Will the launch of Uniswap v3 spark a new DeFi boom?

Wednesday 05 May 2021, 1:24 PM AEST - 1 week ago

With the total value locked in decentralized finance on Ethereum now $89 billion, the market is eagerly waiting to see if the launch of UniSwap v3 could be the catalyst for DeFis next big bull run.

Uniswap v3 promises advanced new features and opportunities for yield generation with its launch scheduled for May 5.

Uniswap is emphasizing three new features for liquidity providers — customizable capital deployment across a markets entire price curve in the form of concentrated liquidity, tiered market maker fees offering boosted returns for volatile pairs subject to impermanent loss, and cheaper access to oracles for improved data integrity.

The expected reduction in Ethereums fees due to the EIP-1559 upgrade come July is also expected to boost v3s value proposition, and the latest version of Uniswap will also launch on Optimism after the layer-two rollups solution goes live.

With its new concentrated liquidity feature promising users' unique and customizable yield products, a nascent DeFi sector specializing in tokenizing future yields appears poised to flourish.

1/ Uniswap v3 will improve capital efficiency and liquidity for synthetic tokens built with UMA.

The defining feature of this upgrade is "concentrated liquidity." It grants individual liquidity providers more control over how they provide liquidity.https://t.co/sysXbun0qg

— UMA (@UMAprotocol) May 3, 2021

Emerging projects like Alchemix have recently enjoyed meteoric growth from the promise of tokenizing future yields, while the likes of Alchemist Coin are using Ampleforths V2 Geyser contracts to allow users to create nonfungible tokens representing claims to future Uniswap liquidity provider fees.

Further, new decentralized exchanges are innovating to facilitate trade in tokenized future yields, with Pendle raising $3.5 million from major investors ...

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