The decentralized central Uniswap introduced on March 23 a deliberate launch of the second main model, Uniswap V2. Among the many foremost options, the brand new platform will function flash swaps – an identical function to the notorious flash loans some blame for current decentralized financing (DeFi) hacks.
The discharge of the replace is deliberate for Q2 2020, though that of Uniswap blog post emphasizes that it’s "not an introduced launch date".
Uniswap is a decentralized cryptocurrency alternate platform that gives comparable performance to ShapeShift or Bancor. Not like conventional decentralized exchanges, there isn’t a order guide. Trades depend on asset pairs the place Ether (ETH) is all the time the bottom foreign money.
Uniswap V2 permits for direct token-to-token swaps, which is very helpful for exchanging a steady greenback from the US greenback for one more. Whereas this will now be finished by routing by ETH, a direct alternate reduces losses because of charges and slippage.
Prevention of DeFi Oracle bugs
Uniswap was on the middle of two back-to-back exploits carried out on the bZx platform. One of many causes the second hack was attainable was that bZx relied on Uniswap and Kyber as value hurdles – regardless of their comparatively low liquidity.
Uniswap V2 tries to partially clear up this downside by making a time common value feed. In an effort to affect the worth values of the platform, the attacker should affect at the very least two blocks instantly after one another.
This design would forestall flash mortgage assaults Vitalik Buterin, for the reason that flash loans can solely exist for one block. By taking the time common of costs, the protocol can be extra immune to any manipulation generally.
Add your personal flash financing
Flash loans had been typically blamed for the hacks, regardless of many commentators declaring essential vulnerabilities in bZx software program. Regardless of their dangerous repute, Uniswap V2 can have a financing perform referred to as flash swap.
The swap permits customers to withdraw a limiteless variety of ERC-20 tokens from a liquidity pool, offered that the tokens or their ETH equal are returned in the identical block.
The function would permit capitalless DeFi arbitrage – the place merchants mess around with the worth distinction of the identical asset throughout completely different platforms. It will also be leveraged by Maker (MKR) extra environment friendly.
The lending platform is at the moment utilized by some merchants to take leveraged Ether positions by shopping for ETH recursively with the Dai (DAI) crushed by the system.
With the flash swap, the specified leverage will be achieved by merely borrowing ETH from Uniswap and returning it as Maker DAI. Whereas it simplifies the method, it doesn't make it risk-free like Maker suffered unfair liquidations not too long ago.