Uniswap Targets DeFi Pain Points With 2 New Smart Contracts
The smart contracts will unify the token approval process and allow users to execute multiple trades in one transaction
Source: Shutterstock
Decentralized exchange Uniswap revealed that it has released two new smart contracts — Permit2 and Universal Router — that aim to improve user experience in DeFi.
Traditional token approval methods required users to “send an approval transaction for each new application they wanted to use,” Uniswap Labs wrote in a blog post.
“This led to a confusing UX where users might be asked to send multiple transactions before using an application, wasting gas and time,” it added.
Permit2 unifies the token approval process — and provides permit-based approvals and transfers for ERC-20 tokens across different smart contracts.
Universal Router, combines token and NFT trades into a swap router. It allows users to execute multiple trades on Uniswap V2 and V3, then buy NFTs from different marketplaces in one transaction.
Lawrence Forman, a blockchain security engineer, first came up with the infrastructure behind the latest smart contracts.
“So cool to see this launch! This is based on my permit-everywhere hack at ETHNewYork,” he tweeted.
Improving speed and safety in DeFi
Ethereum’s token approvals were a bane to decentralized finance users throughout DeFi summer, especially during periods of high gas prices, when it could cost several dollars just to approve a token transfer — before even getting to the transaction itself.
Previously, to approve maximum allowances, applications often had access to a user’s entire wallet balance — leaving them vulnerable to exploitation and unsafe practices.
Third-party tools such as Revoke.cash were created just to address these sorts of limitations in the original token approval process, but they represented a stop-gap measure.
The latest smart contract is designed to minimize those risks, reduce gas prices and simplify transaction flows.
Scott Lewis, the co-founder of Defi Pulse tweeted, “The fun part about free public infrastructure is that everyone can use everyone else’s and then it’s just all winning forever, together.”
The Universal Router, meanwhile, is integrated with Permit2, which means that approvals and router flow should be more streamlined.
This latest announcement comes soon after Uniswap Labs closed a $165 million Series B, bringing the protocol’s total valuation to $1.66 billion.
It seems that the protocol is actively looking at ways to improve critical infrastructure within the ecosystem as it continues to expand its product offerings and become financially sustainable.
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