UNISWAP will officially launch V4 soon. The biggest difference between V4 and V3 is the Hook introduced in V4. In laymans terms, you can customize DEX or other defi projects based on the basic framework provided by UNISWAP V4, which will lead to the emergence of a batch of new DEFI projects. Since all TVLs exist in the singleton contract of UNISWAP V4, the project party does not control the TVL itself, so the hook project is more secure and shares liquidity.
UNISWAP Foundation recently awarded 9 projects a total of $1.2 million in Grants, which were interviewed and screened by Areta, its investment bank (which helped UNISWAP acquire Genie and Sudoswap at a high price). The Grants can be used in two aspects:
1. Full reimbursement of audit fees
2. Provide legal assistance to open source projects that implement BUSL v1.2. It is worth noting that BUSL v1.2 is stricter than uniswap V4’s own use of BUSL v1.1, because the following regulations have been updated:
Any entity that uses innovative key mathematical formulas or substantially similar mathematical formulas to construct the same or similar functions without authorization and declaration shall infringe the relevant intellectual property rights. The innovative key mathematical formula here refers to a mathematical method or algorithm that is original, novel and can realize specific DeFi functions.
Exclusions:
This statement does not apply to the following situations:
Mathematical formulas or algorithms used by existing decentralized finance (DeFi) projects;
Financial mathematics principles, papers and methods that are well known and widely used by the public or have been published;
Comply with legal provisions for fair use, independent research and development, or have obtained legal authorization.
That is to say, not only forks at the code level are considered infringements of intellectual property rights, but forks at the principle level are also considered infringements of intellectual property rights, unless it is stated on the homepage that the principles of these 9 hook projects are used, further protecting the innovative leading edge of UNISWAP V4 and its ecosystem.
Let’s now analyze each of these 9 projects and potential airdrop opportunities one by one:
1.likwid.fi, this project is very interesting. It uses (x+x)*(y+y)=k instead of xy=k to implement the spot leverage trading function without audit and oracle in web3 natively. In other words, meme coins can start leverage trading at the moment of pool opening, including short selling function. Its test network UI style is extremely simple, but from the documents, the team has profound skills. The following functions have been implemented around the minimalist function:
(1) Spot margin trading. While everyone is competing in the swap and prep sectors, likwid.fi is currently the only margin trading project.
(2) LP multiple benefits. In addition to handling fees, LP also provides lending income and liquidation penalties, which improves capital efficiency and yield.
(3) Truncated Oracle: Uniswap innovated a new price mechanism in 2021 to respond to flash loan attacks on multiple DeFi projects that used Uniswap prices as oracles. Likwid is the first project to implement this mechanism to defend against flash loan attacks and liquidations caused by malicious price manipulation.
(4) Structured liquidity: LP providers can choose whether their tokens are loaned out.
(5) Dual clearing mechanisms, including a repayment-based clearing mechanism and a transaction-based simplified clearing mechanism, jointly ensuring timely clearing
(6) Anti-arbitrage and MEV variable rate mechanism, returning the MEV and arbitrage profits generated by liquidation to LP
The likwid test network is now online, and everyone can experience the first unaudited leveraged trading platform of web3.
According to the Twitter information, likwids day 0 operation activity for uniswap v4 is also very interesting. As long as you add liquidity to the default pool of v4 and then confirm it in the likwid wallet, you can get points without taking any risks. Then you can double the points by completing the test network tasks. You can pay attention to it.
2. bunni , currently there is a version based on V3. Bunni based on V4 will provide other functional forms of liquidity density functions (LDFs). Its token LIT has been launched. There is an opportunity to stake V4 to obtain LIT, but currently the annualized rate of pool 1 is generally less than 2%, and the annualized rate of pool 2 is less than 30%. The income is low, and the cost-effectiveness of staking is not high.
3. collarprotocol , a decentralized lending protocol incubated by a16z crypto and orange dao, aims to provide lending services through market makers rather than liquidators. It uses a financial protocol called Prepaid Variable Forward to enable borrowers to eliminate the risk of being liquidated by setting a cap on potential returns. This transaction structure is similar to the collar option strategy, so it is named collar protocol.
Borrowers establish contact with market makers through Collars on-chain RFQ process. After reaching an agreement, market makers create quotes on the chain. After the borrower accepts, both parties provide collateral on demand. This method is called just-in-time liquidity provision. Market makers need to hedge their collateral to eliminate liquidation risks.
Key Features:
(1) High Loan-to-Value Ratio (LTV): Collar offers industry-leading loan-to-value ratios, allowing users to borrow a higher percentage of the value of their assets.
(2) Fully collateralized: Market makers provide collateral in advance and will bear losses if the asset price rises; if the asset price falls, they will make a profit.
(3) Asset agnosticism: Users can borrow any asset provided by market makers.
(4) Credit irrelevance: No need to worry about default risk or counterparty risk.
Collar Protocol’s investors include Z Fellows, Arbitrum Foundation, Druid Ventures, Orange DAO, Nailwal Fellowship, Mac Venture Capital, Long Run Capital, a16z Crypto Startup Accelerator (CSX), J 17 Capital, Fun.XYZ, E V3, L2 IV, Wilson Sonsini, MH Ventures, and angel investors from Orange DAO, Harvard University, and Goldman Sachs.
Collar Protocol is currently in private beta and will not be launched with day 0 of v4.
4. Cork is also a decentralized insurance protocol incubated by a16z crypto and Orange DAO, which aims to provide risk pricing and hedging tools for anchored assets (such as stablecoins, liquidity pledge tokens, etc.) in decentralized finance (DeFi). Its core product is Depeg Swap, a new type of financial primitive that allows investors to hedge and trade the depegging risk of their anchored assets.
Cork allows users to trade between Depeg Swap and Cover Token through its customized automated market maker (AMM) model. The AMM uses a Yield Space curve to ensure that prices gradually stabilize as expiration dates approach and provide flexibility in the event of a depegging event.
The main functions are
(1) Depeg Swap: This is a tool that allows users to hedge the risk of depegging of anchored assets. Through Depeg Swap, users can make a 1:1 exchange between anchored assets and underlying assets, thereby protecting the value of their assets in the event of a depegging event.
(2) Cover Token: The holder acts as an insurer of the risk and can obtain all assets in the Peg stable module when the agreement expires. This provides risk premium income for the insurer and provides protection for the buyers of Depeg Swap.
(3) Peg Stability Module: This module receives the underlying asset (such as ETH or USDC) and creates Depeg Swap and Cover Token. It acts as the core of the protocol, ensuring the stability and liquidity of the anchored asset.
(4) Liquidity Vault: Users can deposit underlying assets into the liquidity vault to provide liquidity, mint and sell Depeg Swap, and collect system fees. This provides benefits to liquidity providers while reducing the cost of obtaining Depeg Swap guarantees.
Cork In September 2024, Cork received support from several well-known investment institutions including Andreessen Horowitz (a16z), IDEO Ventures, OrangeDAO, Outliers Fund and Steakhouse Financial.
Cork is currently running its second testnet trading competition in preparation for the mainnet launch. According to Twitter, the team has no day 0 operations based on v4.
5. Gamma Strategies is a limit order hook. Users can get maker fees after their limit orders are executed. This is a tool-type and swap-related hook and it is estimated that no coins will be issued.
6. Lumis: It can create synthetic ETH and synthetic stablecoins with dynamic impermanent loss hedging functions. It is not expected to be launched with v4 day 0. The project is small in scale and has only 900 followers on Twitter.
7. Tenor is a decentralized lending protocol that aims to enable peer-to-peer fixed-rate lending through an on-chain interest rate order book. Tenors architecture supports an on-chain interest rate order book, allowing users to trade interest rates in a manner similar to Uniswap trading prices. The order book natively supports limit orders, enabling borrowers and lenders to enter into transactions at a specific interest rate before expiration, thereby reducing interest rate slippage and reducing dependence on liquidity providers.
Currently, the tenor testnet has been launched, but it is not yet known whether it will be launched together with v4 and provide staking incentives.
8.Paladin is a decentralized governance protocol that aims to unlock the value of DeFi through governance rights and markets. Its main product, Quest, allows users to earn rewards by voting for specific liquidity pools (Gauges) in ecosystems such as Curve, Balancer, and Bunni. Users holding CVX, AURA, and LIQ tokens can also delegate their voting rights to Paladin to maximize returns across all incentive platforms.
The main functions are as follows:
(1) Quest: Users can participate in Quests to earn rewards by voting for specific liquidity pools. Before voting, make sure your voting rights are available and that previous votes have been removed from the corresponding pool (there is a 10-day cooldown between each vote). Voters can split their voting rights, vote for multiple pools at the same time, and earn rewards from multiple Quests.
(2) Voting Delegation: To simplify the process of earning and receiving voting rewards, Paladin sets up a delegation address to optimize bribery. This is very beneficial for voters who want to earn rewards passively. Voters holding vlCVX, vlAURA, or vlLIQ can delegate their voting rights to Paladin to optimize their votes across all incentive platforms.
(3) Governance participation: Paladin’s governance voting is currently conducted through Paladin’s Snapshot space. To create a proposal in this space, your address needs to be delegated to hold 5% of the circulating PAL. The quorum is 15% of the circulating supply.
Because its token pal is already online and has clear emission rules, there is no potential airdrop opportunity.
9. Unicord: Integrates and maximizes the returns of stablecoin pools through lending protocols. The test network is not yet online and there is no official website link.
Under the current situation of the overall downturn of the EVM ecosystem (the monthly transaction volume of the Solana chain exceeded US$200 billion for the first time, and also exceeded the total of all EVMs), the EVM ecosystem urgently needs hard-core innovations at the Web3 native level such as Uniswap v4 to prove that the EVM ecosystem is the innovation leader in the industry. There is a sense of mission that the burden of the big EVM, 8 chains and 24 L2s are all on the shoulders of Uniswap. Therefore, all major EVMs, whether L1 or L2, are likely to make huge moves in conjunction with the launch of Uniswap v4.
At the same time, the Trump family launched the decentralized finance (DeFi) project World Liberty Financial (WLFI) and purchased ETH and other DeFi tokens in large quantities. These moves may trigger the outbreak of the modular DeFi industry narrative. The above 9 hook projects have been carefully selected by Uniswap officials and are very likely to produce several huge alphas. It is recommended to pay close attention.
