Would Uniswap be better off on its own appchain?

The appchain model gives the community true “ownership of the application,” Blockworks Research analyst David Rodriguez argues

article-image

Vector-3D/Shutterstock modified by Blockworks

share

The latest improvements to Uniswap, the largest decentralized crypto exchange by volume, are on their way, with draft code recently released for the community to scrutinize. 

The V4 update will introduce a number of improvements, including “hooks” — smart contracts that interact and build on top of custom pools — and architectural efficiencies that should significantly reduce gas costs.

So once V4 is settled, what’s coming up for Uniswap?

On a recent Empire podcast (Spotify / Apple), Blockworks research analyst David Rodriguez says the next “obvious step” would be for Uniswap to operate its own appchain.

Owning and operating “the entire stack,” as opposed to running on Ethereum, provides important advantages, Rodriguez says. 

“Not only can you potentially monetize at every layer of the stack, but because you own that full stack, you’re actually able to have full customization of your application.”

On an appchain like those offered in the Cosmos ecosystem, applications and chains are “aware of each other,” Rodriguez explains. “So there’s application-specific logic that you can bake into how your chain actually comes to consensus.”

Bending the knee

Rodriguez mentions one example of the difficulties of operating on the Ethereum network with the upcoming “singleton contract” under V4. It reduces gas fees by allowing tokens to be transferred via a single contract instead of between pools held in different smart contracts. 

But to enable the most efficient routing, he says, Uniswap “needs transient storage to be baked into Ethereum.”

Such a particular change to the Ethereum network could be perceived as “catering to a specific protocol,” Rodriguez says.

The research analyst says past arguments regarding this issue centered on whether Ethereum should be “bending the knee to Uniswap,” changing its roadmap to prioritize the popular DeFi primitive over other applications in the ecosystem.

If the Uniswap community simply wants to build the best product, it can build its own full stack on an appchain and operate independently of other network demands, Rodriguez says. 

“You don’t have to start politicizing or lobbying for a reason why your specific op code that you want in Ethereum needs to go ahead of others.”

The appchain model gives the community true “ownership of the application,” Rodriguez argues. “Whereas right now, everything that’s built on Ethereum is really at the mercy of Ethereum.”

Capturing value

Blockworks research analyst Ren Yu Kong disagrees. “V4, to me, signifies that Uniswap may not go to an appchain model,” he says.

The major reason for a DeFi application to move to the appchain model would be for “value capture,” Kong says. 

That is accomplished in two ways, Kong says. Either through the “internalization of MEV” — where value from network activities is returned to the protocol rather than external MEV actors — or turning on a fee switch.

Under V4’s improvements, Kong says, the “hook” smart contract improvement allows for some internalization of MEV — a narrative that is being “publicly pushed by Uniswap themselves,” with Uniswap-backer Paradigm Capital’s Dan Robinson promoting the approach, Kong says.

“Now you have withdrawal fees. Now you have swap fees.” Protocols that launch hooks can capture both, he says.

“If Uniswap’s allowing all of these liquidity pool launchers to do that, then maybe they aren’t that concerned about value capture,” Kong says.

“Maybe there’s not so much need for an appchain.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

Publicly-traded, liquid securities are “low-hanging fruit” for tokenization before moving to private markets, executive says

article-image

The next step in Blockworks’ evolution into a data powerhouse increases customizability and autonomy over their high quality charts and data

by Westie /
article-image

Sponsored

With early interest from an initial cohort of brands including Metaplex, Story Protocol, and Pipe Network, Shelby offers decentralized, cloud-speed storage for streaming, AI, and real-time content

article-image

The $135 million raise shows that TradFi giants are serious about crypto adoption

article-image

The banking system still processes payments like it’s 1975. Crypto might have a fix.

article-image

Fiserv’s launch follows Senate passage of the GENIUS Act for stablecoin regulation.