HomeNewsUniswap's New Update Aims to Tame Market Swings

Uniswap’s New Update Aims to Tame Market Swings

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  • Uniswap v4 introduces a new update to the Time-Weighted Average Market Maker (TWAMM) aiming to mitigate price impacts of larger trades.
  • Recent data from Dune Analytics shows Uniswap’s trading volume over the past week reached $2.83 billion, claiming 58% of the DEX market share.

Drawing from recent updates on the Uniswap Labs Blog, Uniswap, a pivotal cryptocurrency infrastructure for countless users, handling a trading volume exceeding $1.6 trillion, has unveiled its latest protocol iteration, Uniswap v4. The update allows developers to engineer bespoke Automated Market Maker (AMM) functionalities atop Uniswap using “hooks.” One notable hook is the TWAMM, designed to dilute the price influence of sizeable orders by fractionating them over a set period.

Deep Dive into TWAMM

If you’re an involved trader or liquidity supplier within the Uniswap protocol, you’ll recognize TWAMM as a foundational market-making mechanism. Uniswap analogizes TWAMM to an on-chain tool devised to synchronize exchanges with prevailing market rates. But, a fresh modification to the TWAMM mechanism was recently revealed. As per Uniswap’s elaboration, this enhancement to TWAMM aspires to curtail abrupt price fluctuations for hefty trades.

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Avoiding unexpected spreads is at the heart of this update. Uniswap illuminated that market participants will now relish price constancy by dispersing a single large swap into minuscule portions. While TWAMM’s presence dates back to 2021, its initial function was confined to assisting traders in lodging elongated orders spanning a certain block count. This newly incorporated feature will invariably alter the order submission procedure. However, it’s worth noting that Uniswap remains unrivaled as the AMM boasting the peak DEX volume. As per Dune Analytics, over the preceding week, Uniswap amassed a trading volume of $2.83 billion, leading to $3.53 million in collective liquidity pool charges. Consequently, Uniswap secured approximately 58% of the entire DEX market domain, with PancakeSwap lagging.

Buzz Surrounding Uniswap

The buzz surrounding Uniswap might further amplify with this advancement. Currently, metrics indicate that Uniswap’s “social dominance,” which gauges project discussions, has soared to 1.077%. This uptick implies the burgeoning enthusiasm and discussions enveloping Uniswap in the cryptocurrency media circuit. Additionally, the TWAMM enhancement might catalyze another surge in this social dominance as market stakeholders might bolster their interactions with the Uniswap protocol.

On a broader perspective, market sentiments appear overwhelmingly positive towards the Uniswap project, potentially indicating a promising trajectory for both the platform and its native token, UNI.

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