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Compared to several large centralized exchanges, Uniswap v3 has around 2x greater market depth on average for spot ETH-dollar pairs (using the most liquid dollar or stablecoin on each platform for comparison). Uniswap v3 compares even more favorably by aggregating risk across all ETH-dollar pairs, as shown in Appendix Figure A1. Figure 1.
Uniswap v3 is the forthcoming new and improved DEX that will run on the Ethereum blockchain and be powered by the same automated market maker (AMM) model as v2 but loaded with new developments .
First off Uniswap V3 was launched around march of 2021 on both the Ethereum main net, as well as the optimism main net, which, if you don’t know what optimism is, it’s a secondary network used to scale Ethereum now, just like V2 had one big update. The big update in V3 is called concentrated liquidity.
The Uniswap interface has been updated to natively support the Uniswap v3 Protocol. However, when v2 offers a superior price to v3, the interface will notify you and suggest a seamless switch between the two protocols. Note that if you have not approved your token on the v2 protocol before, you will need to approve it before trading on v2.
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