DeFipowerhouse Uniswap announced today that it will be deploying on Polkadot.
The decision to open shop on Polkadot follows a near-unanimous governance vote first championed by Blockchain at Berkeley, a student educational group linked to UC Berkeley, and brought back to life by Blockchain at Michigan, another educational organization.
The first initiative sought to deploy Uniswap's smart contracts using the Nomad bridge service; the latest initiative opted to deploy on the Wormhole bridge.
In roughly a month, the popular decentralized exchange (DEX) will deploy its V3 iteration Polkadot users, which promises various advantages to previous versions, like better capital efficiency, more flexible fee structures, and improved user experience.
Uniswap V3 on Polkadot exists thanks to Moonbeam, a parachain (a kind of individual, sovereign blockchain) running atop the network.
“For UNI being a bluechip and always being at the forefront of DeFi innovation, we always intended to have Uniswap deployed on Polkadot in some way, shape, or form,” wrote a Uniswap spokesperson in an email to Decrypt.
The representative added that it was Moonbeam that in 2022 took the initiative to approach Polkadot and let them to run Uniswap V3 smart contracts on the parachain.
The offer was accepted primarily for two reasons: Moonbeam currently has Polkadot’s highest DeFi activity, and the parachain architecture is “the most EVM-friendly in our ecosystem,” enabling Ethereum virtual deployments “as smooth and frictionless as any other EVM chain out there.”
These parachains aim to improve scalability by ensuring that not every transaction is competing against all other smart contracts in the network.
This makes Polkadot an example of a multichain, or what’s sometimes termed a “layer zero” protocol, providing the backbone, or infrastructure for these different parachains.
Users go decentralized
One of the biggest consumer questions since the collapse of FTX last year is whether decentralized exchanges are safer than centralized ones.
Unlike FTX, Binance, or Coinbase, which are all CEXs, Uniswap doesn’t interact with banks at all. Customers must possess digital assets to use the exchange, which can make the customer experience a tad more complicated than with CEXs.
However, where DEXs like Uniswap lack user-friendliness, they provide the customer with more control over their assets than CEXs. And this seems to be paying off.
Per a Q2 report from CCData, decentralized exchange increased monthly volumes by 27.6% compared to last year. "Uniswap V3 has taken the lead in terms of trading volume, capturing 50.3% average monthly market share of the total decentralized exchange volume," the report states.