Unichain Dominates Uniswap V4 Activity After Launching Rollup-Boost Feature

Unichain, the Ethereum Layer 2 (L2) network developed by decentralized exchange (DEX) Uniswap, is commanding the lion’s share of Uniswap v4 volumes, driven by an ongoing incentives campaign and its new Rollup-Boost upgrade.

Uniswap v4, launched in January, is the latest iteration of the DEX, and Unichain has accounted for a majority of the protocol’s activity for the last month. Yesterday, May 9, more than 76% of Uniswap V4’s total volume occurred on Unichain, compared to 15.5% on Ethereum.

The heavy skew can be largely attributed to liquidity incentives on Unichain in the form of Uniswap’s UNI token, so these ratios are unlikely to be sustained over the long run.

It is also worth noting that over the last month, Uniswap v3 has still processed the majority of volume across all Uniswap iterations, with $40 billion in volume during the month of April compared to v4’s $8.7 billion.

Uniswap’s UNI token is also enjoying a strong week as Bitcoin and Ethereum surge. UNI is up over 35% over the last seven days and 10% over the last 24 hours.

The team set out to build Unichain in an attempt to solve issues with the Ethereum mainnet and liquidity fragmentation across the L2s, Uniswap Lab’s protocols and platform product lead, Alexander Karys, told The Defiant in an interview this past week.

“The original vision behind Unichain was to try to build something that sort of delivered on the L2 scaling roadmap," Karys explaind. The goal was that users "would get better, faster transactions at a cheaper price, but do it in such a way that both solved sort of liquidity fragmentation, which our users were feeling pretty distinctly in our apps, and do it all in a way that is kind of maximally trustless, verifiable and kind of eventually decentralized,” Karys added.

Rollup Boost

Unichain also just launched Rollup Boost this month, which introduces a trusted execution environment (TEE) for block building on the network. A trusted execution environment is a piece of memory, in this case, a block, that can be accessed and altered by authorized code, but remains immutable to any third parties.

The upgrade prioritizes value sharing maximal extractable value (MEV) over extractive MEV, which creates a more predictable environment for MEV, ensuring that intentional developer MEV supersedes third-party extractive transactions such as sandwich attacks.

TEEs can also reduce wasted gas on the network. In traditional EVM settings, when a transaction fails, the user attempting the transaction still loses their gas fee. However, using TEEs, developers can revert protected transactions, meaning that the user does not need to pay gas for failed transactions on dApps that have the feature enabled.

The upgrade also sets the chain up for its Flashblocks feature, which could enable an 80% reduction in block times from 1s per block to 200ms.

“We want this to be the fastest L2, which is why we've been working with the Flashblocks team again to develop this new protocol that does 200 millisecond sub blocks, so basically breaking blocks into these super fast sub blocks. We're going to be doing flashblocks as our next big push, and it's going to be all done in TEEs,” said Karys.

He also cited block speed as extremely important for DeFi’s desire to compete with traditional finance and centralized exchanges.

“I think a lot of us who spend a lot of time in crypto, especially in the EVM ecosystem, are sort of used to this workflow of, you know, like clicking 'sign', waiting a bit, waiting some more, clicking again. But for most people who are used to interacting in the world, that's a pretty broken UX,” Karys concluded.