What’s New in Uniswap V4: Key Changes and New Protocols

Uniswap V4 officially launched on 30 January 2025, introducing a set of architectural changes to improve how liquidity pools are created and managed, how trades are processed, and how crypto developers can extend the protocol’s core functionality. By late July 2025, Uniswap’s TVL had grown to over $1 billion, marking a significant milestone for the protocol. In this article, DWF Ventures outlines the main technical updates in V4 and highlights some of the first protocols to build on them.

Uniswap V4: New Features Overview

Among the multitude of changes that Uniswap V4 introduced, there are a few key aspects to take note of:

• Hooks: Modular smart contract add-ons that let developers customize pool behavior.
• Flash Accounting System (FAS): A new settlement mechanism for more gas-efficient swaps.
• Native $ETH Support, No More Wrapped Ether (WETH): Enables direct $ETH trading without the need to wrap into WETH, reducing $ETH swap gas fees by around 15%.
• Singleton Contract Model: A single contract managing all pools to reduce costs and complexity.

These features, along with other notable advantages such as a comprehensive dashboard, work together to make Uniswap V4 more flexible and efficient than its predecessors. Let’s break down each technology and explain its significance for various kinds of Uniswap and DeFi users.

Hooks

Hooks are external smart contracts (similar to plugins) that developers can attach to liquidity pools to customize actions at various stages of a swap or liquidity event. In earlier versions, Uniswap’s pool logic was fixed, adding new functionalities often required forking the codebase. Now in V4, developers can simply plug in a hook to introduce custom behavior such as dynamic fee schedules, automated yield farming strategies, time-based liquidity incentives, advanced oracles, or risk management controls. This unlocks a wide range of possibilities for unique, tailored interactions within the protocol, without needing to build a new automated market maker (AMM) from scratch.

For liquidity providers (LPs) and crypto traders, hooks create new profit opportunities and strategies. LPs can automate complex position management or fee optimization that was previously impossible under standard AMM frameworks. Traders can benefit from features like on-chain limit orders or MEV-resistant swaps implemented via hooks as well. Essentially, Uniswap V4 becomes an extensible platform, much like a DeFi “WordPress”, where hooks serve as plugins to add custom functionality on top of the core protocol.

As of mid-2025, developers have created over 2,500 hook-enabled pools, exploring functionalities such as Time-Weighted Automated Market Maker (TWAMM) for time-weighted pricing, whitelist gating, Maximal Extractable Value (MEV) rebate distribution, privacy-preserving swaps, savings vaults, impermanent loss hedging, and more. The hook system has fostered a growing library of modular add-ons, making it easier for teams to experiment and innovate on top of Uniswap.

To accelerate this ecosystem, Uniswap Labs launched the Hook Incubator program, supporting teams that build hook-based applications. This has led to practical implementations such as dynamic fees that adjust with volatility, “just-in-time” liquidity provisioning that injects capital only when needed, and hooks that route MEV gains back to LPs instead of external actors.

Flash Accounting System (FAS): Better Gas Efficiency

The Flash Accounting System (FAS) in Uniswap V4 is designed to streamline asset transfers and significantly reduce gas costs during transactions. In Uniswap V3, every swap would transfer tokens in and out of the pool contract for each step, incurring multiple high-cost operations. V4’s flash accounting changes this by settling only net balances at the end of a transaction. All intermediate token debits and credits are tracked internally and netted out, so the actual token transfer happens just once per token at final settlement. This eliminates redundant token movements within multi-step swaps.

In practical terms, FAS means fewer writes to the blockchain per swap, yielding lower gas fees for users. High-frequency traders and arbitrage bots in particular benefit from this efficiency, as it lowers the cost per trade and makes strategies that involve many rapid swaps more viable on Uniswap. 

Native $ETH Support: No More Wrapped Ethereum

Uniswap V4 introduces native $ETH trading, removing the requirement to wrap $ETH into $WETH before swapping. With V4, $ETH can be traded directly within the protocol while still maintaining compatibility with ERC-20 liquidity pools through internal handling.

For users, this change simplifies the trading process and lowers costs: direct $ETH swaps in V4 consume roughly 15% less gas compared to the equivalent $WETH route. This makes frequent $ETH trading more efficient and also reduces friction for new users unfamiliar with token wrapping. And for liquidity providers, native $ETH support can help attract more swap volume into $ETH pairs by removing a common point of confusion and unnecessary cost.

Singleton Contract Model: One Contract to Rule All Pools

Uniswap V4 also introduces the so-called Singleton contract model—essentially “one contract to rule them all.” In Uniswap V3 (and earlier), each liquidity pool was a separate smart contract deployed on-chain. Creating a new trading pair meant deploying an entirely new contract instance, which was gas-intensive and led to thousands of pool contracts living on Ethereum. Uniswap V4 replaces that with a single PoolManager contract that holds and manages the state for all pools collectively. When a new pool is initialized in V4, it doesn’t spawn a new contract, it simply registers the pool’s parameters within the unified PoolManager contract.

For Uniswap users, the Singleton model also leads to more seamless and efficient trades via optimized swap routing, as depicted on the scheme below: 

Additionally, the unified architecture has made Uniswap V4 highly multi-chain friendly. The core V4 contracts have been deployed to numerous Ethereum-compatible networks with minimal friction. All these deployments use the same singleton design, so developers and LPs get a consistent experience across chains. 

Uniswap V4: Notable Protocols Building on V4

With Uniswap V4’s capabilities unlocked, a new wave of DeFi protocols has emerged to leverage its features. Here we highlight a couple of the early projects taking advantage of hooks and other V4 innovations, as well as mention other notable developments in the V4 ecosystem.

Bunni

One of the flagship protocols built on Uniswap V4’s technology is Bunni. Bunni is a DeFi infrastructure designed to maximize LPs’ capital efficiency by introducing advanced liquidity management and optimization mechanisms. It essentially acts as a smart layer on top of Uniswap V4, using hooks to automate and enhance how liquidity is provided.

By addressing some pitfalls of Uniswap V3’s Concentrated Liquidity AMM (CLAMM) model, Bunni helps LPs get the most out of V4. It automates liquidity provisioning shapes and even captures value that would normally be taken by MEV bots (e.g. via MEV-resistant strategies), redistributing it back to LPs. By mid-2025, Bunni had emerged as one of the most active hook implementations on Uniswap V4, with third-party dashboards and ecosystem reports showing substantial volume across its pools; however, precise cumulative totals differ by source, so we avoid quoting a single figure. 

Silo Finance

Another notable project leveraging V4’s hooks is Silo Finance, which uses Uniswap V4 to power isolated lending markets (“silos”). Each silo on Silo Finance is essentially a standalone lending pool for a specific asset, and thanks to hooks, these can be deployed permissionlessly and with extended functionality. In traditional lending protocols, pooling many assets together introduces cross-contamination risk, where problems with one asset, such as a price crash or exploit, can spread losses to all assets in the shared pool. Silo Finance avoids that by isolating risk per market: each asset has its own independent lending pool, so if one market fails or gets exploited, the others remain unaffected. This design allows anyone to create a lending market for any token via a Uniswap V4 hook without exposing the rest of the protocol to that asset’s risk.

Essentially, Uniswap V4 provides the backbone (the pool and swap logic), and Silo’s hooks add lending-specific features on top. This architecture ensures that issues in one silo do not affect others, since each market’s logic is isolated by its hook. 

Several silo markets are already live, with support for assets like $ETH, stablecoins such as Falcon Finance;s $USDf, and other notable ERC-20 tokens. Protocol’s growth has been strong—Silo Finance’s total value locked has grown from $85 million in late 2024 to over $200 million by mid-August 2025.

Silo V2 launched in March 2025 on the Sonic blockchain. Silo’s V2 upgrade refines their isolated lending model by introducing permissionless, twin‑asset lending markets built with hooks. Deployed markets can define loan-to-value (LTV) ratios, interest rate models, oracle sources, liquidation logic, and optional hooks for features like liquidity routing, KYC gating, or deployer revenue via NFTs.

EulerSwap

Beyond Bunni and Silo, there is EulerSwap, a customized automated market maker that brings a uniquely capital-efficient twist to DeFi by combining Uniswap V4’s hook architecture with Euler’s lending vault infrastructure. Launched in beta in mid‑June 2025, EulerSwap allows LPs to deposit assets into Euler vaults that serve simultaneously as liquidity, collateral, and lending yield, enabling just-in-time borrowing, custom AMM curves, and impermanent-loss hedging strategies all in one. This setup improves capital efficiency by reducing fragmentation and cleverly retains compatibility with Uniswap’s routing for a seamless swap experience.

Other Emerging Protocols

A growing range of other projects is also tapping into Uniswap V4’s hook architecture to deliver new DeFi functionality. 

Flaunch, another new platform, uses hooks to create a fair launchpad for memecoins with features like automated fee buybacks and time-locked pricing to dampen volatility. 

In the realm of MEV protection, Angstrom by Sorella Labs is a Uniswap V4-based DEX that implements an App-Specific Sequencer (ASS) via hooks to control transaction ordering (mitigating front-running) and auctions off ordering rights to reward LPs. 

And protocols like Cork are utilizing V4 hooks to create entirely new financial primitives.In Cork’s case, markets for hedging against stablecoin or liquid staking token depegging events. This is only a sample of the innovation springing up around Uniswap V4. 

Conclusion

We reviewed some of the most transformative features of Uniswap V4. By introducing hooks, flash accounting, and the singleton architecture, Uniswap V4 greatly enhances customization, reduces costs, and streamlines liquidity management compared to V3. These innovations benefit both liquidity providers and crypto traders, enabling more efficient swaps, dynamic fee or liquidity strategies, and better risk management options. 

Initially started as a DEX, Uniswap is now solidifying its role as a leading infrastructure provider, a platform that developers can plug into to create novel financial applications. As the ecosystem of hooks and V4-based protocols expands, Uniswap continues to drive innovation in decentralized finance and redefines what a DEX can do in 2025 and beyond.

If you are building hooks or protocols around Uniswap V4 and are searching for a crypto venture capital partner, feel free to reach out to DWF Ventures.

Disclaimer: This article is intended for general informational purposes only and does not constitute financial advice. Readers should conduct their own research and consult with a professional advisor before making any investment decisions.