Uniswap Is Decentralizing: Why Are DeFi Users Worried About This Feature?
October 18 2023 - 5:00PM
NEWSBTC
Devin Walsh, Executive Director of the Uniswap Foundation, a
non-profit organization supporting the growth and decentralization
of the Uniswap decentralized exchange
(DEX), believes that Uniswap is decentralizing. Walsh
even compares the current state of the DEX to that of Ethereum. The
executive also acknowledged that the DEX’s current level of success
is due to the active participation and contribution of the
developer community. Uniswap Becoming More Decentralized? The
Executive Director responded to a thread on X where Antonio
Juliano, the founder of dYxX, a layer-2 DEX on Ethereum, insinuated
that Uniswap is now centralized. However, it started on a
decentralized path. With centralization, Juliano added,
the protocol can iterate quickly, mainly to boost revenue. On the
other hand, by being more decentralized, dapps allow users to enjoy
the full advantages of decentralized finance (DeFi).
Decentralization of protocols launching on public ledgers, like
Ethereum or Cardano, is crucial. Usually, the community will gauge
how well a dapp is decentralized by looking at, among other
factors, how decisions are made and which party spearheads
development. Related Reading: Analyst Predicts XRP Price To
Hit $100: Here’s How To Become A Millionaire In the case of
Ethereum, Walsh pointed out that the community has taken over from
where Vitalik Buterin, the co-founder; and Consensys, a technology
company developing solutions for Ethereum, left. Since then,
multiple developers have been refining the network and ensuring it
is secure and robust to anchor dapps. Uniswap is one of the most
popular DEXes on Ethereum, looking at total value locked
(TVL). DeFiLlama data shows that the exchange manages
over $3 billion of assets and is primarily active on Ethereum.
However, the exchange enables trustless swapping on layer-2
platforms like OP Mainnet, and public ledgers like the BNB Chain.
Preparing For Hooks And KYC? Presently, Uniswap Labs leads the
development of Uniswap. Nonetheless, Walsh said more developers are
now building and contributing solutions. This, the Uniswap
Foundation executive further observed, is especially considering
the scheduled launch of Hooks in v4. There is no specific timeline
for when Uniswap will deploy the latest iteration, but the release
of the Cancun upgrade on Ethereum will play a role. The protocol
will be more customizable with Hooks since the feature acts more
like a plugin. Related Reading: Binance Traders Go Bearish On
Bitcoin, But Here’s Why They Might Regret It Even so, there have
been concerns that Hooks, though being developed by community
developers, will be the basis for Uniswap to censor liquidity
providers (LP) or traders who don’t verify by adhering to
know-your-customer rules (KYC). UNI prices remain under pressure at
spot rates and may break lower, registering new 2023 lows. Feature
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