Uniswap-V2 (UNI-V2) is the successor to the wildly popular UNI-V1 protocol launched in late 2018.
Things move fast in the land of crypto, and you might be surprised to learn that UNI-V2 was only recently launched in May of 2020!
Building on UNI-V1’s Foundation
UNI-V1 undoubtedly laid a solid foundation for the current iteration of the UNI protocol. Along with the launch of UNI-V2 on the 19th of May, 2020, came the introduction of many new features and enhancements.
(Note: if the reader is new to the Uniswap protocol, it might be worth checking out my previous piece on the UNI-V1 protocol, available here: What Is Uniswap-V1?)
On-chain Exchange to the Next Level
UNI-V2’s most arguable defining feature is that all ERC-20 token swaps executed by the protocol enable trustless transactions, meaning all transaction (tx) data can be confirmed and called upon without the need to rely on a third-party.
Along with the launch of UNI-V2 on the 19th of May, 2020, came the introduction of many new features and enhancements. UNI-V2 brings a wide variety of upgrades and advancements to the protocol.
What’s New in V2?
Primary upgrades to the UNI protocol build upon the swapping and liquidity provision mechanisms first introduced by UNI-V1.
These new features include:
- ERC-20 to ERC-20 token swaps – ETH no longer needed. This reduces the tx count and helps to save on ETH gas fees.
- Price oracle functionality.
- Flash swapping – being able to “borrow” tokens from a liquidity pool (LP), execute an external tx, and pay back the borrowed liquidity in one tx. Because flash swapping transactions are atomic, this means the entire tx is reverted should any of the stages fail. The benefits of utilizing such a feature are primarily advantageous to users looking to execute arbitrage trading opportunities through leveraging LPs.
- Support of non-standard ERC-20 tokens – including popular tokens that are not adherent to the ERC-20 standard has solidified UNI-V2 as the leading solution for an on-chain DEX.
UNI-V2 also introduced an optional 0.05% protocol charge that can help to reduce the standard trading fee of 0.3%.
The UNI-V2 Rollout
Transitioning from UNI-V1 to UNI-V2 saw the protocols smart contracts rewritten in the programming language known as Solidity.
This transition in programming languages allowed UNI-V2 to successfully overcome the previous limitations of Vyper, the original programming language used to build UNI-V1.
The final UNI-V2 rewrite fell under the scrutiny of third-party audits and extensive testing before seeing any real-world stability. Moving from UNI-V1 to UNI-V2 saw development on a testnet to mimic real-world usage and pass thorough audits from reputable development teams such as ConsenSys Diligence (full audit found here) before a Mainnet release.
The meticulous task of carrying out due diligence on the UNI-V2 source code has likely ensured that no major bugs will be encountered through future interactions on the UNI-V2 protocol. Regardless, UNI offers a “Bug Bounty Program” for any major flaws that may be discovered by users.
