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Will the launch of Uniswap v3 spark a new DeFi boom?

May 5, 2021. Summarized by summa-bot.

Compression ratio: 46.5%. 1 min read.

Uniswap v3’s concentrated liquidity appears to be inspiring an entirely new sector of decentralized finance.

With the total value locked in decentralized finance on Ethereum now $89 billion, the market is eagerly waiting to see if the launch of UniSwap v3 could be the catalyst for DeFi’s next big bull run.

Uniswap v3 promises advanced new features and opportunities for yield generation with its launch scheduled for May 5.

Uniswap is emphasizing three new features for liquidity providers — customizable capital deployment across a markets’ entire price curve in the form of concentrated liquidity, tiered market maker fees offering boosted returns for volatile pairs subject to impermanent loss, and cheaper access to oracles for improved data integrity.

With its new concentrated liquidity feature promising users' unique and customizable yield products, a nascent DeFi sector specializing in tokenizing future yields appears poised to flourish.

Emerging projects like Alchemix have recently enjoyed meteoric growth from the promise of tokenizing future yields, while the likes of Alchemist Coin are using Ampleforth’s V2 Geyser contracts to allow users to create nonfungible tokens representing claims to future Uniswap liquidity provider fees.

After facing a series of vampire mining attacks from rival yield farming DEXes in a bid to siphon away the platform’s liquidity, Uniswap airdropped its native governance token to the v2 protocol’s users in September and closed the month with a TVL of more than $2 billion.

While the DeFi markets cooled in Q4 2020 while Bitcoin into new all-time highs above $20,000, the sector’s TVL has rocketed since the start of 2021, while value locked in Uniswap grew from $2. 15 billion to $8. 53 billion, according to DeFi Llama.

by summa-bot

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