July 13, Uniswap announced in a press release the launch Alpha v3 solution Decentralized Finance (DeFi) startup Optimism on the main network Optimistic Ethereum (WHERE). This is because Uniswap is by far the most widely used decentralized exchange (DEX) of all Ethereum versions. Like all applications hosted on the smart contract blockchain, Uniswap also faces a blockchain congestion problem that Optimism is technically addressing.
Moving Uniswap to Optimism
Uniswap is currently the largest consumer of gas in Ethereum, which is 1500 ETH spent on transactions in the last 30 days.
In March, DEX Uniswap announced the third version of its protocol: Uniswap V3…
At the time of release, the main innovations offered by Uniswap V3 was the introduction of the concept “Concentration of liquidity”… In short, liquidity providers can set a price range over which their liquidity can be used. Outside of this range, swaps will not use their liquidity and therefore providers will not be affected by the famous irrecoverable losses…
Liquidity concentration is not the only flagship announcement of this new version, however. Indeed, Uniswap also announced that its platform going to move to the second level solution Optimism…
In fact, Ethereum has been grappling with the challenge of increasing transfer and interaction fees for smart contracts for several months now. Uniswap was already ready to move to a second level solution Optimism, which is one of the many startups working on the so-called convolutionsthat combine secondary protocol transactions to evolve the base layer and significantly reduce transaction costs.
For information, Uniswap v3 did not replace its predecessor, in the first month its sales amounted to $ 17 billion.
Alpha launch of Uniswap v3
After months of hard work, the Uniswap protocol team has just announced launch of the alpha version of DEX on Optimism…
The decentralized exchange (DEX) team said:
“In this alpha release, Optimism will support the initial bandwidth 0.6 transactions per second… Since Uniswap V3 is currently one of the few protocols deployed on Optimism, this should result in transaction throughput roughly equivalent to L1. Unlike L1, transactions on Optimism are confirmed instantly – no more pending or blocked swaps. “
As a reminder, once the theoretical throughput of the Optimism solution is fully deployed, it should approach more than 20,000 transactions per second. This is a far cry from the 0.6 transactions per second claimed by Uniswap.
Thus, Uniswap estimates that using its version deployed on Optimism should allow users to divide the transaction cost by 10 required to interact with the protocol.
Another important advantage: on Optimism, all transactions are instant. In practice, this means that all swaps to be made there will also be.
Early alpha product
Indeed, Uniswap mentioned in its announcement that Optimistic Ethereum is a complex Layer 2 scaling solution that still requires rigorous battle tests… However, the Uniswap team warns that there may be several inconvenience in the coming weeks:
- Downtime: the network will be affected by expected and unforeseen downtime during which the exchange cannot be made;
- Withdrawal period: as optimism is based on optimistic savings packages, there is a one-week escrow period for withdrawals before they can be traded on the Ethereum mainnet.
- Limited number of assets: only a few assets are supported at launch, namely ETH, USDT, WBTC, DAI and SNX.
- Oracles TWAP: The Optimism sequencer introduces additional confidence for developers using price streams v3.
- Composition of contracts: WHERE supports full layout. However, at startup, the network does not allow arbitrary deployment of smart contracts.
Ultimately, striving to make Ethereum scalable is a never-ending challenge. In developing these second-tier solutions, the parent Ethereum chain is also preparing for changes with the London hard fork, which will be activated on August 4th. Moreover, this good news did not stop Ethereum (ETH), UNI and other markets from falling. Uniswap has dropped 2.54% in the past 24 hours, while Ethereum has dropped 4.76%.