Uniswap Launches v2 Across Six New Chains

In a surprise move, Uniswap has launched its older v2 iteration across multiple chains, despite the leading spot decentralized exchange gearing up to launch its fourth version for the first time later this year.

On Feb. 20, Uniswap v2 rolled out across Arbitrum, Optimism, Base, Polygon, BNB Chain, and Avalanche. While each network already supports Uniswap v3, the team said v2 offers benefits due to the simplicity of its pools and trading interface.

“With both v2 and v3 available across all supported networks, users have the flexibility to choose between simplicity with v2 and more advanced features with v3,” Uniswap said. “Because it is simpler code than v3, it's oftentimes cheaper and easier to swap and [provide liquidity] on Uniswap v2. It's also really easy to deploy new pools, which is why it is so popular for launching new tokens.”

The team noted the popularity of Uniswap v2 codebase, with DeFi Llama tracking 568 forks of Uniswap v2 that are currently active. However, Uniswap said the forks have proved vulnerable to security issues, with users suffering $55M worth of losses to exploits, bugs, and rug-pulls targeting Uniswap v2 forks across BNB Chain, Base, and Arbitrum over the past year.

Uniswap v2 retains market share

Uniswap launched v2 in May 2020, with the protocol quickly emerging as a pillar underpinning the “DeFi summer” boom. While Uniswap v1 pioneered the automated market maker exchange and enabled swaps between ERC-20 tokens and ETH, v2 introduced the ability to swap between any pairing of ERC-20 tokens, support for multiple price oracles, and gas fee optimizations.

Uniswap followed up with the launch of v3 in May 2021, pioneering advanced liquidity management features for asset providers in the form of “concentrated liquidity.”

Despite enabling new strategies for sophisticated and active liquidity providers (LPs), many lay users were rendered uncompetitive by Uniswap v3 and resorted to outsourcing liquidity management to third-party protocols. The increased complexity of v3’s codebase can often result in higher fees for traders too.

Trades executed through Uniswap are automatically routed through whichever protocol offers the best price available. Uniswap v3 on Ethereum boasts a sizable lead by trade volume, processing 863.8M worth of trades over the past 24 hours — equating to 21% of spot DEX activity, according to CoinGecko. Uniswap v2 comes in seventh with $182.7M or a 4.5% market share.

Uniswap v3 is the top decentralized exchange by total value locked (TVL) with $2.76B across 13 chains, including $2.28B on Ethereum. Uniswap v2 closely follows with $2B solely residing on Ethereum, highlighting the protocol’s popularity among liquidity providers.

Uniswap is also gearing up to launch its v4 iteration, with the team targeting a late Q3 2024 launch per a Feb. 15 announcement. V4 will introduce several new features including limit orders, transaction fee optimizations, auto-compounding LP fees, and integrations with lending protocols for idle liquidity.

Last week, Uniswap tweeted that it is working towards finalizing the code for v4, and will next solicit code audits and deploy v4 on testnet, before transitioning to its mainnet launch.