Uniswap V3 Launched On Optimism
Uniswap has taken the much-awaited next step to scale up by bringing the popular decentralized exchange onto the layer 2 protocol, Optimism.
Biggest Ethereum DApp Goes Optimistic
On Tuesday, Uniswap announced its move to launch Optimistic Ethereum layer-2 scaling in alpha. A day later, Optimism followed through with an announcement of its own, saying,
“Today, the biggest dApp on Ethereum goes optimistic.”
The launch will allow anyone to deposit, trade, and provide liquidity using Uniswap V3 on Optimistic Ethereum and allow testing in a controlled environment focused on user safety. Additionally, to prevent the usage rate from shooting up, the Optimism team has already factored in explicit safeguards.
The company also reminisced about its initial collaboration with Uniswap at DEVCON V back in 2019 to build Unipig Exchange, the first-ever demo of Optimistic Rollup.
EIP 1559 Pricing To Be Introduced
The launch will see the official enforcement of fees on Optimistic Ethereum. The team clarified that they had chosen a conservative target of 50,000 transactions per day that are to be targeted with an EIP 1559 like congesting pricing mechanism. This means that if the demand crosses the gas limit, the protocol will increase fees until transactions start slowing down.
Planned And Unplanned Downtime
The system being in the alpha stage, it is still susceptible to bugs. The Optimism team clarified that it expects downtime during the project’s initial phase to debug the operations. During this period there will be a hold on executing swaps, earning fees, conducting transactions, or adding liquidity.
The team also announced a system upgrade multisig and at least one more upgrade in a few months. The planned downtime will be announced well in advance, as transaction submission may go down for several hours, and history (not state) may be reset.
How to use it?
To use Uniswap on Optimistic Ethereum, first L1 assets need to be deposited into L2, which will take only 5 minutes. Once the assets have been transferred from Ethereum to Optimism, the user needs to connect their wallet to Optimism to start interacting with layer 2 dApps. Swapping on Optimism is similar to Layer 1 Ethereum, except for its much lower gas fees and almost immediate transaction confirmation.
Providing liquidity on Optimism is also similar to that of Layer 1 Ethereum, with more cost-effective rebalancing or reinvesting fees for LPs on the former.
However, due to the current lack of trade routing between L1 and L2 Uniswap Protocol deployments, Optimism LPs will not earn fees from L1 trade volume.
The L2 assets can be withdrawn back to Ethereum Layer 1 through the Optimism Gateway. The withdrawal process takes seven days in order to allow sufficient time for verifiers to detect fraud on the Optimism network.
The Optimistic team is continually working on their developments by prioritizing system stability, fixing bugs, ramping up the TPS constraint, and preparing for open deployment.