Uniswap v4 is an advanced version of a digital marketplace, known as an Automated Market Maker (AMM), where people can trade different types of digital currencies, called tokens, without needing a middleman. This marketplace operates on the Ethereum Virtual Machine, a global computer network.
One of the key features of Uniswap v4 is something called "hooks". Hooks are like mini-programs that can be added to a trading pool to change how it operates. For example, a hook could adjust the trading fees or add new features that weren't possible in previous versions of Uniswap. This makes Uniswap v4 a highly customizable marketplace where anyone can set up a pool that works just the way they want.
Another major change in Uniswap v4 is the introduction of a "singleton" model. In previous versions, each trading pool was managed by its own contract, kind of like a separate stall in a marketplace. In Uniswap v4, all the pools are managed by one big contract, which is like having a single market manager overseeing all the stalls. This makes things more efficient and reduces the cost of creating new pools.
Uniswap v4 also reintroduces support for native Ethereum, the original form of digital currency on the Ethereum network. This is a big deal because trading with native Ethereum is cheaper and more efficient than trading with the wrapped version of Ethereum, which was required in previous versions.
There are also several other notable features in Uniswap v4. For instance, it uses a new method of accounting for tokens that reduces the need for costly transfers. It also introduces a new way for users to donate to liquidity providers, the people who supply the tokens for trading. This could open up new ways for users to reward providers or create new types of fee systems.
In terms of governance, Uniswap v4 allows for more flexibility in setting fees. The creators of a pool can choose whether to have a static fee or dynamic fees that can be adjusted by a hook. They can also decide whether a hook can take a percentage of the trading fees or withdrawal fees.
In summary, Uniswap v4 is a highly advanced and customizable digital marketplace for trading tokens. It introduces a range of new features and improvements that make it more flexible, efficient, and user-friendly than previous versions.
