As a web3 enthusiast, you’ve undoubtedly had your fair share of trouble navigating the space at least once.
Whether it’s the sheer number of platforms that offer different NFT prices, or the lackluster user experience, issues in this evergrowing field are numerous. Well, the situation might just take a turn for the better with Uniswap’s new release.
Uniswap has launched two new smart contracts to fuel platform improvements in the DeFi space. This article will help you understand Universal Router and Permit2, as well as how they could improve your DeFi experience.
Uniswap Universal Router Smart Contract
The first in a line of improvements coming from the largest DEX is the Universal Router smart contract. Universal Router unifies token and NFT trades into a flexible, gas-optimized, secure, and extensible swap router. It aims to improve the user experience of the platform as it becomes the default swap router for all Uniswap swaps.
Its goal is to solve two main problems:
- Current swap routers support only one of the two tokens: ERC20 or NFTs.
- Users have to approve every token on their first use.
With the introduction of Universal Router, users can execute multiple token swaps on Uniswap’s platform, all in one transaction.
An example provided by Uniswap showed that we can use a single transaction to use several different tokens, swap them on Uniswap V2 and V3 using a split route, wrap ETH into WETH, and buy an NFT on OpenSea.
In addition, due to the Permit2 smart contract integration (which we have covered below), users don’t need to send one or more approvals in order to allow this transaction. Rather, the token approval will happen within the transaction.
Universal Router is a non-upgradable, unowned, and open-source smart contract that has been deployed to all blockchains supported by Uniswap, including Ethereum, Optimism, Arbitrum, Polygon, and Celo.
Uniswap Permit2 Smart Contract
The next smart contract innovation that Uniswap has introduced is called Permit2. Permit2 smart contract has been introduced as a solution to the allowance problem of EIP-20 and EIP-2612 token structures:
- Whenever users wanted to use an application, they needed to send an approval transaction to allow the platform to utilize their funds. As a result, users were confused and spent a lot of time and gas fees to set everything in motion.
- Most platforms initially introduced maximum allowance “ask,” where they requested users to approve the maximum allowance instead of the amount they wanted or needed. This feature has improved user experience, but has also been shown to be somewhat exploitable security-wise.
- Another step toward solving this problem came with the invention of the EIP-2612 token standard. Users could now interact with application contracts without previously approving their spendings, but rather by adding a signed permit to their transaction.
This improvement made token approves safer; however, tokens launched before the introduction of EIP-2612 did not support this function, and many newer tokens did not adopt this standard either.
Permit2 further expands on the token approval mechanism and enables signature-based approvals and transfers for any ERC20 token regardless of its EIP-2612 support.
Uniswap’s Permit2 smart contract aims to improve the security, user experience, and flexibility of ERC-20 token approvals with features like:
- Shared cross-app approval management
Users can now skip the allowance process entirely by releasing tokens to a permissioned spender through a one-time signature. This means that they can approve the use of their funds cross-platform.
- Universal permits for any token
By integrating Permit2, platforms can now eliminate the token approval button and have a simpler user experience regardless of EIP-2612 token standard support.
- Time-bound token approvals
Approvals can now be time-bound, as Permit2 introduces an expiry date to allowances. This feature removes security concerns regarding allowances that last forever.
- Batch approvals & revokes for tokens
Users can now set approvals on multiple tokens, execute multiple transfers, or remove the allowance for multiple tokens in one transaction.
Permit2 is a non-upgradable, unowned, and open-source smart contract that has been deployed to all blockchains supported by Uniswap, including Ethereum, Optimism, Arbitrum, Polygon, and Celo.
While Permit2 will cover NFT token standards in the future, the current version only supports ERC20 tokens.
Uniswap NFT Marketplace Aggregator
As a result of these improvements and further development efforts, Uniswap has launched an NFT marketplace aggregator as the first step toward building a platform that connects the NFT and ERC20 token worlds.
Starting Nov 30th, Uniswap users can trade NFTs across major marketplaces finding more listings and better prices directly on the platform.
The most popular DEX platform has announced that the new feature will initially feature NFT collections coming from OpenSea, X2Y2, LooksRare, Sudoswap, Larva Labs, X2Y2, Foundation, NFT20, and NFTX platforms.
Uniswap developers stated that users can save up to 15% on gas costs compared to other NFT aggregators when using Uniswap NFT. On top of that, users are now able to swap multiple tokens and NFTs in one swap while saving on gas fees.
The technology behind this upgrade has brought several changes that will drastically improve the way you navigate Uniswap platform in the future.
What Does This Mean for You as a Uniswap User?
The introduction of Universal Router and Permit2 have brought two major improvements to Uniswap users, namely:
- NFT integration & perks
- Improved user experience
Uniswap NFT Integration & Perks
Uniswap’s NFT integration will greatly improve how its users navigate the platform and attract new ones.
Thanks to its NFT aggregator, Uniswap is able to offer users NFTs at better prices without them aimlessly browsing through dozens of marketplaces. Additionally, users will find the NFTs they want for cheaper, smart contracts will be safer, and indexing faster.
Additionally, to welcome Genie users to Uniswap, the largest DEX will airdrop close to 5 million USDC. Each eligible user will get 300 USDT or 1,000 USDC, depending on their involvement with the platform.
Last but not least, the first 22,000 Uniswap NFT users will benefit from gas rebates that will last until Dec 14, 2022. During the promotion, each eligible wallet will receive up to 0.01 ETH rebate on their first transaction.
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Improved User Experience
The introduction of the aforementioned two new smart contracts will significantly improve the way users navigate the entire platform, not just the Uniswap NFT marketplace aggregator.
On top of that, with these contracts being open-source, different decentralized platforms will be able to adopt them in the future. Therefore, Uniswap’s new inventions could affect the entire market.
With an easier and safer way to allow transactions and the ability to include multiple actions into one single transaction, Uniswap has surely set the bar pretty high.
Nare Navasardyan is a writer at CoinStats. She is particularly interested in writing about exciting new DeFi projects and the transformations the world of finance will soon undergo. In her free time, she works on mini documentaries on the cardinal virtues.