Hey Edge readers,
Uniswap V4 is shaking up DeFi with the biggest upgrade to the world’s leading decentralized exchange in years. The new version introduces Hooks, customizable smart contracts that let developers reprogram how liquidity pools behave, unlocking a wave of experimentation in DeFi. This week, we’re diving into Uniswap V4’s early traction and the innovative Hooks already being built.
- The Exponential team
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Uniswap V4: The next era of DeFi
Uniswap V4 is live, and it comes with one big innovation: Hooks. Hooks are external smart contracts that can be attached to individual pools. These customizable smart contracts let developers modify how liquidity pools behave, unlocking new ways to trade, earn yield, and manage liquidity. Every pool can have one hook but a single hook can power an infinite amount of pools.
Since launching, v4 is already seeing solid adoption, but how much of that is driven by Hooks? Let’s dig in.
V4 by the numbers
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Source: Dune @obchakevich
- Uniswap remains one of the go-to decentralized exchanges (DEXs), with V3 leading the way, accounting for roughly 80% of all trading volume across all Uniswap versions. V2, while older, still holds a notable 20% share, showing that its liquidity remains sticky and continues to play a key role in swaps. As V4 enters the mix, it’s beginning to carve out its place in the ecosystem.
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- Since launching just two weeks ago, Uniswap V4 has attracted $71M in total value locked (TVL) across all supported chains. While the majority of this liquidity sits on Ethereum mainnet, Layer 2 networks like Arbitrum and Base are gaining traction, accounting for 6.6% and 4.6% of TVL, respectively. Trading activity is shifting even more aggressively to L2s—63% of the $370M in total volume has come from these cheaper, faster networks.
The data suggests V4 is gaining traction, particularly on Layer 2s, where traders benefit from lower fees and faster execution. But how much of this activity is being driven by Hooks?
Early adopters: Who’s building with hooks?
Hooks allow developers to build custom logic into liquidity pools, such as dynamic fees, MEV resistance, and automated liquidity management. Expect these numbers below to keep climbing as more builders experiment with Hooks to create customized DeFi experiences.
🔹 67 Hooks have been deployed by 24 unique developers
🔹 22.8% of swap volume is coming from Hooked pools
🔹 32.8% of Hooks are serving multiple liquidity pools (2+)
Some of the most interesting Hooks being built so far:
- Flaunch: A memecoin launchpad on Base using Hooks to give creators more control with token launches. When a new token launches, Hooks ensure 100% of trading fees go back to the creators or are used to buy back the token. This means creators can benefit from trading volume without needing to sell the token. Since launching, Flaunch has driven $82.8M in volume across 3,000 pools, making it the most active hook-powered project so far.
- Bunni: A next-gen DEX that uses a rehypothecation Hook to boost returns for liquidity providers (LPs). When a liquidity position moves out of range and would otherwise sit idle, Bunni automatically routes the capital to lending protocols like Aave to earn extra yield. This ensures LPs continue earning, even when their liquidity isn’t actively being used for swaps.
- Angstrom: A DEX tackling one of the biggest pain points for LPs. Angstrom’s Hook introduces app-level control over transaction sequencing, helping protect liquidity providers from value extraction by arbitrageurs and sandwich attacks. By holding internal MEV auctions that direct value back to LPs, Angstrom aims to create fairer onchain markets.
Hooks are still in their early days, but they’re already reshaping how liquidity moves on-chain. As developers push the limits of what’s possible, expect V4 to open up a whole new world of custom DeFi experiences.
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In the news 🗞️
- Uniswap debuts its new blockchain. The DEX giant launched Unichain, a new Layer 2 network built on Optimism’s Superchain, aiming to keep more fees in-house and potentially unlock $500M in revenue. Unichain promises faster transactions, borrowing, and built-in swap liquidity, but it’s joining a crowded L2 race alongside Arbitrum, Base, and Blast.
- Ethereum Foundation puts $120M to work in DeFi. The non-profit behind Ethereum deposited 45,000 ETH into DeFi lending platforms, a move cheered by the community as a shift away from selling ETH to cover expenses. The move signals growing confidence in DeFi as the backbone of Ethereum’s ecosystem.
- Lido targets big money with V3 upgrade. The top Ethereum staking platform unveiled Lido V3, introducing stVaults, a flexible staking tool designed to attract institutions with increasing interest developing around staking-enabled spot ETFs. These vaults offer customizable staking setups and aim to boost validator decentralization while improving security.