returns for volatile pairs subject to impermanent loss.
- Improved data integrity and cheaper access to oracles.
Moreover, v3’s new vital liquidity feature ensures users unique and customizable yield products. Also, a nascent DeFi sector concentrating on tokenizing future yields appears poised to flourish.
Prior, the DEX faced a series of vampire mining attacks from rival yield farming platforms. The attacks were a bid to siphon away the exchange’s liquidity. However, Uniswap airdropped its native governance token to its v2 protocol users in September and closed the month with a TVL of more than $2 billion. In fact, the DeFi markets cooled in Q4 2020 while Bitcoin set new all-time highs above $20,000.
Finally, the DeFi sector’s TVL has surged since the start of 2021. In fact, the value locked on Uniswap grew from $2. 15 billion to $8. 53 billion this year, according to DeFi Llama.