V3 was released steadily in the bull market. Compared with the out-of-circle hotspots like Dogecoin, the release of V3 looked extremely deserted. The team did not make too many flattery and compromises because of the bull market, such as opening liquidity mining, or short-term price stimulation.
Many people complain about V3 because of the fee issue, but the innovation of V3 lies in the geometric increase in capital efficiency, and the eternal theme of DeFi is capital efficiency. From the different focus of each DEX version iteration, it also reflects the difference in the structure of the team, and whether it has grasped the essence and fate of DeFi.
The importance of capital efficiency is far greater than scalability, handling fees, and vertical series of acquisitions.
Liquid mining is actually not conducive to increasing capital efficiency, and Uniswap has proven that a project with a moat and first-mover advantage can attract a huge amount of liquidity without resorting to the subsidy strategy of liquidity mining. At present, the liquidity mining incentives of various public chain ecology, with the intervention of major whales, have obviously entered a serious involution.
The release of V3 drove retail LP providers, from passive LP provision without a price range to active LP provision with a price range. This puts high demands on the professionalism of LP providers, and a bright opportunity that follows is the machine gun pool of active market maker strategy. VISR/MIST/Charm are currently three projects with the concept of the V3 machine gun pool, but no products have been released. We can also expect that old-brand head machine gun pools such as YFI will be the first to develop a market maker strategy for V3.
The above is that Uniswap V3 has laid off market makers.
The release of V3 will bring many investment opportunities in surrounding infrastructure, and the active market maker strategy machine gun pool is just the tip of the iceberg. Judging whether a product is great also lies in this. Each iteration of it can generate more investment opportunities, attract more capital, technology and talents, and produce a positive spiral effect.
Uniswap V3 also laid off grid trading. V2’s passive LP offer without price range is actually an infinite dense grid transaction without price range, while V3’s active LP offer with price range has become Grid trading with precise intervals.
Witnessing the iteration of UNI from V1 to V2 and then to V3 also convinced us that epoch-making, revolutionary, and innovative products with continuous self-iteration capabilities like Uniswap are worthy of long-term holding across cycles. I am very pleased, not only because the currency circle has more and more currencies like UNI that are worth investing in, but also because we can confidently talk about it now that value investment does exist in the currency circle.
Of course, capital efficiency is important, and Layer 2 must also catch up on the schedule as soon as possible. Polygon is a relatively reliable two-tier solution, and its recent momentum cannot be underestimated, whether from the increase in TVL or the cooperation with established DeFi projects such as AAVE and CRV. But the second-tier plan is not only a technical problem, it is also a problem of squadrons and factions. At present, the capital that leads the currency circle and masters the core voice of the currency circle, led by Paradigm, wants to hold Optimistic in the upper position. As for whether Optimistic can bear it, it has to speak with strength. The battle for liquidity of the second-tier plan must be a major highlight in the future, and the intensity of the fight can be seen.
Another major innovation of V3 is LP or NFT. The attempt to combine NFT and DeFi has begun in the past two years. But the innovation of LP, or NFT, is likely to make NFT really plug in the wings of finance, which means that the NFT track has just begun.
UNI allows market makers, grid trading, high selling and low buying to be laid off. The bloodline of finance is liquidity, that is, market makers. Such an awesome thing allows one UNI to replace a large part of it.
In theory, as the strongest DeFi leader, UNI can continue to innovate, making other AMM DEX feel extremely suffocated, and constantly squeezing the living space of other competitors. Therefore, we should have such a recognition that what you buy is not only UNI, but also a ticket to the new world. Because UNI represents a new era.