Uniswap V3 was the most used Ethereum contract in 2022 (2024)

FAQs

Uniswap V3 was the most used Ethereum contract in 2022? ›

Uniswap V3 has become the most popular Ethereum contract in 2022, ranking first when it comes to total gas used throughout the year. According to data from Dune Analytics, Uniswap V3 used up over 2.8 million gas in 2022.

Uniswap v3 is built on a system of liquidity pools, which are designed to provide seamless trading experiences for users. Liquidity providers (LPs) contribute to these pools by depositing an equal value of two different tokens, which are then used for trading within the platform.

Beacon Deposit Contract

This explains the Beacon Deposit Contract's massive holding — over 46 million ETH, a huge 30% of all Ethereum! Worth roughly $165 billion, users essentially locked their ETH to secure and validate ethereum transactions.

Simpler experience for LPs

While v3 offers advanced capabilities for more active liquidity providers (LPs), v2 offers a more simple LP experience. Unlike v3, pools on v2 cover the entire price range of the pool by default — reducing the need for active management and monitoring as an LP.

Uniswap uses smart contracts to also avoid liquidity issues that traditionally affect centralized exchanges. The elimination of any rent-seeking third party, such as a centralized exchange or financial institution, also reduces transaction processing fees.

Uniswap is generally considered a safe DEX for trading cryptocurrency assets. Token swaps are highly secure since they do not require funds to be held on the exchange.

Uniswap V3 was launched in May 2021. The main upgrade from Uniswap V2 to V3 was concentrated liquidity, which gives individual liquidity providers (LPs) granular control over what price ranges capital is allocated.

Rain Lohmus is the largest individual ETH holder with 250K ETH, however, he has lost access to the private keys which control his wallet. Vitalik Buterin is the largest individual ETH holder with access to his wallet (245 ETH).

What rank is Uniswap V3? ›

Amberdata's Uniswap v3 Impermanent Loss feature calculates fees, returns, and losses at the event level and takes liquidity distribution into account.

Uniswap V3 introduces concentrated liquidity, allowing liquidity providers (LPs) to concentrate their funds within specific price ranges. This feature enables LPs to provide more targeted liquidity, reducing capital inefficiencies.

UNI Weaknesses

Uniswap and DEXs, in general, can be copied/knocked off (SushiSwap and PancakeSwap) due to their open-source nature, losing market share. Traders may suffer impermanent loss when providing liquidity to Uniswap, deterring a portion of potential users.

The Uniswap interface sets a default slippage limit of 0.5%. This slippage limit is the difference between your expected output and the real output at the time of your swap. If the real output changes by more than your set slippage, the transaction will fail. At your own risk, you can adjust the slippage limits.

Yes. In the United States, your transactions on Uniswap and other platforms are subject to income and capital gains tax. If you've earned or disposed of crypto (ex. Sold or traded away cryptocurrency) during the year, you'll have a tax liability to report to the IRS.

Uniswap v3 introduces multiple pools for each token pair, each with a different swapping fee. Liquidity providers may initially create pools at three fee levels: 0.05%, 0.30%, and 1%.

Uniswap is open-source software licensed under the GPL. Each Uniswap smart contract, or pair, manages a liquidity pool made up of reserves of two ERC-20 tokens. Anyone can become a liquidity provider (LP) for a pool by depositing an equivalent value of each underlying token in return for pool tokens.

Uniswap v3 protocol has the 1%, 0.3%, 0.05%, and 0.01% fee tiers. In v3 the fees get collected and stored, but these fees do not get added back into the pool. The liquidity provider has the ability to collect these fees. They have the choice of adding the fees back into the pool or keeping the fees.

V1 and V2 are open source and licensed under GPL. V3 is open source with slight modifications, which are viewable here. Each version of Uniswap, once deployed, will function in perpetuity, with 100% uptime, provided the continued existence of the Ethereum blockchain.