Announcing Uniswap V4 With Hayden Adams

Hayden Adams joins us to announce the release of Uniswap V4! He walks us through innovations new to Uniswap like hooks and singleton contracts in addition to a new upgrade that can lower gas costs up to 90%. To launch V4 we need your help, the community, to contribute your opinions and decide the fate of this new protocol. ------ 📣 ASYMETRIX PROTOCOL https://bankless.cc/asymetrix ------ 🚀 Unlock $1,000+ in Perks with Bankless Citizenship 🚀 https://bankless.cc/GetThePerks ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 🦊METAMASK LEARN | HELPFUL WEB3 RESOURCE https://bankless.cc/MetaMask 👾STADER LABS | ETHX LIQUID STAKING https://bankless.cc/Stader ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku 🎮IMMUTABLE | GAMING ECOSYSTEM https://bankless.cc/Immutable 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ------ TIMESTAMPS: 0:00 Intro 5:56 Introducing Hayden 7:37 V4 Launch Date? 9:12 What Goes Live Today? 10:28 How Far Has Uniswap Come? 12:14 Can Uniswap Get Any Bigger? 13:52 Are Centralized Exchanges Competitors? 16:28 Why Do We Need V4 20:10 V4's Flagship Feature 24:47 Introducing, TWAM 28:29 A New Uniswap Fee Structure 33:57 How V4 Solves Efficiency 38:27 Singleton Contracts 41:08 The Gas Refund 43:29 The Hook Centric Roadmap 46:59 What Rollups Will Uniswap Live On? 51:34 Who Will Be Building Hooks 58:20 Fees On Withdrawals 1:05:35 Why Hooks? 1:10:18 Will Liquidity Migrate To V4? 1:16:34 How V4 Is Like a Centralized Exchange 1:20:47 Is This The Last Uniswap Upgrade? 1:22:38 Has Defi Peaked? 1:30:10 How To Get Started On V4 ------ RESOURCES: Uniswap V4 Blog Post: https://blog.uniswap.org/uniswap-v4 Hayden Adams: https://twitter.com/haydenzadams Uniswap Labs: https://twitter.com/Uniswap Hayden Last on Bankless: https://www.youtube.com/watch?v=9fqJzS08pPc ------ Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  One cool thing about single to design is it actually reduces current estimates have it reducing the gas cost of pool deployment by about 99%.

• 0:07Ryan Sean Adams?

  Wait, what?

• 0:08Speaker 00

  Sometimes people pay when gas costs are high, like north of $1,000 to deploy a pool, just a gas cost. And that same deployment would be something like $10.

• 0:18Ryan Sean Adams?

  Bankless Nation, there's a big announcement for everyone in DeFi today. Uniswap, version 4, it's coming out. We have Hayden Adams on the podcast to tell us more. We talked about a few things. What is Uniswap version 4, V4? What does it do? When's it coming? How big of a deal is this? From an order of magnitude size, is this as big as V3? We also talk about hooks, this idea of a modular Uniswap. What are hooks? What do they do? What is the future for liquidity on Ethereum? And finally, we talk about DeFi. Has DeFi slowed down? Has it diminished? Does Hayden still think we're on track to eat traditional finance? All of these topics unpacked in the episode today.

• 1:01Ryan Sean Adams?

  Guys, before we begin, though, want to tell you about a prize-linked ETH-denominated savings account from our friends and sponsors at Asymmetrix. David, what is this?

• 1:11David Hoffman?

  Asymmetrix, it is a way to make your ETH staking super exciting, or super boring, or super exciting. If you want that 4.5%, 5% ETH stake to range anywhere between 0% or 1,000%, Asymmetrix may be for you. Okay, what the hell am I talking about? So Asymmetrix, it's a little bit like pools together. Same kind of concept where everyone stakes their Ether, but only the yield goes to one person who gets a lot of yield while everyone else gets zero yield. That's why Ryan called this a prize-linked savings account. So if someone just feels like a little bit extra lucky and they want to add some excitement to their ETH staking, they can go to banklist.cc/asymmetrix

• 1:53David Hoffman?

  to get anywhere between 0% or 1,000% stake on their yield. Ryan, diving into this episode when I was learning about Uniswap V4, I really just got visions of a microcosm of Ethereum. So I'm calling this the hooks. Centric roadmap for Uniswap, whereas Ethereum has its roll-up centric roadmap. Uniswap now has hooks and it allows for Uniswap base to be extremely primitive, but hooks to reintroduce complexity into the Uniswap AMM on an opt-in basis. And I think this really gives a lot of power to builders who want to make their Uniswap pools very expressive. Overall, it starts off as a very small update.

• 2:38David Hoffman?

  V4 is a small update to V3, but the cool thing is, is that the size of how awesome and powerful Uniswap V4 is actually grows alongside the open source developer community around Uniswap. So I'm very bullish on this new update. Hayden's going to unpack it for us in this episode. Small disclaimer, Uniswap Labs is a sponsor of Bankless. They currently sponsor the Bankless Podcast. But Uniswap V4 is an episode that we would never miss. And so we're having Hayden Adams, the inventor of the Uniswap Protocol, on to discuss all about Uniswap V4. So let's go and get right into the conversation with Hayden Adams. But first, a moment to talk about these fantastic sponsors that make this episode possible, including and especially Kraken, our preferred crypto exchange for 2023.

• 3:23David Hoffman?

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• 4:07David Hoffman?

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• 4:51David Hoffman?

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• 5:36David Hoffman?

  pay with a credit card, and experience a frictionless purchase flow inside of games. So, discover your next favorite game and explore a network of 150 games building on Immutable, including such titles as Gotham Chains, Guilds of Guardians, Illuvium, Ember Sword, and Metalcore. So, join Web3's largest ecosystem of games and players. Build, play, and connect at immutable.com. Bankless Nation, I would love to introduce you to Hayden Adams, the inventor of the Uniswap Protocol and CEO of Uniswap Labs, a software company building on and around Uniswap. And today, Hayden is here to talk about the vision behind Uniswap V4 and what it could mean for liquidity on Ethereum. Hayden, welcome back to Bankless.

• 6:14Speaker 00

  Thank you for having me. So excited to be here and to talk about Uniswap V4.

• 6:18David Hoffman?

  Yeah, Hayden, are we getting a new Uniswap?

• 6:21Speaker 00

  Short answer is we are. Long answer is that the process of getting a new Uniswap is going to look a little bit different this time around. I think that a really important starting point is that we see Uniswap as very similar to Ethereum itself, where Ethereum, where it's a core piece of infrastructure, public infrastructure, on which thousands of teams are building, there's hundreds of thousands of liquidity providers, and it's really just this like public infra for the entire space, right? It has about, at times it has over 90% market share for on-chain trading, on Ethereum at least. And so, similar to how Ethereum has this like public process for it being rolled out, and there's a lot

• 7:02Speaker 00

  of time for people to respond and react and give feedback and input, there's time for all the different projects building on top of it to begin preparing their infrastructure and build on top of it. With this version of Uniswap, we really wanted to build it in public. And so what we're rolling out today is basically a vision for Uniswap V4, as well as a white paper and a draft of the code. So the code is, we have an initial code base, and it works, and it proves that it can work, but it's not final. And we don't expect it to be final for many months.

• 7:37David Hoffman?

  Okay, so the big new announcement is Uniswap V4, jazz hands, yay, we're getting new Uniswap. And also, the way that Uniswap V2 and V3 were built was, it was built, and then I think within a month, both of them were live on mainnet. And this is not what is going to be happening with V4. There is no release date, if I'm correct, and it's just a very long, open period for public collaboration, community engagement, public conversation to tinker with Uniswap V4, is that correct?

• 8:08Speaker 00

  Yeah, I think that Uniswap V3 was kind of like a Beyoncé Lemonade album drop, where when we released it, it was this cool thing, and it was entirely ready, and it was a surprise. And I think this time around, and honestly, one of the pieces of feedback we got at the time was, hey, this is really cool. This is going to take me like a month to understand, let alone build an entire integration on top of. And so that was one aspect of it. The other aspect of it is that there were, even like, at the time that we announced it, the code base was basically frozen and already well underway of auditing. And so there wasn't time to incorporate any pieces of public feedback. And There were like very, very minor things that people I mean, it was like a very good codebase. We did a really, you know, good job, but it was like,

• 8:49Speaker 00

  there was like minor pieces, very minor improvements people found at the time. And, you know, they weren't really able to be integrated. And so with Uniswap V4, there's going to be many, many months. There'll be time for people to, you know, open issues, to submit PRs. There's contribution guidelines and there's a lot of time for people to, you know, start planning integrations and start building on top of it.

• 9:12Ryan Sean Adams?

  So what are we getting right now, Hayden? At the time this episode is released, what can people go get busy with and start digging into?

• 9:21Speaker 00

  Yeah, so, you know, first we have the blog post, which just outlines a high level overview of what it is, or at least what our vision for it is. You know, similar to like Ethereum, right? You sort of have a sense of where things are going, right? We had this sort of vision of proof of stake and then everyone started marching towards it. So we have this vision for what Uniswap V4 is. We have a white paper that, you know, gives a lot more background and technical information, you know, and supporting, you know, math, et cetera. And then we have a codebase and the codebase really just contains a full draft implementation. So it kind of proves it works. It's definitely not audited. It's not, you know, production ready. And we aren't, you know, going to march straight towards audit or production ready. We're actually going to, you know, give space and time for people to contribute and to, you know,

• 10:06Speaker 00

  give feedback into it. And so, yeah, right now we have an initial implementation. We have a vision. Excited to talk about what that vision is. And yeah.

• 10:15Ryan Sean Adams?

  Before we get into the vision of V4, I want to just maybe zoom out for a minute because it's not often, Hayden, that we're able to get you on Bankless and have this kind of conversation. But like, let's zoom out all the way back to 2018. And I'm wondering if you could kind of like share how far Uniswap has come from that point in time. I was reading the blog post a little bit earlier, something like 1.5 million, or sorry, trillion with a T. My God, million, how quaint of me. Trillion in value flows through this platform. Give it, give us some stats. Give us some, some of the numbers that you look at to understand.

• 11:00Speaker 00

  To flex.

• 11:00Ryan Sean Adams?

  Uniswap's progress and its impact. Yeah, flex on us for a minute.

• 11:04Speaker 00

  Yeah, I mean, it's been an absolutely insane journey. We have the previous Bankless episode we did where we really went through a lot of the early days. But since then, it's just been absolutely insane. I guess a few of the things that we look at that are pretty interesting. Definitely like total all time volume traded is, you know, north of 1.5 trillion at this point, which is, which is pretty crazy. There's, you know, billions of dollars in daily trading, hundreds of thousands of liquidity pools created, hundreds of thousands of liquidity providers, you know, millions of traders. There's, you know, the, I think, you know, even just like the, the amount of like the market share on Ethereum, it's like, you

• 11:43Speaker 00

  know, north of 90% at times of on-chain trading on Ethereum, happens through the Uniswap protocol, you know, trades off at different times. But, um, you know, it's been trading off with Coinbase in total trading volume. You know, all sorts of things that we look at to just show like the amount of activity happening on top. Definitely, I wish I had a number for the amount of projects building on top of it. My like intuition says tens of thousands, not just thousands, you know, just because of the number of, of, you know, tokens and projects that exist.

• 12:14Ryan Sean Adams?

  So, so given all this, Hayden, one question in my mind is like, can Uniswap get even bigger? Like, I mean, haven't we seen all the growth? Isn't, aren't the growth years already behind us? How can this thing possibly get any bigger?

• 12:26Speaker 00

  I definitely think that Uniswap can get much bigger. There's a few ways for it to get bigger. Definitely like in terms of like market share on Ethereum, it's hard to get much bigger. Um, you know, there's, there's very marginal gains to be had there, right? In the order of like 10 to 15%. Um, and so I'd say that where Uniswap grows bigger is about, you know, basically growing the entire space, about having, you know, more, enabling more, you know, things to be built on top of it, you know, basically growing the entire, growing the space around it. And Really, you know, taking innovation that currently happens external to Uniswap and having that innovation happen within Uniswap. I think that like one, you know, pretty important like nuance here is that, you know,

• 13:08Speaker 00

  Uniswap has this like dominance in market share, but there is a lot of innovation today that does happen in the AMM space and a lot of experiments. And, you know, maybe a little bit of a spoiler alert for some of the stuff that's coming is that like a big part of what we're trying to do with Uniswap before is make it easier for people to, you know, experiment and innovate even within, you know, on AMM design and functionality, but having that happen still within the Uniswap ecosystem.

• 13:33Ryan Sean Adams?

  What's the goal here, Hayden? I mean, I remember at one point in time when DEXs were still in their infancy and we were just hoping to get like a, you know, like 5% market share from centralized exchanges. So basically, all of the exchange volume happened with centralized exchanges and like, wouldn't it be great if we could actually get this whole decentralized exchange thing off the ground and we could like eke out maybe double-digit percentage of volume? Like, how do you think of the competitive landscape these days? Do you consider centralized exchanges as competitors? Or would you like draw those lines differently than maybe we did back in 2018, 2019?

• 14:13Speaker 00

  Yeah, I think that it's, you know, a pretty interesting. I say that generally like decentralization offers some fundamental advantages. And the way that we always think is how do we expose those advantages to more people? And so it's definitely possible. Like, I think centralized, you know, exchanges are going to continue to exist. But I think that there are really strong advantages of decentralized exchanges and, you know, even like things that are centralized exchanges today will, you know, start tapping into the liquidity from decentralized exchanges over time. In terms of where, you know, where it actually ends, really, I think that, you know, first it's DeFi growing bigger than TFi and then it's, you know, DeFi growing bigger than TradFi. That's like the long, the long term of it. And the purpose of that is not like for its own sake, but because we think that, you

• 14:58Speaker 00

  know, that leads to a world, you know, with fair, better, you know, financial system, you know. More accessible financial system, just a better world in general.

• 15:12Ryan Sean Adams?

  These are what we call bankless values. And we don't talk about them, maybe, well, maybe we talk about them too much, David. I'm not sure. We'll let the listeners decide. But it's definitely why we enjoy having Hayden on the podcast to kind of re-articulate it. It's been baked into the DNA of Uniswap from day one to provide a bankless exchange experience where user can retain custody of their private keys and their assets. And that is certainly, we don't talk about it as much now in 2023, right? We're off chasing other things, but like, that is the core of this entire movement. I mean, that is why we're here.

• 15:49Speaker 00

  Yeah, I think, you know, it's what you said, like, a lot of the time, kind of people have been in the space for a really long time, like, take it for granted and instead of like, yeah, of course, we're doing all that stuff. Let's talk about what's new. But yeah, I agree, like, the values are super important and really important to like guiding even day-to-day decisions.

• 16:05David Hoffman?

  So Hayden, an element when Uniswap V3 came out and concentrated liquidity, added in just a whole entire layer of expression onto Uniswap V3, Uniswap in general. I was like, oh, that's the last Uniswap. That's the final completion of Uniswap. It's the logical conclusion that Uniswap V3 is now Uniswap. So clearly I was wrong about that. So what was incomplete about Uniswap V3 that we need Uniswap V4? So let's start unpacking the Uniswap V4 box. What does V4 bring to the table that V3 still had left to complete?

• 16:44Speaker 00

  Yeah, so, you know, Uniswap V3, I don't think we, I think it was a really, really good protocol, right? It's really proved itself. There's a reason it has such dominance today. It's really efficient, really flexible for liquidity providers relative to previous editions. I think that like what the, maybe the one thing, right, that we really wanted to tackle with V4 is Uniswap V3 was also extremely opinionated. And what I mean by that is, you know, when you have these immutable smart contracts, the rules for it are kind of set in stone at creation. And the more you can modify and upgrade, in certain ways, it compromises on certain security properties and compromises on, you know.

• 17:28Speaker 00

  You know, other things as well. And so I think that, you know, with, as an example, right? In the process of designing Uniswap V3, there were like a million trade-offs that had to be made. And, you know, one example trade-off is the price oracles. So the price oracles were really just, you know, basically at the beginning of every swap, the contracts store the, you know, the first swap of every block, it stores the price and, you know, adds it to these like accumulators. And with that, you can basically, other, you know, other applications can extract really efficiently average prices across any period of time in the Uniswap, in that Uniswap pair. And that's a really, you know, it was a really good, almost like public good for the space. Many other projects have, you know, have built on top of that feature.

• 18:13Speaker 00

  At the same time, running that logic for, you know, these price accumulators actually is a gas cost that is paid by swappers every swap. And so you could think of maybe something like 10%, don't quote me on that, of all gas, you know, of the gas of swaps is going to like updating these price oracles. And that amounts to a huge amount of money over, that swappers are paying over a period of time. And the thought process was basically like, well, you know, if Uniswap can be used in more ways and in more places, then ultimately that will lead to more like, you know, usage of the protocol, more liquidity in the protocol, and that will, you know, be better for swappers and offset like the increased gas cost. Now, has that played out? Probably in certain situations.

• 18:55Speaker 00

  Some pools, the oracles do get used and they're tightly integrated into important protocols. And in some pools, maybe they don't get used at all, probably the majority of pools, actually, they don't get used at all, and that's just like a tax on swappers paid over time. And the kind of like opinionated way that V3 was implemented that isn't like a choice that you can make when you deploy a pool. So I'd say that like the flagship feature of Uniswap, actually before I even, I'd say like another area that, you know, is really interesting as it relates to like the sort of opinionated nature is like fees and how fees are implemented. You know, most, like, there's a lot of different people who kind of experiment with, we're gonna build our own AMM. And usually what they're doing is actually just like experimenting with the fee logic.

• 19:40Speaker 00

  Sometimes they're doing other things, but that's like the most common thing that people do. And there's like a few other changes.

• 19:45David Hoffman?

  So people are building entirely new Uniswap forks and what you're saying is like, and they're really just tinkering with the fee model. And so they're building out entirely new exchange just to tinker with fees?

• 19:56Speaker 00

  Sometimes, and maybe sometimes they're doing other changes as well. But sort of no matter what, they're probably doing more work than they should have to. If all they're really trying to do is modify the functionality of a pool. And so I guess, you know, we'll get to the point of it, which is the flagship feature of Uniswap V4 is what we're calling hooks, which are essentially modules or customizations that you can make when you deploy a pool. And anyone can build a hook, anyone can implement one, and anyone who's creating a pool can choose what hooks their pool uses. And these hooks are pretty expressive, and they allow you to add on new features, new functionality, modify parameters of the pool in really interesting and meaningful ways.

• 20:39David Hoffman?

  So hooks, okay. So you started off this conversation with oracles and then also talked about fees. And these are all things, opinions, that you're saying Uniswap V3 had. If you wanted to start a new Uniswap V3 pool, you had embedded in it this oracle feature, whether you asked for it or not. And then because of that feature, swappers who touch the logic of every single V3 contract every time they swap, pay for that complexity to be built into that V3 pool. So what you're saying is Uniswap V4 has these things called hooks that are like generalizable things to insert into a V4 pool.

• 21:23David Hoffman?

  So I'm guessing a base V4 pool, a V4 Uniswap exchange, has almost zero features built into it, just like by default. And then the idea is you can opt into certain features, like the oracle, like fee structures, et cetera, after the fact. But the standard issue Uniswap V4 exchange is just like bare bones, primitive, reductive, maximally simple, maximally cheap, maximally efficient. Am I on the right track here?

• 21:51Speaker 00

  Yeah, exactly. I think that the, funny enough, Uniswap V4 actually has like, the base system has almost less features, right? Because the oracles have been taken out of the contract, and now they can be implemented as a hook. And so, you know, in the process of building V4, we also built a whole bunch of example hooks to show how expressive it is and the types of things that you can do. The simplest form actually has fewer features in a certain sense. So Uniswap V4, I could just start going through some examples of what you can do with hooks, maybe we'll make it more clear.

• 22:24Speaker 00

  Okay, so, you know, one example is definitely dynamic fees. So right now, you know, right now, when you deploy a new pool, the pool creator gets to choose between a few fixed fee tiers. And actually, the reason we chose- And Uniswap V3. The reason, yes, in V3, you choose between, you know, there's like four different fee tiers today, and governance has the ability to add more. And the reason that there weren't arbitrarily many is to encourage, you know, to kind of discourage liquidity from overly fragmenting and encourage people to kind of consolidate around specific pools. With Uniswap V4, when you deploy a pool, you can choose any fee you want as a static fee, or you could attach a dynamic fee hook. And the dynamic fee hook could actually customize, you know, the logic of your fee in any way you want.

• 23:07Speaker 00

  One example would be that you could do, you know, you could basically try to do some sort of oracle that tracks on-chain volatility and automatically adjusts the fee based on that. And that's an interesting experiment we've wanted to run for a long time, but we didn't want to, you know, hard code it into V3 because it was unclear if that was the optimal design. And so with Uniswap V4, people can experiment with a whole different world of fee implementations, you know, volatility-based, you could imagine DAO-controlled, you know, et cetera. And so that's one example. I think that's like a hook that will probably get a lot of usage. Other, you know, pretty major features that you can add onto a pool, we have an implementation of a limit order hook, which allows you to place limit orders at ticks.

• 23:50Speaker 00

  So right now, you know, you can, you do, you can provide, you can kind of simulate limit orders a little bit in Uniswap V3 by providing liquidity to very narrow ranges and withdrawing your liquidity after it's filled. But with Uniswap V4, you could actually just create straight-up limit orders that execute at, you know, and basically, maybe to step back quickly, hooks are basically code that run at certain points in like the lifecycle of a pool and a transaction. So you could imagine there's a hook that runs at the beginning of every swap. Before every swap, run this code. After every swap, run this code. At the moment of pool creation, run this code. Before adding liquidity, run this code. Before anyone removes liquidity, run this code. And so, you know, the hook for a fee might be like code that runs before every swap or after every swap.

• 24:37Speaker 00

  Limit orders might be, you know, would also be code that runs during the swap transaction. So maybe another kind of interesting hook that we designed is, there was this paper that Dan at Paradigm put out a while back called TWM, which stood for Time Weighted Average Market Maker. Long, kind of, don't want to go way into the complexity and the weeds of it. But essentially, when you think about a Uniswap pool and people who want to make very large orders, you know, very large orders, if you're relative to the size of the pool, you're going to get a lot of price impact and you'll get a worse price. And so usually when you have to make a very large order, if you want to trade it over Uniswap,

• 25:20Speaker 00

  you would probably want to break that order up into many pieces. And you'd have to submit a separate transaction, you know, spanned over multiple blocks. And that kind of like reduces the sort of price impact of your trade. And, you know, TWM is this idea of essentially creating long form orders on top of AMMs that would basically split up into little pieces and could execute over time. And you could have them happening in both directions. And so it's sort of reducing the price impact of a trade and spreading it out over a long period of time. So you could imagine like sell 1 million USDC over the next day or over the next hour or, you know, the next week. And this is a really interesting, cool feature. And to do it properly, you can build it externally, but to do it properly and have it really benefit

• 26:03Speaker 00

  from the liquidity within the protocol, then you actually do need to have it, you know, run at specific points. In, you know, you need to sort of guarantee that it's going to run before, you know, before swaps happen or before people add or remove liquidity to properly do the accounting. And so you can build this entirely as a hook. And we think this can be really powerful for, you know, one example is for like protocol treasury rebalancing, stuff like that, you know, or just generally large orders. And the nice thing is that it, you know, it executes your order over a very long period of time, but you only pay, you know, the gas costs at creation and closing of the order. Those are two examples. So the point is it spans from like, you know, customization of pool parameters, like the fee,

• 26:46Speaker 00

  like how fees work, which can be really interesting and meaningful and actually change the economics of a pool. You could try to have a pool that favors passive liquidity providers more than active liquidity providers, if that's what you want to do. But it also ranges to like entirely new order types like TUM and limit orders. Have a few other ones I'm very excited to talk about as well.

• 27:07David Hoffman?

  I definitely want to unpack every single one, but I really just want to double down on the emphasis that this new hook feature inside of V4 pools brings to the table with regards to developers. So just going back to the fees hook example where right now Uniswap V3 has, you said, four fee tiers. I believe it started as three, then Uniswap Governance voted in a fourth. And so these are four fee tiers that a Uniswap V3 pool could be created under. And like you said, the reason why only four is because we need to coalesce liquidity under shelling points. Right? Just pick four of these. Don't like 10 is too many, one or two is not enough.

• 27:49David Hoffman?

  But we need to have convergence of liquidity upon specific pools in order to have any liquidity at all. And you said that, well, we were interested, Uniswap Labs or Uniswap in general was interested in making a more dynamic version of fees that would be more flexible to incorporate wider ranges of fees based on certain parameters. But you all didn't want to create that because that was an opinion. And you didn't want to make that as a part of a core V3 contract. But now with hooks, we could have someone or some group of people create that logic for what is a flexible and adaptive fee structure for most types of Uniswap pools. And that could become the new shelling point of the new standard.

• 28:33David Hoffman?

  And so I'm assuming like over time, certain hooks, certain apps, uni apps, uni widgets will be developed in public with many, many people. And one or a few will emerge as like the leading hooks for generalized fee tiers for Uniswap V4 pools, or this is the leading, most incorporated, most hooked in feature, most hooked in hook for on-chain limit orders. And this is now the on-chain limit order hook because this is now no longer being developed internally to the protocol. This is now developed externally as a part of like just building on permissionless open source rails.

• 29:14David Hoffman?

  And so like a lot of this complexity of how to make a flexible adaptive Uniswap V4 pool is being pushed to the margins and allowing the shelling points of what are good hooks and what are good Uniswap features to be kind of determined by the free open source market. Am I on track here?

• 29:32Speaker 00

  Yeah, exactly. I think, you know, we've definitely, I've definitely trended in my own like thinking, you know, just seeing how it plays out towards just more expressiveness, more flexibility over like super constrained shelling points. I think shelling points are really valuable, but I think that the shelling points will happen over the best designs. I will mention that there is sort of this, there are like a few other features of V4 that blend really nicely with hooks that I just want to quickly mention that help, which is like, so the other kind of core feature is a bunch of architectural changes to the contract that we're calling singleton and flash accounting, which essentially are aimed at significantly reducing the cost of fragmentation across many pools and making it much more efficient to route across many pools.

• 30:16Speaker 00

  So we're, you know, we're entering a world of many more pools and pool designs. And what we're trying to do is, you know, say for pools within this Uniswap, within the Uniswap ecosystem, can we significantly reduce the cost of fragmentation and make it easier to route across more pools more efficiently? So the singleton design essentially is saying, it basically has all pools live in a single smart contract. And flash accounting is just a new way of doing some of the logic that basically makes it easier to, you know, right now, when you make a trade that executes across many pools, it's basically like sending tokens between pools. And it has like a very opinionated order of operations.

• 30:58Speaker 00

  And the core idea of flash accounting, kind of like the way flash loans allow you to like take whatever you want and then do everything you want. And then as long as you've paid it back at the end, Uniswap V4 actually lets you basically like do anything you want across any number of possible order, you know, transaction types within all Uniswap pools, as long as across all of it at the end, it's like, you know, Sort of reconciled and solvent and then only transfers net balances in and out of the pool. Or actually, you don't even have to transfer it in or out of the pool, but that's that's another little feature that we can come back to. But but the general point here is that like hooks introduce much more expressiveness, many more different pool types. And, you know, singleton and flash accounting basically just make it, you know,

• 31:39Speaker 00

  more efficient to route across more pools at once. And also, I think that the one other thing that I'll note there is that, you know, today, there's sort of a cost to fragmentation across AMMs that's sort of imposed on the space. You can think about like the more AMM pools exist and the more places there's like gas costs to constantly be. There's there's like sort of like, you know, Ethereum only has so much capacity to some degree, obviously, it's like a. And basically, there's like, you know, a cost to constantly arbing across all the different AMM pools. And there's also a cost to splitting your order across more pools. And so one of the nice sort of things about Uniswap V4, almost like as a as a platform, is that if you build your, you know, custom AMM logic within hooks instead of externally,

• 32:23Speaker 00

  you actually get to benefit from this sort of like shared, shared contract pool model, which will mean that, you know, building your innovations within Uniswap will actually lead to more efficient routing across everyone else building within Uniswap and it's sort of like a nice network effect and benefit to doing that.

• 32:40Ryan Sean Adams?

  Okay, I want to pull two things, you know, out of this, Hayden. So, you know, the first is when we talk about Uniswap V4, we're talking about, you know, a specific set of features. One is hooks, which we're going to spend even more time on, I think. Another is singleton, which you mentioned, and flash accounting. Right. I wanted to go back and talk about this design philosophy where where you're saying with Uniswap V4, you guys are trending towards more expressivity, which is very interesting because this is kind of counter to the reason you picked those, you know, four different or three different fee tiers for Uniswap V3 pools. So then really the idea was so that you don't lose like liquidity, right?

• 33:23Ryan Sean Adams?

  So there's not, you know, thousands of different pools out there and. And you're kind of like spreading your liquidity too thin across all of those pools. I think what you're saying is because there are some incentives or benefits through Singleton and through Flash Accounting, that sort of, there's almost like a tax, like a, not an explicit protocol tax, but like an efficiency loss type tax native to Uniswap that will still collapse towards a small, like more shared liquidity? I guess what I'm trying to ask is, why are you no longer concerned about like the thing that you were concerned about in Uniswap, Uniswap V3, which is like, well, if we're

• 34:07Ryan Sean Adams?

  creating the opportunity and the white space for all of these different pools, we just lose the network effect, we lose all the liquidity, and there will be no shelling point in a specific set of pools. Why is that no longer a concern? Is it because of Singleton Flash Accounting and kind of still the inherent efficiency that you gain here? Or like, why the, why the change in rationale here?

• 34:29Speaker 00

  So I should quickly clarify, there's not a tax, there's actually a benefit. Basically, if you build, you know, your sort of custom AMM as a hook within the Uniswap Singleton contract, then it is much more efficient to route it with other Uniswap pools than it is to route, you know, say between like Uniswap and an external AMM. All right, so you know, generally, most people are trading like, right today, when you trade across multiple pools, there is sort of an inherent tax to trading across multiple pools. And what we're doing with Singleton and Flash Accounting is essentially reducing that tax significantly when you're trading within the Uniswap ecosystem.

• 35:06Ryan Sean Adams?

  So it's all carrot, no stick is the way.

• 35:08Speaker 00

  Yeah, no, no stick here. It's all carrots. We're basically saying, you know, yeah, if you build an entirely separate AMM, then there is going to be an ink, then a trade that sort of splits across, you know, Uniswap and this external AMM will have a higher gas, you know, has like a higher gas cost. Similar to how it does today, right? It's not, it's not, there's no stick on that either. But if you build your custom AMM within Uniswap as a hook, it actually is more efficient to route. And that happens because of essentially this like, you know, all the pools are stored in the same contract. And we have, you know, cool ways of doing some of the accounting logic and even, you know, transient storage, which is in the next Ethereum hard fork, kind of plays a little bit of a role here, where we're using transient storage to more efficiently,

• 35:50Speaker 00

  you know, update internal balances and save gas there as well. But no, it's really purely a benefit. In terms of like liquidity fragmentation more broadly, I'd say that I still believe like showing points will kind of will exist. And there's even like ways to helping encourage that through like interface and default and all of that. But I think that what we're also starting to say is that, you know, yes, showing points will exist, but also this innovation is going to happen. Let's make it, let's have it happen as safely as possible. Let's have it happen, you know, within the Uniswap ecosystem. Let's, you know, let's, let's speed up, let's, let's speed up the rate of AMM innovation and allow showing points to form around some of the best designs

• 36:35Speaker 00

  as opposed to just around like Uniswap as a, as a monolithic thing. I had also mentioned that like some of the network effects are really just like, you know, infrastructure that we, that us and other teams build around the protocol. And I think that having them, you know, all, having more stuff built into Uniswap before, like there'll still be sort of this network effect of tooling and, and integrations. And to some degree, even like the, like the security and safety of it. A cool thing is that like when you're building an entire custom AMM, that's a really complicated smart contract. You kind of need to audit the entire thing from scratch. And with hooks, you know, you need to audit the hook. Basically, the, you know, it kind of like the same way Ethereum lets you build, you know, safe smart contracts. It doesn't prevent you from making unsafe smart contracts. You know, it's similar, I think of a similar thing to hooks,

• 37:20Speaker 00

  where hooks make it possible to build very safe custom pools that have very limited, you know, functionality. Very, you know, a hook that changes how fees work is very different from an entire AMM that changes how fees work in terms of like you're starting. Point and what you and how easy how easy it is to build, how fast you can build it, how easy it is to audit, et cetera. And so, you know, all care to here, we're trying to make it, you know, as safe and easy to innovate. And then the point being really just like, we're also trying to, you know, we do expect there to be some additional fragmentation, but we're all, but we still expect showing points to happen and we still,

• 38:00Speaker 00

  and we're basically taking the the cost of fragmentation is being significantly reduced, not increased.

• 38:06David Hoffman?

  So there are some really strong parallels between Uniswap V4 and the Ethereum roadmap. I see the parallels here. I'll call this like a hook centric roadmap for Uniswap, whereas Ethereum has this like roll up centric roadmap. Uniswap has now a hook centric roadmap. And I want to get to that conversation, but I think we need to start there with the singleton contracts, the singleton design. Uniswap V3 and V2 and V1, I believe, all had this thing called a factory contract where Uniswap pools, Uniswap exchanges were spun out individually and they were all separate contracts. So if you made a new token and then you made a Uniswap pool to correspond

• 38:47David Hoffman?

  with that new token, that is a brand new smart contract on Ethereum that is the same contract as like the USDC Ether Uniswap pool, but it's still a separate contract. And so a singleton contract is something that's the opposite of that. Can you just unpack that a little bit more, Hayden? Like, what does it mean for everything to be under one contract?

• 39:08Speaker 00

  Yeah. So, you know, what it means is that we're duplicating the same code across a million different smart contracts and that has a cost to everyone. And so, you know, one one cool thing about the singleton design is it actually reduces, current estimates have it reducing the gas cost of pool deployment by about 99%.

• 39:24David Hoffman?

  Wait, what?

• 39:25Speaker 00

  Yeah, so it goes from like,

• 39:28Speaker 00

  Gas costs vary a lot, but you know, you could imagine sometimes people pay when gas costs are high, like north of a thousand dollars to deploy a pool, just in gas cost. And that same deployment would be something like $10.

• 39:39David Hoffman?

  Because you were just updating a pre-existing contract.

• 39:42Speaker 00

  Yeah, most of the code isn't being replicated, it's just like adding a little, you know, adding a little thing, like, you know, making a little modification to an existing contract. It's not deploying an entirely new smart contract. So gas costs for deployments go down massively. That's sort of like one of the advantages. There were designs that actually did reduce the gas cost for V3, but in ways that slightly increased gas costs for swappers.

• 40:06Speaker 00

  You know, that was sort of like this design a lot of people use where you like call out into like a library contract, but that's sort of like one of the benefits of Singleton. The other benefit is that when you, you can imagine like transactions that interact with multiple pools and have multiple interactions with multiple pools. A lot of what they're doing is they're updating like the same, you know, like, you could imagine like, let's say I'm doing like a multi-hop swap, I'm going like ETH to DAI to USDC or something. That actually involves like, you know, routing ETH into the ETH-DAI contract, then DAI is sent from the DAI-ETH-DAI contract to the DAI-USDC contract, converted to USDC, and then USDC is sent back to the user.

• 40:46Speaker 00

  When you have everything stored in the same contract, those internal transfers don't actually need to happen, right? They're sort of like ephemeral. And Ethereum already today has a method of basically, if you are updating it, so, so one thing is that there's basically like less, less transfers happening under the hoods when you have like multi, multi-step transactions or transactions that route between many pools. Ethereum has like a, this thing called a gas refund. It's super technical under the, under the hood stuff, but might as well, for, for, for those who, who understand us, mention it quickly. Ethereum has a thing called a gas refund, which basically means that if you are updating, you know, something and then you, the same thing multiple times is cheaper than, than basically, you know, updating different things.

• 41:32Speaker 00

  Because, you know, there's like, that's easier on, on a Ethereum node essentially.

• 41:37Speaker 00

  And we'll get out of the weeds in a second. But the refund has like a cap. So basically, there's like a limit to like, if you update the same thing like a thousand times, like the refund sort of runs out and then you basically don't actually get any of the refund. So there's this new proposal called transient storage, which is slated for the next Ethereum hard fork. And that provides additional benefits where you can actually, you know, save on gas for things that are, you know, updating the same contract multiple times, well beyond this sort of refund, which was capped out at 20% of the of the sort of gas provided to the transaction. So there's sort of like additional gas savings, kind of like on the forefront of the next Ethereum upgrade, which is kind of exciting.

• 42:18Ryan Sean Adams?

  Am I misremembering that? Was there some controversy about this particular Ethereum upgrade at all? Or like, you guys, you guys refresh me on that.

• 42:27Speaker 00

  I think that like, there was a desire. I think that it was like a very, it's like a very obvious, I don't think there's any controversy around like the proposal itself. It's like technically very sound and like, there's no real controversy around it. I think that there was like a strong push to have it happen in the previous hard fork, which didn't happen, in part because we thought it was like an obvious win for developers. There's many other projects that also want this and want to build on top of it and have come out in favor of it. And but, you know, it ultimately didn't make into the previous Ethereum hard fork because there was, you know, that was the, there was a lot of other things happening in that hard fork. But it was sort of very non-controversially added to the most recent one because, you know, it's very far along and it's not competing with the merge.

• 43:08Speaker 00

  And so it's, yeah, you know, it was kind of a little bit of like a day of drama on Twitter, but it wasn't really like, at this point, it doesn't feel controversial at all.

• 43:18David Hoffman?

  So I want to see if I can get Bankless listeners' heads wrapped around this pattern that I'm seeing with Uniswap. And this is, again, goes back to the whole like hook-centric roadmap for Uniswap. So a while ago, a long time ago, Ethereum's long-term vision came to be defined as like this roll-up centric roadmap, AKA like roll-ups are going to be treated as a primary concern for Ethereum's design philosophy. The just Ethereum researchers came to the conclusion that roll-ups are like the ultimate form of expressive apps for Ethereum in terms of scalability. And so the idea was that Ethereum would constrain the layer one. Push complexity to the edges using rollups. And this became like the modular Ethereum design philosophy.

• 44:02David Hoffman?

  The Ethereum Layer 1 does not need to be concerned with doing it all. And that role can be pushed to the open source community, building permissionlessly in the free market, which is why we have so many rollups teams, building different rollup scaling strategies. Polygon, Optimism, Arbitrum, ZK Sync, you know, all the Scroll, Tyco, all of these crazy things. And the only reason why all of these Ethereum microcosms exist is because of the primacy of the rollup-centric mode map for Ethereum. I see that same pattern playing out with Uniswap. So I think, I want to check this metaphor with you Hayden, make sure this is right. But I think Uniswap V2 and V3, where we had this deployer contract, this factory contract,

• 44:45David Hoffman?

  that spit out new Uniswap contracts that were all disconnected to each other, is like the cross-L1 bridge version of Layer 1s. Whereas the singleton contract is like the rollup-centric roadmap for Ethereum, because everything is placed into the singleton contract. Everything is under one platform. There is a very constrained, reductive base, call it Uniswap V4 pools. And then there's hooks, hence the hook-centric roadmap for Uniswap. These are my words. I don't know if Hayden accepts these words. The hook-centric roadmap for Uniswap places complexity back into the base of Uniswap V4 via hooks. And hooks are freely developed in public.

• 45:30David Hoffman?

  They are highly generalized for all public pools to use. Or they can be pool or use case specific, kind of like roll apps or app chains. But we can have hooks that are just meant for one or a few pools. Or we can have hooks that are generalizable. And so now we have modular Ethereum, and now we also have modular Uniswap. Hayden, do you accept this metaphor? Would you throw any flags?

• 45:52Speaker 00

  I accept the metaphor. You know, I think that definitely like we are definitely going to like modular customizable Uniswap. And I'd say that like it's not as like Ethereum, it's not turn complete the way Ethereum is. But it's much more expressive and it's, you know, if you have like a gradient of turn completeness, it is more turn complete than Uniswap V2. It's more expressive and really you can do a lot of things with hooks and we are definitely pushing complexity to the edges. We're definitely, you know, encouraging a world of other people to try like, there's no clear single way to best way to scale Ethereum. And so Ethereum is, you know, allowing other people to experiment with the best way to scale Ethereum. And, you know, I'd say that Uniswap, you know, very similarly, there's no single best pool design.

• 46:34Speaker 00

  We're enabling a whole world of experimentation. So definitely like the metaphor lands for me in that way for sure.

• 46:43Speaker 00

  I'll also mention just casually, not don't want to open a whole can of worms with this, but like technically Uniswap is also on a roll up centric roadmap and that we all are because Ethereum is on one. And so I think that that's definitely like an avenue of future exploration, but sort of like kind of parallel to before.

• 46:59Ryan Sean Adams?

  Hayden, while we're on rollups for a minute, can you also describe Uniswap's approach to all of the various rollups? I know that's kind of orthogonal to our conversation today about Uniswap V4, but will Uniswap have a presence on all rollups or how does that work?

• 47:18Speaker 00

  Yeah, I think that, you know, like we're all on this, we're all on this rollup centric roadmap journey in Ethereum right now. And I think that we've been, you know, to date, it's really been about like supporting the rollups, you know. On the protocol level, it's, you know, there's been this whole process around governance and people are, you know, doing votes to deploy to different, different chains.

• 47:40Speaker 00

  But, you know, within, and within Labs products, we're kind of like supporting chains as there are like, you know, ones that are have users. And it's like, almost like worth the time to do the work and it is a lot of work to support new chains in our, in our products.

• 47:53Speaker 00

  But yeah, so it's really a bit about like, just making sure that Uniswap is on all the chains that get traction and have usage.

• 47:58Ryan Sean Adams?

  And Uniswap V4 would be on all the chains that which.

• 48:00Speaker 00

  And yeah, Uniswap V4 similarly would be on all the chains. In terms of like, if there's a future like world where there's like a Uniswap specific rollup or something like that, I think that sort of like remains to be seen. I think it's like a really interesting avenue of exploration, you know, the sort of whole like, I'm personally excited by like some of the like op chain vision and all that stuff, but. And you know, as I mentioned, we're kind of like all on this rollup centric roadmap. There's no like getting off it because Ethereum's on it. Sometimes I think that people almost don't even like internalize everything that that means. But yeah, it's it's a it's a pretty cool, interesting direction for Ethereum. I think that maybe what I what I was getting, I think that there's like a lot like scaling execution is actually pretty hard.

• 48:42Speaker 00

  And there's like, it's gonna, I think, take, I think it like, kind of makes sense that Ethereum pushed that to the edges. But I think that sometimes people almost like underestimate how much that work there is to do on the rollup side and how many like, how big of an effort that is, right? It's kind of like, in the long run, maybe it's like more of an effort than like building Ethereum itself to like, build the right rollups on Ethereum. Anyway.

• 49:03Ryan Sean Adams?

  Yeah, I completely agree. I mean, part of modular Ethereum, the roadmap, rollup centric design roadmap was obviously focusing Ethereum on what it does best at the core and the consensus layer. But also, I mean, some of these problems are complicated. They're complex, they're thorny. And so, nice to push them up to other teams rather than have the Ethereum research team sort of do everything. I don't know if that's similar to your strategy with hooks, but I.

• 49:32Speaker 00

  I think that like, I think it like, it both makes sense, but like, there are like implications to it, right? Where like, the more you push to other teams, like, the less, like, there's sort of like, there are sometimes benefits of working in multiple layers of the stack. It's something that we've learned a lot at Uniswap is like, are even like, working, like, having a mobile wallet and having like a smart contract team and a protocol, like, having sort of working multiple layers of stack where you're like, able to kind of like, sort of innovate across the stack a little bit. And like, you know, there are things like, like, even like, it came up in this conversation where like, EIP 1153 is like, provides very significant benefits to Uniswap V4. And that required like, you know, it was sort of like already a proposal that happened many years. The initial proposal was like before the V1 launch. So this idea has been around for a long time, but like, it's sort of like this like.

• 50:17Speaker 00

  Sometimes there's like a, if you don't have the right like layers of modularness or in like some like, if you don't have enough expressiveness in each layer, like then like you sort of can run into like constraints of the system in which you're you're building. So like that's the risk of hooks. It's a risk of Ethereum's roadmap. But it's also like ultimately, you know, it kind of makes sense as well.

• 50:40Ryan Sean Adams?

  I get it. It's definitely a trade off though, right? It's like I was thinking of Vitalik's most recent post where he talks about the three transitions, by the way. He talks about kind of everyone moving to rollups. That's could be a massive transition for Ethereum that everyone has to move to smart contract wallets. And we have to somehow figure out how to get privacy working. There is something nice about the monolithic vision. Because you can control all layers of the stack. And so like what gets what gets sacrificed or maybe trade off is the right word for this in a modular kind of structure is user experience sometimes. I mean, can be difficult to weave this all together. Whereas monolithic has other challenges, but you have the opportunity to get kind of user experience down.

• 51:25Ryan Sean Adams?

  Let's get back to kind of the the hook centric roadmap for Uniswap. Who's going to build hooks? Who are the who are the devs? Who are the builders that actually like we know in the in the rollup community? All of the teams building rollups and kind of the advantage doing that. They want to create their own kind of ecosystems, build their own chains, lots of reasons for doing this. Who are the builders behind hooks? What will they look like? What are they going to dream up?

• 51:49Speaker 00

  Yeah, there's so many possibilities and like we only we're kind of like constrained by like what we've already thought of. But there's like so many other like we kind of expect maybe the coolest hooks will be ones that we haven't dreamed up yet. So ones we've already mentioned are things like, you know, so obviously we've built a few hooks almost to like prove the system. So right, some of the ones we've already mentioned were like TWM and on chain limit orders and swap fees. I think.

• 52:14Speaker 00

  You know, we expect like probably one category of hook builder is like people who need, you know, basically people with, you know, projects with on-chain protocols that interface and interact with you. It's basically the people who build on Uniswap today, but they can build on it in like a more meaningful way. So like any, any like project that has Uniswap as like a core component of their system, we expect that they can build what they're building in like, in like a more efficient or more meaning, or more expressive or better way with hooks.

• 52:44Speaker 00

  And so that's sort of one category. I'd say that like people who want to, like anyone who like building an AMM today, I don't know, maybe they'll continue building their own AMM. It sort of depends. But definitely the type of people who would go out and build a new AMM, might be more likely to say, okay, well, rather than building a whole AMM, why don't I just like, you know, try it out as a hook? And, you know, so liquidity providers, I think, you know, DeFi builders.

• 53:09Ryan Sean Adams?

  Is it accurate to say?

• 53:10David Hoffman?

  Instead of starting your own Layer 1, why not just build a, roll up on Ethereum? It's the same conversation.

• 53:16Speaker 00

  Exactly.

• 53:18Ryan Sean Adams?

  Is it, is it accurate to say anybody who wants to use the verb swap? You know, in the, in the early days of Bankless, we used to talk about making all of kind of these money verbs, basically, you know, real and bankless. So verbs like, you know, lend, borrow, a verb that Uniswap has dominated has been trade or swap. Anyone who is sort of doing swap functionality is started as part of their application, whether it's a, some sort of aggregator, like a matcha, for example, maybe they're, they're dealing with swap. Anyone who's working with the swap verb might have something that they can build as a hook with Uniswap. So that kind of opens the door to basically any application that needs this basic trade swap type primitive.

• 54:03Ryan Sean Adams?

  Is that correct?

• 54:04Speaker 00

  Yeah, I think I, I do like to think of like the two sides of the marketplace where it's definitely like swapping and also like creating liquidity in the first place.

• 54:10Ryan Sean Adams?

  I always forget about liquidity providers. Yes, they're important.

• 54:12Speaker 00

  They're, they're an important bunch, although sometimes, you know, not talked about as much as the swappers. But creating liquidity, anyone who's creating liquidity in any way, like I'd say that like this just provides so much more flexibility in how you do it. Now, it's very possible that like certain hooks will be much, like a few hooks will rise up as like the most popular used hooks. You know, if I had to like take some guesses, things like, you know, some of the ones I already talked about might, might be examples like.

• 54:37Speaker 00

  So certain hooks might be like the most used and maybe like most people interact with hooks just by like adopting a few common ones that like change in meaningful ways. But then yeah, like really anyone that creates liquidity might want to create liquidity in more expressive, interesting ways, as well as like anyone building a protocol that needs swapping functionality. Yeah, I could give like a few more examples of hooks that we've talked about and thought about or built examples of.

• 55:01Ryan Sean Adams?

  Yeah, go for it.

• 55:02Speaker 00

  To help spur some of this. So I guess, you know, one example is even like, this one is more theorized. We don't have an implementation of it at the moment. Is so at any given moment for a Uniswap trade, there's like, you know, Uniswap V3 split the pools up into like discrete ticks. And then like, there's like liquidity exists between ticks and it's almost like many Uniswap pools for each, split up into each tick.

• 55:29Speaker 00

  And, you know, we sort of theorized about like the idea of like vaults that stored out of range liquidity and lending protocols and would sort of like pull them out and when, as the trade got closer. But that wasn't super easy to do in Uniswap V3 because you don't sort of have a guarantee that you can pull liquidity out of the lending pool before the trade, you know, crosses a certain price. Whereas with Uniswap V3, you actually can, or before you actually can using a hook. And so an example is just like increasing your yield where like all liquidity that's not stored in the current tick could be stored in a lending protocol and earning, you know, whatever it's earning. And then as the price crosses out of the tick, just in real time, could pull the liquidity out of the lending pool and, and start trading into it.

• 56:12Speaker 00

  And in that way, you don't actually have to like, there's sort of like the risk in V3, if you do it externally, that like you, you don't pull liquidity in time and it sort of gets like, you know, rebalanced in a way you weren't expecting or something, if you were to try to do something like that. So like increasing your yield by, by building a thing that, you know, stores extra liquidity lending pools, but does have a guarantee that it will be executed at the time, that it will be, you know, included in the contract at the time of the swap is like one pretty interesting idea. We haven't built this, but we know it's possible. I think this is an interesting class of designs that might come up. This might like, you, probably most of these will like use the, the swap fee hook, but

• 56:54Speaker 00

  just like attempting to, to internalize MEV better for liquidity providers. You know, there's sort of like a lot of. Liquidity providers, a lot of like value is kind of like, they're sort of, you know, people always talk about MEV and how do we like kind of keep more of that for our swapbers or for our LPs. And I'd say that like, there are definitely classes of hooks that can attempt to do that, whether by like adjusting the swap fee in real time, or proportional to size of trade, or whatever it is. You can, you can even do things like auctioning off, like, like basically allowing people to like, you could almost do like a harbor tax or something for all fees in the pool. And so basically, it's like, kind of like, again, this is like sort of theoretical. We haven't built this. We haven't like proven it. But these are sort of like general places our brains have gone. It's like, you could allow basically anyone to set the fees for a pool, and they could pay liquidity providers

• 57:39Speaker 00

  for that, right? And then you could imagine in that way, like, you know, the MEV is sort of internalized into some degree by like properly setting the fees and, and paying, paying it out to liquidity providers. So those are like, maybe two even like kind of more complex examples. But I think just like, there's like so many different kind of ideas and designs in the AMM space. People are always talking about them. We're always having them. But today, we like, it's never worth it to build it because it's like, we can't bet, like, we can't build the entire next version of the protocol around one of these ideas. They're, they're just interesting ideas. Oh, I'll mention another category of hook that exists is actually potential withdrawal fees as a hook as well. So fees

• 58:23Speaker 00

  take, like today, fees are only taken on swapping. In before, it's actually possible for hooks to take fees on adding and removing liquidity, which is, and could like sort of redirect those back to LPs. And so in that way, you could kind of like, for example, like have like, you know, more, the more active a liquidity provider is, like, maybe like, like, you could sort of like have some of those, more of those fees go to passive liquidity providers. And maybe passive liquidity providers would be more willing to provide in those pools. Those are like, sort of like, some kind of additional examples. I think that there's like so many, though. Any project that needs an oracle probably will be tempered. I think that like even V2, like V2 and V3 oracles, they weren't just like opinionated.

• 59:04Speaker 00

  There are also weaknesses of them because they were, they were like opinionated in that we implemented them, but they were kind of like trying to be very neutral in what they were because they were trying to serve all possible oracles. But that's not very, you know, maybe the best oracle is removing outliers and doing on-chain medians and all these other things. And so anyone that wants an oracle now, you can actually build your oracle into a pool and you sort of have a guarantee that that oracle is like, that that pool is like tracking. It's sort of the difference between like a, you know, you could build an oracle external to a pool, but that pool can only like read from the pool at moments where it is like asked to do so. Versus when it's in a hook, you have a guarantee that that oracle can be updated at every swap

• 59:49Speaker 00

  or at every provide liquidity or at every interaction with the pool. And so you sort of have a guarantee that that oracle can always be super up to date. And so, you know, you could think of it as like any contract that needs to be updated with, you know, any specific type of interactions with a Uniswap pool can now be fully up to date. And, and sort of, kind of, it doesn't need to rely on like being poked externally by people, which is, which is like kind of interesting.

• 1:00:16David Hoffman?

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• 1:02:24David Hoffman?

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• 1:03:07David Hoffman?

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• 1:03:51David Hoffman?

  secure, fast, cheap, and friction-free. There's something that you said that I just want to double down on because it just gets me really, really excited. You said that you and other people at Uniswap Labs, and I'm sure just anyone that you talk to about nerd stuff about Uniswap, like all of these ideas of what could be placed into a pool, Uniswap V3 didn't have a way of receiving those ideas. And so every time you all are having your surreal futurist daydreams about what a crazy Uniswap V4 pool could be, I'm just bullish on the fact that Uniswap V4 can actually receive those ideas now. Because whereas Uniswap V3 was constrained in its ability to accept expressivity,

• 1:04:36David Hoffman?

  Uniswap V4 can now start to get pretty crazy and pretty weird. And so that makes me bullish.

• 1:04:43Ryan Sean Adams?

  That's what's interesting. Exactly. That's what's interesting about this, Hayden. Even the word choice that you're using, you're calling these things hooks as opposed to maybe widgets or as opposed to apps or something like that. And I guess, look, I'm not a programmer. I'm sure the term hooks is used in all sorts of other places. The area I'm familiar with it is in CMS platforms like WordPress, right? Which is like, and WordPress is this kind of ecosystem where anybody can Kind of create a hook in WordPress. And like hook is not like, it's not a specific app. It implies kind of openness. It implies permissionlessness. It implies anyone can develop it and it could. It's broader than an app.

• 1:05:28Ryan Sean Adams?

  It could do something very small, like implement a captcha service on WordPress. Or it could, it could do something entire very big, like implement an entire, you know, feature set on top of WordPress. And so I'm curious what other like, maybe an analog to this in another developer ecosystem. Why did you use the term hook rather than app or rather than widget or something else?

• 1:05:56Speaker 00

  I mean, I think you nailed it like beautifully said. I think it's like, you know, it's, I mean, part of it is it's like moments at which the contract like, it's not, it's sort of like, kind of a moment where the contract can like call out to another. Like it's sort of like, there's sort of like moments where you can like inject code in an arbitrary point. And hooks just felt like a good kind of moment for that. Versus like a widget or an app sounds almost like marketing or like branding. This is sort of more like, you know, a low level code base kind of feature. So that's part of it. I could mention even like something here quickly on like the history of how we came up with hooks. I don't remember actually specifically who like, it's sort of, it's been an idea that's been in our brain for a while. But it came out of this idea that we had had, this was before V2.

• 1:06:37Speaker 00

  One of the features we were considering in V2 was a external contract that basically had the right, like sort of first back running rights to the, to every trade. And what I mean by that is like, you know, when someone is making a trade that moves the price from away from, from the market price, you know, away from the market price, it's sort of like a back running kind of opportunity. And, you know, giving back running rights to, to, if you are sort of like auction off those back running rights, then you can sort of give, you know, some of the profit back. Like you can basically reduce the kind of price impact of a trade.

• 1:07:15Speaker 00

  And this is sort of a design space that is still very relevant today. You hear the Flashbox team talking about it. You hear, you know, it's something that people talk about when they talk about like intense. Right. It's like, like, how do we kind of reduce MEV? And so we had this sort of, you know, general concept of like, what if at the very end of every Uniswap V2 swap, it arbitrarily called a specific contract and that specific contract had, you know, was able to, if, if, you know, with preset prices built into the contract, would be able to kind of like trade back in the other direction and then like reshare some of those profits back to the swapper. And, and then maybe like you'd sort of like auction off that, that external contract. Now, we call this like idea like Trader Dow or something.

• 1:07:56Speaker 00

  And it, it's sort of an idea in the back of our brains for like, you know, literally since before V2 launch. And, you know, I, I think that's sort of that, like, the, like, the idea of that feature where it's like, at the end of every swap, do this. And then we, we sort of ran into that pattern again with the oracles where it's like, as like, at the beginning of every swap, if it's the first swap of a transaction, if it's the first swap of a block, then update the oracle. And we started to realize there were like, are multiple points within the transaction's lifecycle, where you like, wanted to do arbitrary things sometimes. And so that's sort of like where hooks came from is like, let's like, it came out of this like idea of like, oh, there is a time in a transaction lifecycle where it's useful to like, immediately execute some other code and not allow any other code to execute before that code.

• 1:08:42Speaker 00

  So that's sort of like where some of this like comes from historically and.

• 1:08:46Ryan Sean Adams?

  And now those ideas like the Trader Dow idea, that can be implemented as a hook.

• 1:08:49Speaker 00

  Yeah, yeah, exactly. And like, maybe it was a good idea, maybe it wasn't, you know, it's sort of like a, you know, 20.

• 1:08:55David Hoffman?

  Now we can find out.

• 1:08:56Speaker 00

  Like 2019. Yeah. I think that like, even if we were doing it today, we'd probably do it very differently from how I just described it. But like, um, yeah, you know, now we can find out now we like, anyone can run, you know, and experiment in AMM designs much faster, much more easy.

• 1:09:14Speaker 00

  So super, super exciting.

• 1:09:16David Hoffman?

  I'm just gonna put on my speculative cap here and I bet you there is a bunch of use cases for token minting and token issuances that I'll probably not ask Hayden about and I'll just leave that to the imaginations of the listeners. But there's probably a way to do a token issuance with this as an app on Uniswap that is developed by the open source community. Hayden, I have a-

• 1:09:39Ryan Sean Adams?

  As a hook, we should say.

• 1:09:40David Hoffman?

  As a hook, as a hook, yes. Right. I have a question about some of the bigger pools. So it makes the Uniswap V4 with, you know, specific hooks that do specific things, sounds like from the individual developer standpoint, awesome. As in, I can do cool new things that I was never able to do before. But some of these bigger pools in Uniswap V3 have a ton of liquidity in them, like the Di Ether Pool, the USDC Ether Pool. And if we are assuming that we can make a better V4 pool for these very large V3 pools, we're gonna actually need to get that liquidity to migrate. And it's gonna, it's an open, interesting question

• 1:10:20David Hoffman?

  as to like, how do we determine what, who decides what the best USDC Ether Pool is on Uniswap V4? And how do we even have like a shelling point of like, hey, Uniswap V3 liquidity, go to Uniswap V4, it's better now? How do you think we're gonna get this to progress? Like, how do you think, do you think we are stuck inside of some, some pools are stuck inside of Uniswap V3 forever? How will we get migration to happen? Do you have any thoughts on this?

• 1:10:43Ryan Sean Adams?

  By the way, I remember being really worried about this with V2. And I was like, well, how are they gonna get all the liquidity to move from V2 to V3?

• 1:10:50David Hoffman?

  Well, V2 to V3 was a paradigm shift in liquidity expressivity. And that, to me, that made sense because of concentrated liquidity. With this one, I'm not, I don't know. I don't know.

• 1:11:02Speaker 00

  Yeah. I mean, for what it's worth, like the Unisox Pool, the biggest Unisox Pool is still in V1. And so, yeah, I think that like the answer is like a combination of things. It's like a really interesting, complex topic, but like, you know, I'd say that like V1, you know, V1, almost no one uses only, it's mainly only used for Uniswap trading at this point, uh, which is, which is pretty fun. Um, V2 still actually gets a lot of usage and, and new pools created. Um, V3, obviously even more usage, just especially by volume.

• 1:11:31Ryan Sean Adams?

  Because we should tell people, just, just for the listener who's not familiar with how Uniswap works, is the contracts never die. Once you deploy V1, V2, V3, they live forever. They're out there, anyone can use them just like as the day they were first deployed. They, they don't go away. So almost like a new version of Uniswap has to earn its place in the, in the world, earn its liquidity, has to earn its swap users, has to earn the market, doesn't it?

• 1:11:57Speaker 00

  Yeah. So I'd say that like with V3, what's really interesting, I've talked about V4, um, I actually don't expect as fast of a migration as from V2 to V3, um, or from V1 to V2. I think it will be, you know, probably a little bit of a slower migration, but that, like the long-term network effects of the sort of gas improvements of pooling liquidity within a singleton contract, like basically like maybe the initial liquidity pools in V4 will really be like specific use cases that, that need to use, uh, you know, a Uniswap V4 hook. But the more of those that start to get created, the more liquidity that starts to get, you know, in this singleton contract, suddenly like you can create an identical pool, like you can make the same trade-offs V3 did in V4 and, you know, you'll now have more efficient routing against other V4 pools.

• 1:12:40Speaker 00

  And so I'd say that like over time, the sort of like shelling point of, of the singleton contract and, and the benefits of pooling liquidity will, will, will win out. And so I do expect like a slower migration relative to V2, um, just because it's like more complicated, there's more things happening, there's like, it's a bigger ecosystem. V3 is like extremely efficient, uh, relative to V2. There are a bunch of other improvements to Uniswap, in Uniswap V4 that I haven't mentioned yet, which might be a good, now, now might be a good time to mention some of them. Because I think that they get at, uh, some other kind of reasons to migrate. Still kind of relating to like gas efficiency and, and shelling points. But, um, I said that like, uh, so maybe in no particular order.

• 1:13:25Speaker 00

  One interesting, so one, we support native ETH pools again. So V1 had native ETH, every pair was, every token was paired against native ETH. So maybe a context for, I guess, Vinkless listeners who don't know. There's wrapped ETH, which is ETH that is a, you know, represented as an ERC20 token. And then there's native ETH, which is like the native token to the network. And transferring native ETH is about half the gas cost of transferring wrapped ETH. But it doesn't, you know, it can't be used in certain smart contract patterns. In the name of like, kind of like code simplicity, we moved to only wrapped ETH pools. Because it allowed you to treat ETH and wrapped ETH, it allowed you to treat ETH as an ERC20 token.

• 1:14:08Speaker 00

  And you didn't need like a whole separate code base for that. Or, and so, but with Uniswap before, we were bringing back wrapped ETH, or native ETH pools, which do provide significant gas savings for transactions that are, you know, buying and selling ETH. So that's one benefit. Another benefit is, so another kind of interesting feature that is kind of like, I'd say cute. It's not like game changing, but interesting is you sort of allow, we actually allow, we've kind of taken the flash accounting stuff I talked about, right? Which is like, oh, like I kind of can do a whole bunch of things and I only transfer some amount of tokens in, some amount out, and everything that happens in the middle can sort of be reconciled.

• 1:14:49Speaker 00

  With Uniswap before, we actually, that was almost a lie because you actually don't even need to transfer tokens in or out sometimes. And what I mean by that is that if you buy a token and your only intention is to sell it in the future, there's no reason to actually transfer that token back to your wallet. If you want, you can actually just leave it in the, so the same way that like pools are separated out by like internal, by like internal accounting. You can actually leave your tokens you buy inside the Uniswap Singleton Contract and sell them later. And if you do that, then you actually don't need to pay the gas cost of transferring them out of the Singleton Contract. There's still some cost of updating the internal balances, but it's lower.

• 1:15:31Speaker 00

  So there's sort of like a nice little benefit there where if you're buying a token only to sell it, you can actually have additional gas savings. So there's a bunch of these features and actually when you add them up, if you imagine like a native ETH pool and you remove the oracle and you have like, maybe you even like buy a token with ETH and then you sell it later for ETH and you never take that out of the pool. You could imagine that across all of that, there's like really, it's possible. You could have a contract that has no hooks, removes the oracle actually, so it's actually less features than V3. And using native ETH and you actually have like very significant gas savings. We don't have like actual, I'm not going to say any numbers because we don't have any gas benchmarks and not all this is, or maybe we have some, but they're still kind of like, the codebase isn't even frozen yet.

• 1:16:16Speaker 00

  So we're not ready to like, you know, be hyping up gas numbers. But the general point being like, there's actually very significant gas savings to be had here for certain use cases. And so that also, you know, could be a reason to move liquidity because lower gas for swappers means, you know, more trading volume means more fees for liquidity providers. And so that could be another reason.

• 1:16:35David Hoffman?

  I think why this feature I think is unique, even though it's small, but it's big at the same time. The idea of you can actually leave funds inside of the Uniswap contract. It really emulates a centralized exchange, but in DeFi with all the DeFi values, right? And so in the same way, I can send my USDC or my Ether to Coinbase. I can now send my Ether and USDC to the Uniswap contracts, DeFi contracts, and they can exist inside of the limbo state of Uniswap. And then if I'm a trader, I can do a bunch of trades and then I can withdraw my crypto assets later. And the cool thing about this is that it's DeFi. There's no central custodian, it's all protocols, it's all smart contracts.

• 1:17:17David Hoffman?

  There's no one I'm trusting with my funds, except for the contracts themselves, except now it's on-chain. And so this makes, to me, for traders, I would actually Be primarily very, very interested in this because of the gas savings. Like, I'm sure one of the big reasons why people still host their money on centralized exchanges, leaving it up to the trust of humans that run these exchanges, is because of the UX and fees that are reduced in the centralized exchange world. But if you are able just to leave your money inside of Uniswap, they charge much reduced gas fees and have those assets ready to trade on a moment's notice, like the UX of a centralized exchange would give you. This starts to make Uniswap very competitive with centralized exchanges on a vector that it has never actually been able to compete before.

• 1:18:03David Hoffman?

  So it's a small thing, but I'm wondering if it's actually like quite a, quite a big thing. I'm wondering your perspective on that.

• 1:18:09Speaker 00

  It's sort of, the reason that I'm not making it like a massive thing is because it's still like on a relative, like it's like relatively cheaper, but it's not like, it's not like centralized exchanges is like no, you know, it's, it's just like a spreadsheet, right? So it's like, there's no gas cost to transactions, except for depositing and withdrawing. Here there are, it's just, we're trying to reduce them as much as humanly possible to, to, you know, we're, we're trying to like reduce the, the, the costs of using DeFi and using decentralized exchanges by, by finding every gas, you know, optimization we can. And this is one of them. And so I think like the net result of all of these changes is that it is possible to have, you know, we, we hope for very significant gas savings. You know, all, all said and done. But, but I don't want to promise like centralized exchange level, you know, scaling, because there's sort of like no gas cost at all there.

• 1:18:54Ryan Sean Adams?

  Hayden, when you add all these things up, all of the, the features that we've talked about today, you know, hooks being maybe kind of the, the bright shiny object and, and one of the, the most interesting things out of this conversation. How, order of magnitude level, how big is this change? Is this like the difference between V1 and V2, or V2 and V3, or V3? Like, like how, how big is this compared to previous Uniswap version releases? And you guys have decided to call this four rather than, you know, a 3.5 or some kind of a point release. How big is this in the scheme of things?

• 1:19:34Speaker 00

  You know, it's, I think that like, kind of on its own with like, just like, if you just like, if you ignore all the like, the hooks that are going to be built, right? It's like, you know, it's only so much better, right? Like, all the other changes are like, somewhat marginal, but when you like, imagine it's all like, but like, you know, five years from now and everything that's been built on hooks, it's, you know, uh, my, my, my hope and expectation is that it is a V2 to V3 style, a leap, um, more so than like a V1 to V2, although, you know, I think that each version of Uniswap has been legendary in its, in its own right. And I, I, I think that, you know, the reason that we, we think this should be called V4 is because we think this is like a real, you know, it's like a massive step forward and, and, you know, I, I don't, I don't, I don't know how to put multiples on it, but like, I'm, I'm kind of feeling the 10x, you know?

• 1:20:19Speaker 00

  But, uh, so, so yeah, extremely excited about Uniswap V4. I think it's like, has just like so much potential and it's such a powerful, you know, uh, powerful developer platform even for, for, you know, innovation and, and building uh, on top of liquidity layer, you know? So, I don't know, I'm extremely excited.

• 1:20:35Ryan Sean Adams?

  Another 10x gets us to 15 trillion, I might point out. So, uh, that, that would be quite sizable.

• 1:20:41Speaker 00

  Yep.

• 1:20:42David Hoffman?

  Well, the, I think the reason why this can be measured as a very big deal is it seems to be an update that allows Uniswap pools to continue to update without needing another V5. And so, we can have improvements to the Uniswap protocol naturally or smoothly emergently, without ever having to actually make a Uniswap V5, because now this can come in via hooks. It's kind of like-

• 1:21:07Ryan Sean Adams?

  Oh, so we're done? You know, we have- We found the end of the roadmap then?

• 1:21:10David Hoffman?

  Well, that's what I said about a V3 and then we got V4, so I don't know if Hayden's ready to make that promise, but it does seem to be like, hey, first we had analog cars running on combustion engines, and then we got electric cars that had over the air software updates, and this kind of feels like a transition to that.

• 1:21:27Speaker 00

  Yeah, for what it's worth, V1 and V2 each lasted a year. V3 lasted two years, and so, you know, maybe this one lasts like three years, right? It's hard to say, like, I don't have like a, you know, a 10x. Well, I say that like, look, we have ideas for where things could continue to iterate in the future. I think that like, probably, like, you know, this is like a huge step forward in the next one. I think like, future ones have to be more like, if there are like future 10x's or whatever, they're probably like more tightly coupled to like, layer two kind of roll up, like the sort of like Ethereum roadmap and like, how, you know, blockchain scale in the future, if that makes sense.

• 1:22:08Speaker 00

  But this feels like a really obvious, huge win and next step that we're incredibly excited about.

• 1:22:14Ryan Sean Adams?

  This is very exciting, and I think Bankless listeners will definitely be excited about this. And as we draw to a close, Hayden, I want to ask you the question about kind of zooming out. So, we've been in bear markets before. I think Uniswap very famously was born in one of the burst, worst, the worst bear market that Ethereum has ever seen, is the 2018, 19 bear market, when Ethereum certainly was dead, and everyone thought crypto was dead. What's going on with DeFi these days? I mean, is DeFi kind of, has it peaked? And it's just sort of steady incremental growth from here? Are there any big innovations left? Just zoom out and tell me about the space, because Uniswap has been one of the forefathered

• 1:22:59Ryan Sean Adams?

  protocols, I would say, this entire DeFi movement, and you've been a huge piece of that, Hayden. So, what do you see right now? What is the future for DeFi?

• 1:23:08Speaker 00

  Yeah, so I guess one place I'd start is that, to me, it's less about like fancy new, like shiny new things. I think that like, at times, DeFi has sort of been like made about, being about these like shiny, shiny objects. And to me, it's really about like, doing very simple things better and exposing like, benefits to users. And so, you know, like- Swapping, right, like Uniswap has kind of for our entire, you know, for the past five years, right, I've been like working on like, how do we make swapping better? Swapping is like a relative, like conceptually, a relatively simple thing, right? I want to convert one token to another and I want to, you know, and that's sort of what we've been iterating on for five years straight. And there's definitely like cool, interesting finance, you know, complex financial parameters, but for me, it's always about like doing the simple things better.

• 1:23:50Speaker 00

  And, you know, keep it, keeping kind of doing it better until it becomes, you know, actually better, you know, until like it can provide more tangible benefits like in the real world, right? Like, like, how do we make it, you know, you know, like to, I think that at times like we can talk about like, oh, no one controls it and that's great. It's like, but we also need to make it like useful and usable and put it in people's hands. And, and we're kind of like iterating our way to getting there. And so I think that like, it's really not about like the sexy things. It's about like, just like constant progress towards, you know, making it more, you know, making it cheaper, making it easier to use. Like, those are like the two, like, like cheaper, easier to use, like, and just like constantly kind of pushing on that and, and pushing on that until we like actually get to a system that like, you know,

• 1:24:34Speaker 00

  where like maybe like Uniswap is used to, to, you know, let's say that I'm someone in the US and I want to, you know, send money to, you know, let's say it's like someone in the US wants to send money to their family in Mexico. Like, you know, ideally that should be built on DeFi, but DeFi isn't there yet, right? People aren't using it yet for that. And so people eventually have to be built like applications on top of it that are better. But like, there's still a lot of like, we're like in the super early days. And I think that like, people want it to be in the late days. But people want it to be like, you know, production use cases where like hundreds of millions of people are already using it. But we have to, you know, there's a lot of work to get there, right? We're like still learning how to scale blockchains. We're still like learning how to make like, you know, AMMs have only been around for, you know, five-ish years, like as a technology. They're just like very new.

• 1:25:19Speaker 00

  And so we're just, you know, to me, like, The, you know, DeFi is like a long game of like steadily improving until it becomes like useful to more people. And I think it already is useful, right? There are already like initial early adopters and early use cases, but.

• 1:25:34Ryan Sean Adams?

  Hey, hey, I'm wondering if you think we'll get there, though, if your confidence has wavered at all. I remember there was a time where I, you know, I know you predicted that Uniswap and decentralized exchanges would eclipse everything in TradFi that we've seen from a volume perspective, be larger than S and P and NASDAQ and all of these things combined. Do you still believe that's the case? Do you think we have a chance here?

• 1:25:59Speaker 00

  Yeah, I mean, look, I wouldn't, I wouldn't like spend every, you know, like spend five years working on this. I'm like not even, it's like the only thing I want to work on today. So I'm like personally like still extremely optimistic about DeFi and where it's going. I mean, like for me, it's like, it's funny because people like look at like the last, like, you know, if you look at the like last one year, like maybe it's not like, you know, only in like a vacuum, maybe like, you know, it's easy to like be negative, but I think that like, you know, if you look at where we've come from, you know, even like a few years ago, there's just been so much growth in, you know, there's been so much like, you know, exploration of the technology. There's more usage now, even like post FTX, you know, decentralized exchange market share has gone up relative to centralized exchange like significantly.

• 1:26:44Speaker 00

  It was sort of recently at like an all time high of, you know, decentralized exchange versus centralized exchange volumes. And so we're starting to see like even within crypto, like more of a shift towards, towards decentralization. I expect that to continue in terms of like TradFi and so planning that like, that's like a longer, kind of a longer game. And it's really about like, I guess to me, like, I think that there are like fundamental advantages of this technology. And when we can, you know, package them up and expose them to people in like a tangible way, I think that like they'll like, you know, sort of kind of by definition win out, but it does take like, it's not going to happen overnight and it's not going to happen like, you know, in a few weeks, right?

• 1:27:27Speaker 00

  It's like, it's going to take some time, but I do expect like kind of a steady, like there are more people using it now than two years ago. And there were way more and like, you know, orders, many orders magnitude more than like even like two or three years ago, right? So like. You know, personally, to me, like, the long-term trajectory is up and, you know, we're just like in the early days and that's what it's sort of all about. And so, personal confidence hasn't wavered. I do think that like, maybe to touch on like a thing, like something underneath that, that was like, I do think that like, when you see like scam, like, like, when you see like, things like FTX, like, are discouraging to new people in the space. They are like a little bit like, it's, I think that like, people in the space often like, sort of see, like, you sort of like, or even maybe even like Tyra learning, like a better example,

• 1:28:11Speaker 00

  or like, it was kind of like very obviously shitty to a lot of people, maybe, and, who, who are like, kind of diehard, early, like, you know, fans of DeFi. And so I think that, like, it can be like, tiring to like, have yourself represented by like, like, like, people often like, just like, look at crypto as like a monolithic industry. And I think it can be very hard sometimes on people in the space to sort of have like, the loudest kind of worst voices in the room, sort of be the ones that people kind of like, see us all as, as representative, like, see as like representative of our broader industry. Whereas I think that, like, the industry is, is pretty multifaceted. And there's like, people working on all sorts of things across the entire space. And like, there's like so many incredibly smart, talented

• 1:28:54Speaker 00

  people. And sometimes they're like getting less attention than people who spend, you know, hundreds of millions of dollars on, you know, stadium sponsorships. But, like, they're, they're real and they're happening. And so I think that, like, you know, I always try to encourage, like, nuance in these discussions. Like, it's not, like, I totally like sympathize with people who like, look at crypto and like, wow, it seems like a scammy industry. Because like, you see like, these like, very high-profile, you know, scams that have happened. But, you know, to me, like, the fundamental, like, it's all about like, that like, fundamental, underlying progress towards like, better technology and a better, you know, financial system. And to me, like, that is still like, progressing and improving and kind of like, on the right trajectory.

• 1:29:36Ryan Sean Adams?

  The trajectory, of course, is DeFi eating TradFi, DeFi eating the world. And that's certainly what you are building and the Uniswap team is, is kind of building with this next release. And we'll know we're close when NASDAQ and the S and P and all the larger exchanges of the world start building hooks on top of Uniswap V4. Hayden, it's been a pleasure to have you on Bankless. Thank you so much for joining us.

• 1:29:59Speaker 00

  Thank you so much for having me. It's been a pleasure.

• 1:30:01Ryan Sean Adams?

  Hayden, as we get to action steps here, I know you've got a blog post, a white paper, codebase. We'll include links to that in the show notes. Are there any other big action items that folks can take to kind of get involved and, you know, start doing things, maybe even starting to build hooks? Is it too early for that?

• 1:30:21Speaker 00

  It's not like, I mean, it's too early if you want a guarantee that there will be no changes, right? So like, you know, the codebase is not frozen, has not been audited, has not been finalized. And so if you want, if you are like, I just can't wait to get my hands in, I just want to experiment with it conceptually, then like, go for it. If you want like a kind of more like finished platform to build on, then like, maybe wait a little bit, maybe wait a few months. One thing I'll add is that like, if you think that you have what it takes to, you know, get some code into the, you know, core Uniswap V4 codebase, we have contributor guidelines in GitHub. I don't think that like, it's, you know, it's obviously still like a pretty complex codebase and isn't necessarily for

• 1:31:04Speaker 00

  like, super beginners to, you know, to do. But like, there are obviously like, this space has so many incredibly smart, talented, you know, smart contract engineers. And so if you, if you have a gas optimization, if you have, you know, a feature request or a improvement, create an issue, work on an issue, you know, by all means, read the contribution guidelines.

• 1:31:27Ryan Sean Adams?

  Open invitation there. And of course, we'll also include a, our previous episode with Hayden in the show notes as well. David, you have an action item too?

• 1:31:35David Hoffman?

  Yeah, the actually launch date of Uniswap V4, I believe, correct me if I'm wrong, Hayden, depends on an EIP being included. So perhaps there are some action items for the Ethereum devs to get included. Is that correct? Or is there, or is there a different launch date for V4?

• 1:31:52Speaker 00

  I think that like the the benefits of this sort of singleton and flash accounting that we think is is really part of our vision for where this goes does, you know, get like those benefits increase significantly. Once, you know, once this next Ethereum hard fork happens. If it, you know, so I mean, it's possible to launch a version without it or before it or only on layer two is something like that. But my my personal guess is that like this will happen post Cancun hard fork. That would be my sort of personal thought on like the best timing. I don't know if there's any action items there. It's sort of already there. Like, it's kind of already slated for

• 1:32:29Ryan Sean Adams?

  They're going as fast as they can. Okay, David, it's gonna happen.

• 1:32:33Speaker 00

  For what it's worth, we were, you know, we did, we did

• 1:32:35Ryan Sean Adams?

  I just want another reason to wait for the Cancun hard fork. Yeah, there you go.

• 1:32:39Speaker 00

  We did. We did. We did do some contribution to the to 1153. And, you know, definitely like, you know, support for it in like solidity, stuff like that also will be helpful. But

• 1:32:52Ryan Sean Adams?

  There you go. We got some things for action items for everyone. And I guess the main thing is during the bear market, the builders keep building and Uniswap is certainly building. So is Ethereum. So is DeFi. Hayden, it's been a pleasure to have you on Bankless. Thanks so much.

• 1:33:06Speaker 00

  Thank you for having me.

• 1:33:07Ryan Sean Adams?

  Risks and disclaimers, Bankless Nation, got to let you know, none of this has been financial advice, not trading advice, not swapping advice, not hooking advice. Crypto is risky. Perhaps some building advice. You definitely lose what you put in. Yes, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.