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Uniswap Introduces Auto Router Backing On Layer 2 Networks

Uniswap Introduces Auto Router Backing On Layer 2 Networks

The latest Auto Router updates from Uniswap are all about better pricing and gas predictions for its consumers.

Uniswap Labs, the firm behind Uniswap, DeFi’s largest exchange, has announced several critical enhancements aimed at improving pricing and lowering swap gas costs.

What Can You Expect From the Update?

Uniswap Labs has launched an upgraded Auto Router that improves trade pricing by routing deals across both Uniswap v2 and Uniswap v3 pools. Users will be granted the opportunity to track the true cost of a swap in real-time right from the App interface as a result of this. The new update not only optimizes gas prices but also determines the cheapest pricing across all Uniswap protocols.

Auto Router now backs both Optimistic Ethereum and Arbitrum, which is a significant addition to the update. With the support of efficient trade pricing and the low gas costs of a Layer 2 network, the modifications aim to create an overall cost-effective trading experience.

In addition, before submitting a swap, the Uniswap App will now display a USD estimate of the gas fee. The program will also automatically set slippage depending on traders’ projected gas costs as well as trade size using gas calculations.

The First Publication

Uniswap Labs has described Auto Router as a “huge win” for v3 users since its launch three months ago. Auto Router improves pricing for 13.97 percent of all trades and 36.84% of exchanges between the 10 largest tokens in terms of total value locked, according to the platform’s data (TVL).

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Uniswap Labs introduced three key features in September: split routes, a more powerful algorithm, and gas cost awareness.

By separating routes, customers were allowed to make transactions across various pools at the same time. This is in stark contrast to the typical router, which uses only one route for trade execution. Traders could spread deals across up to seven paths using the Auto Router, allowing them to benefit from liquidity depth in multiple pools.

It also looked at liquidity in greater depth, allowing for more efficient execution, particularly on large trades. Additionally, the release enabled users’ effective pricing to be optimized by gas costs, reducing the number of gas-intensive hops to reach the output token and allowing for more efficient execution of smaller trades.

The Future of Uniswap

Uniswap is the decentralized exchange market leader, despite the introduction of other platforms in the decentralized economy. According to the most recent chart compiled by Dune Analytics, Uniswap has a 78 percent share of the DEX market, followed by SushiSwap with an 8 percent stake.

The Author

Samuel Adeshina

Samuel is a financial reporter whose interests include blockchain, market, business, insurance, and Crypto to provide relevant information to all interested.