Golden Observation丨How do we use Uniswap V3?

Golden Finance Blockchain, May 20th The recent release of Uniswap V3 is like a stone that stirred up a thousand waves, attracting great attention from Ethereum and the entire cryptocurrency field. Uniswap V3 provides automated market makers with a safe and reliable "layer solution" on which all other protocols can be built, and this new version has many people excited.

It is worth mentioning that the core of the Uniswap V3 version lies in its customizability. Users can concentrate the liquidity used as a market-making position within a specific price range without having to explore all price exposures. The contract core relies on the NonFungiblePositionsManager.sol contract, which allows users to interact with each other to deposit and withdraw liquidity. In addition, a non-fungible token (NFT) representing liquidity will be minted and destroyed accordingly in Uniswap V3. This NFT is an ERC-721 token with a unique Token ID. As of May 15, there have been About 15,000 Uniswap NFTs were minted.

Not only that, the Uniswap V3 liquidity pool can also customize the token exchange fee. When Uniswap V3 provides liquidity, the Multicall function that can bundle multiple transactions at one time will be called. Once the liquidity pool contract supports a specific trading pair, the liquidity will be directly deposited into the trading pair; if the liquidity pool contract does not support a specific trading pair, a new liquidity pool contract will be deployed.

Asproex (Apollo) named Jinse Finance and Economics "Creating with the Times" Second Annual Golden Ceremony Dinner: On December 26, 2020, the second annual Golden Ceremony of "Creating with the Times" hosted by Jinse Finance and Economics will be held in Hainan InterContinental Sanya Haitang Bay Hotel. At that time, Asproex (Apollo) will participate in the grand ceremony as the title-zce sponsor of the grand ceremony dinner, and will join hands with Jinse Finance to jointly promote the application and popularization of blockchain technology.

Asproex (Apollo), as an offshore bank holding licensed trading platform, covers CTO (Corporate Token Offering) corporate token listing, contract documentary, ETT index token, digital mining, Digital Bank sector and holds legal licenses in 5 countries , is committed to providing one-stop digital listing services for small, medium and micro enterprises around the world. [2020/12/22 16:07:08]

How users can use Uniswap V3

So how can users take advantage of Uniswap V3? Let's first analyze the number of Uniswap NFT minting. So far, about 15,000 Uniswap NFTs have been minted. According to the number of NFTs minted, the total liquidity of these trading pairs accounts for more than 30% of the total liquidity of Uniswap V3. In fact, each Uniswap NFT is the only representative of the user's market order, so we can know the performance of the relevant asset trading pair through the NFT.

Golden Evening News | List of important news on the evening of January 22: 12:00-21:00 Keywords: Ministry of Industry and Information Technology, Hong Kong Monetary Authority, Uzbekistan, UPbit

1. The Ministry of Industry and Information Technology established the Cryptography Application Research Center to promote the application and innovative development of cryptography.

2. The Hong Kong Monetary Authority announced the research results of the central bank's digital currency and will further cooperate with the Bank of Thailand.

3. Du Jun: Long-termism is the key to the blockchain industry in 2020

4. The Japan Blockchain Promotion Association established the Stablecoin Committee and released the Japanese version of Libra.

5. Uzbekistan will implement tax exemption for income from encrypted asset business.

6. Payments and consulting firm Bottomline Technologie tests Ripple's remittance network word.

7. The Inner Mongolia Blockchain Research Institute was formally established.

8. The South Korean exchange UPbit has banned all currency and cash withdrawals for foreign users.

9. Baidu Super Chain was approved by the Ministry of Science and Technology as a national key project of blockchain copyright application.

10. Bitcoin fluctuated within the day, the highest rose to 8817.73USDT, and the lowest fell to 8500USDT. [2020/1/22]

Through the analysis, it can be seen that there are currently two types of liquidity pools that are the most popular, namely: asset-asset trading pairs and volatile asset-stable currency trading pairs. The reason why the WETH-stable currency trading pair is popular among liquidity providers is that liquidity providers may use this trading pair to formulate targeted market-making strategies. Assuming that the current price of the DAI/ETH liquidity pool is 1,500 DAI/ETH, you expect ETH to drop to 1,000 DAI during the next market downturn, after which ETH will rebound, and then you can set a price of 1,000 DAI/ETH A buy order, which means DAI will be automatically converted to ETH once the price falls within the range. Likewise, limit sell orders are also possible, ie: if one wants to sell ETH when the price hits a certain price range, one only needs to place an order at a price above 1,500 DAI/ETH and then only place a Just provide ETH in the pool.

Analysis | Golden disk: PAI/USDT rises in the downward channel and is blocked: Comprehensive analysis of the golden disk: PAI/USDT hit a new low in the morning, and is currently blocked in a small rise in the downward channel. The lower support level is 0.30, and the upper pressure level is 0.35. Short-term wait and see . [2018/8/14]

It is worth noting that since transactions such as WBTC-WETH and USDC-USDT are highly correlated with price movements, they are less likely to suffer from impermanent loss (Impermanent Loss), so they are of great importance to liquidity providers. attraction. However, traders may still face significant slippage on these trading pairs.

We can model this formula "x * y = k" across the entire price range as we did in Uniswap V2. As the x-axis moves along the Uniswap invariant curve, the price volatility on the y-axis will gradually increase. However, for asset trading pairs with high correlation, high slippage trading should not actually occur.

In fact, Uniswap V3 also considered the stable asset slippage problem of Uniswap V2 when designing. In Uniswap V3, the formula "x * y = k" is only applicable to the price range actively set by liquidity providers, and liquidity must be concentrated around a very narrow spread. Although the Daily Trading Volume of Uniswap V3 is slightly inferior to that of other protocols, if you compare the indicator of Total Value-Locked, Uniswap V3 is currently relatively leading, and its liquidity The efficiency of the permanent capital pool is also widely recognized.

Jinse Finance data broadcast ranks USDT second in the global trading volume: Jinse Finance data broadcast, as of press time, 24 hours, among the top 100 currencies by market value, the top ten currencies by transaction volume are BTC (32 billion RMB), USDT (20.6 billion RMB), ETH (14 billion RMB), EOS (7.8 billion RMB), BCH (3.7 billion RMB), LTC (2.3 billion RMB), ETC (2.1 billion RMB), XRP (2 billion RMB), TRX ( 1.3 billion RMB), OKB (600 million RMB). [2018/6/13]

The Charm strategy is simple and smart

Currently, there is a project based on Uniswap V3 - charm.fi's Alpha Vault that provides DeFi users with new opportunities to adapt to a higher level of complexity than before to access liquidity provision strategies. This automated liquidity provision strategy is currently deployed on mainnet, and like all on-chain activities, smart contract programmability introduces a new way for DeFi users to create automated strategies across various capital markets.

It can be said that Charm's strategy is as simple as it is clever. Charm's Alpha Vault will move your market-making order price range up and down according to changes in market prices, so as to achieve high-level management of assets, and liquidity providers can therefore continue to earn transaction fees. On Uniswap V3, once the market price exceeds the price range set by the user in the liquidity position, the user will no longer be able to earn transaction fees through the provided liquidity funds.

Jinse Finance Live Report, Lyu Xinhao: Blockchain applications face many challenges in the field of IoT: At the 2018 World Digital Asset Summit (WDAS) and FBG Annual Conference, Lyu Xinhao from IoT Chain/ITC said that blockchain There are many problems to be solved in the application of technology in the field of Internet of Things. For example, the current application of blockchain technology in the field of Internet of Things needs to consume extremely high resources, and the requirements for hardware are extremely high. At the same time, there are certain limitations in terms of expansion. bottleneck. [2018/5/3]

What is the gas efficiency of Uniswap V3?

Whether it is minting NFT, or routing and other on-chain activities require the support of complex calculations, so higher gas costs are required to execute. We found that in the past week, the gas fee spent on transactions on the Uniswap platform was close to 65,000 Ether, and the proportion of the gas fee spent on Uniswap to the total gas fee of Ethereum is also steadily increasing.

Some people believe that the Uniswap V3 contract has had a huge impact on the gas market, and its gas expense accounted for nearly 50%, ranking the highest among the top 20 gas expense projects. Indeed, aggregated data shows that providing liquidity on Uniswap V3 does cost a large amount of ETH as a gas fee per transaction. This difference is even more pronounced when one considers that each time a new liquidity position (i.e. NFT) is minted there may also be multiple repeat transactions.

When the Ethereum gas price peaked on May 11, the average cost of minting on Uniswap V3 was about 0.17 ETH, while the average cost of minting on Uniswap V2 was about 0.15 ETH. But even though the average cost of minting on Uniswap V2 is lower, people seem to be more willing to trade on Uniswap V3, because the number of new liquidity provider positions on Uniswap V3 has been steadily decreasing.

In the final analysis, will token exchange transactions on Uniswap V3 consume more or less gas fees? In this regard, Uniswap V3 stated in its announcement that Uniswap V3 not only has breakthrough design improvements, but also the token exchange gas cost of Uniswap V3 on the Ethereum mainnet is also cheaper than Uniswap V2. But at the same time, there are also many people who disagree with Uniswap's rhetoric. They think that the gas price of Uniswap V3 does not seem to be lower than that of Uniswap V2, but this situation is basically in line with expectations.

In order to further compare the gas costs of the two, we further aggregated the data of gas costs spent in Uniswap transactions, and calculated the "average gas expenditure" indicator according to the following consensus, namely: total gas costs paid / tokens of Uniswap V3 The total amount of exchange and the total amount of gas fees paid / the total amount of Uniswap V2 token exchange.

By comparing the data of the above two indicators, we found that the cost of token exchange on Uniswap V3 seems to be slightly higher. Taking the data on May 13 as an example, Uniswap V3 needs to pay an average gas fee of about 0.037 ETH per transaction, while Uniswap V2 needs to pay an average gas fee of about 0.027 ETH per transaction, which means that if according to Based on the ETH price of the day, users will pay more than $30 more for each transaction on Uniswap V3 than on Uniswap V2. In addition, compared to the past 10 days, the cost of token exchange on Uniswap V3 is also about 0.0024 ETH higher than Uniswap V2 on average, and the standard deviation of gas fee expenditure is about 0.03078 ETH.

Summary

For the cryptocurrency market, there are indeed many needs to optimize gas costs. At present, Uniswap V3 has allocated part of the funds to support the research of complex market-making strategies, aiming to further optimize the return on capital of specific assets. As time goes by, we can further compare the gas expenses of Uniswap V3 and Uniswap V3.

Although Uniswap V3 still has the problem of high gas costs, it is undeniable that Uniswap V3 has achieved a lot of remarkable results since its launch, and has also brought more benefits to the development of the DeFi ecosystem.

The unique stability and fully decentralized governance of Uniswap V3, the solution to the problem of high slippage, and the further improvement of capital efficiency in the case of simple discretionary strategies are all worthy of our attention .

Part of this article comes from Yahoo Finance

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