What is UNISWAP V4?
UNISWAP V4 represents a new phase of Distributed Exchangeoptimizes transaction costs by improving efficiency and giving users complete control over liquidity and fees.
Important upgrades for the V4 include:
Reducing gas fees – Liquidity pool creation is up to 99.99% cheaper.Hook – Developers can customize trading rules such as dynamic pricing and limiting orders.Flash Accounting – Reduce unnecessary token transfers and save on gas bills.Dynamic Fees – The pool can automatically adjust the rate based on market conditions.Native ETH Support – There’s no need to wrap ETH To Wes before trading.Singleton contract – All pools exist under one contract, making transactions more efficient.
UNISWAP V4 vs. Previous version
Uniswap Improved in each version. Here’s a comparison:
Features
Uniswap V1 (2018)
UNISWAP V2 (2020)
UNISWAP V3 (2021)
UNISWAP V4 (2025)
Smart Contract
One for every pair
Separate by pool
Separate by pool
Singleton Contract (All Pools)
Fluidity Model
Equal liquidity in all price ranges
More flexible
Intensive Liquidity (LPS Set Price Range)
More efficient LP management (ERC-6909)
Price structure
0.30% correction
Fixed 0.30% (Customizeable)
Multiple layers (0.05%, 0.3%, 1%)
Dynamic Fees + Custom Hooks
Gas efficiency
High cost
Moderate
It’s more efficient but more expensive
Most gas efficient (creating a 99.99% cheaper pool)
swapping
Eth as a bridge
Direct ERC-20 swap
LP position improvement
More flexible swapping using LP controls
Price Oracle
none
Twap Oracles
Advanced priced Oracle
Enhanced Oracle + External Integration
ETH Support
You need to wrap ETH
You need to wrap ETH
You need to wrap ETH
Native ETH support (no wrapping)
Customization
none
none
none
Hooks for custom pool logic
Flash Accounting
no
no
no
Yes (optimized token transfer)
safety
Basic model
Security improvements
Highly audited
The safest version, $15.5 million bug bounty
Key Features of UNISWAP V4
Let’s take a closer look at the biggest upgrades.
1. Singleton Contract: Gas Fee Reduction
Previous: All liquidity pools had separate smart contracts, which cost money to trade.
Now: Singleton Design manages all pools and reduces them significantly Gas fee.
2. Hook: Custom Trading Logic
Previous: Trading rules have been revised, giving liquidity providers little flexibility.
Currently: Developers can create custom trading rules using hooks.
Enable hooks:
Dynamic charges that automatically adjust during the volatile market.Limit orders that run only at the desired price.Automatically reinvest your LP rewards without manual steps.
3. Flash Accounting: Less token transfers
Previous: Each swap has moved token Gas costs increased multiple times.
Currently: UniSwap internally tracks changes in balance and only transfers the final amount.
Think of it like a restaurant order. Previously, all the dishes were brought separately and wasted time. Now everything arrives at once, saving effort and costs.
4. Dynamic Prices: Smarter Prices
Previous: The pool had a fixed fee (0.05%, 0.3%, 1%), and LPS could not be adjusted based on market trends.
Current: Prices rise during volatility, falling steadily, optimizing LP revenue.
Why is it important:
Traders will receive lower fees if the market is stable.As demand increases, LPS will acquire more.UNISWAP makes it more competitive against centralized exchange.
5. Native ETH Support: No more wrapping
Previously: ETH had to be converted to Wes before trading.
Currently: Users can trade with native ETH, reduce gas fees and simplify transactions.
It’s like using cash instead of converting it to a gift card first before you buy.
6. ERC-6909: More gas-efficient token standard
Previous: Provided or Deleted Fluidity Multiple ERC-20 transfers were required, increasing gas costs.
Currently: ERC-6909 reduces unnecessary transactions, saves fees and increases efficiency.
Who should switch to uniswap v4?
When using UNISWAP, V4 has a great advantage. This is why you want to switch:
For traders: Reduce gas fees, native ETH support, and more efficient swaps.For liquidity providers: Better liquidity management, dynamic fees, and gas savings.For developers: Flexibility of custom trading rules using hooks.
How a liquidity pool works in V4
If you are using Uniswap, you have interacted with the liquidity pool. But how do they work for V4?
Previous (v3):
Each trading pair has its own pair Smart Contract.The pool-wide transaction interacted with multiple contracts, meaning increased gas prices.
Now (V4):
All pools exist in one big contract Pool Manager.Creating a new pool is up to date 99.99% cheaper.Multihop swaps (trading across multiple pools) cost much less.
The UNISWAP V4 is the biggest upgrade ever. It improves efficiency, lowers rates, and gives users more control over transactions. Features such as hooks, flash accounting, and dynamic pricing set new standards for distributed exchanges.
Whether you’re a trader, liquidity provider, or developer, UNISWAP V4 offers something valuable. If you are using an older version, it may be time to upgrade.