Uniswap, the leading decentralized exchange, has announced the launch of its v3 protocol on Binance Chain (BNB), a move that has been in the works for months. The launch comes after a period of infighting within the Uniswap community, with debates on whether to implement the proposal or not. Nevertheless, the launch is a significant win for Uniswap, and a crucial step towards a multi-chain future for the broader DeFi ecosystem.
The BNB Chain, created by Binance, is the second-largest smart contract network with a Total Value Locked (TVL) of $ 5 billion, according to DeFi Llama. The blockchain offers faster and cheaper transactions than Ethereum, making it accessible to a broader user base. BNB Chain is also compatible with the Ethereum Virtual Machine, which means Ethereum developers can easily port their code.
Pancake Swap, a fork of Uniswap v2, is Uniswap’s top rival and is hosted on the BNB Chain. According to DeFi Llama, Pancake Swap has a TVL of $2.5 billion and a 24-hour volume of 159.7 million, according to CoinGecko. Uniswap, on the other hand, is the fifth-ranked DeFi protocol with a TVL of $3.5 billion, according to The Defiant Terminal.
Uniswap’s v3 protocol, which pioneered “concentrated liquidity,” a feature that significantly improves the efficiency of capital utilization for DEXes, has driven $2.2 billion worth of trades over the past 24 hours. The code for Uniswap v3 was launched under a Business Source License, protecting its code against unauthorized commercialization for two years.
0xPlasma Labs, a DeFi platform, first proposed launching v3 on BNB Chain in December 2022. Uniswap governance passed the initial temperature check proposal on Jan. 22 with 80% support. The deployment of v3 on the BNB Chain is expected to grow Uniswap’s TVL by $1 billion.
The launch of Uniswap v3 on the BNB Chain is a significant win for Uniswap, protecting it against unauthorized competitors deploying v3 on the network after its Business Source License expires in April. Within two months of its deployment, Uniswap v3 took over most of Polygon DEX’s market share.
The final vote to determine v3’s bridging infrastructure provider for the BNB Chain deployment was unable to be participated in by Andreessen Horowitz (A16z), the largest venture capital firm in crypto and a major Uniswap investor, due to a technical issue. The proposal passed with two-thirds support, with Wormhole providing bridging infrastructure for the BNB Chain deployment.
In conclusion, the launch of Uniswap v3 on the BNB Chain is a significant move in the DeFi space, and it is expected to drive more adoption of the Uniswap protocol. With the growing popularity of multi-chain adoption, Uniswap’s move to launch on the BNB Chain is a step towards a more interconnected DeFi ecosystem.
