Uniswap Announces New Smart Contracts for DEX
Amidst so much turmoil in the crypto market as of late, Uniswap is still pushing the boundaries of web3 and providing new innovations to an ecosystem that still has the potential to grow, expand, and thrive in the future.
In a recent announcement, the decentralized exchange (DEX) stated that they would be releasing two new smart contracts that allow transactions on the ethereum network to become more seamless and affordable to ordinary users.
Permit2
The Permit2 smart contract will allow token approvals across multiple smart contracts in order to help reduce gas fees and provide a more streamlined user experience.
One of the biggest updates from the Permit2 smart contract is how it will allow token approvals for any token whether it is supported or not by native permit methods. This will open up the options for transactions as more tokens are able to be exchanged on decentralized platforms.
Approvals can also be time-bound which gives an extra layer of security as time sensitivity can cancel a transaction in the event that it was unwanted or unaccepted.
Further, batch approvals can be made in an effort to make transactions that consist of multiple tokens possible. This can be extremely useful in large transactions that include multiple tokens and can also expand the abilities of decentralized exchanges.
Universal Router
The Universal Router is another smart contract developed by Uniswap that will allow users to exchange cryptocurrencies and NFTs within a single transaction. This will open up the way for payments and transfers to be conducted at once without multiple transfers being required.
While similar to the Permit2 smart contract, the key difference with the Universal Router is that it allows multiple erc-20 and erc-721 tokens to be exchanged at the same time when previously it was only possible to exchange one type of erc-20 token in exchange for one erc-721 token.
A new era for DEXs?
The updates from Uniswap come at a time when confidence in centralized exchanges (CEX) is at an all-time low. The collapse of FTX has caused many people to realize that holding their funds on a centralized platform acts against a core pillar of cryptocurrency which is total self-custody; and placing funds in a CEX removes true custody of funds.
With decentralized exchanges, all funds still remain in a custodial wallet which means that users still have full control over their assets without any of it being controlled by a third party.
As more fallout continues to spread from the collapse of FTX, there is potential for the future of DeFi and DEXs as more users who entered the space in 2021 with relatively little understanding of decentralization begin to see the benefits and reasoning behind total ownership.
By removing any third parties and replacing transactions with a protocol and smart contract, funds are left untouched by human error and greed. Although some protocols still carry inherent risks as they can be developed by bad actors, the adoption of trusted protocols created by more benevolent actors provides a new method of money management that has never existed before in the past and can keep user funds safe without fear of Ponzi schemes and money laundering.
