What is Uniswap v4?
Uniswap v4 is the latest iteration of the world's largest decentralized exchange, processing over $2 billion in daily volume. Key innovations include hooks (customizable pool logic), singleton architecture (reducing gas costs by 99%), and native ETH support.
Basic Swaps
Connect your wallet, select the token pair, enter the amount, and confirm. Uniswap uses an automated market maker (AMM) model, so you're always trading against a liquidity pool, not another trader. Slippage tolerance of 0.5% works for most trades; increase to 1-2% for volatile tokens.
Providing Liquidity
Liquidity providers (LPs) deposit equal values of two tokens into a pool and earn a share of trading fees. Concentrated liquidity (introduced in v3, improved in v4) lets you specify price ranges where your liquidity is active, potentially earning 10-50x more fees than full-range positions.
Understanding Impermanent Loss
When you provide liquidity, your deposit's value can diverge from simply holding the tokens. This "impermanent loss" becomes permanent if you withdraw while prices have diverged significantly. Stablecoin pairs minimize IL; volatile pairs maximize potential returns but carry higher risk.
Hooks: The v4 Game-Changer
Hooks allow developers to attach custom logic to pool actions. Examples include dynamic fees that adjust based on volatility, TWAP oracles for more accurate pricing, and auto-compounding LP positions that reinvest fees automatically.
Safety Tips
Always verify token contract addresses before swapping — fake tokens can drain your wallet. Use Uniswap's official interface at app.uniswap.org. Check pool liquidity depth; low-liquidity pools can result in extreme slippage.
