Uniswap Introduces Auto Router Support on Layer 2 Networks

Uniswap Labs – the developers behind Uniswap, the largest exchange in DeFi – released a series of important features to enhance pricing as well as optimize the gas cost of swaps.

What Does the Update Have in Store?

Uniswap Labs have now released an updated Auto Router that enhances trade prices to a greater extent by routing trades across both Uniswap v2 and v3 pools. With this, users will be able to track the true cost of a swap in real-time directly from the App interface. In addition to optimizing the gas costs, the new release also finds the best price across all Uniswap protocols.

Another major development that accompanied the update was Auto Router supporting both Optimistic Ethereum and Arbitrum. The changes aim to provide an overall cost-effective trading experience with the help of efficient trade pricing coupled with the low gas costs of a Layer 2 network.

Besides, the Uniswap App will now feature a USD estimate of the gas fee before submitting a swap. With the help of gas estimates, the app will also automatically set slippage based on traders’ expected gas cost as well as trade size.

The Initial Release

Since the launch of Auto Router three months back, Uniswap Labs revealed that it was a “major win” for the v3 users. According to the platform’s analysis, Auto Router enhances pricing for 13.97% of all trades and 36.84% of trades between the ten largest tokens in terms of total value locked (TVL).

Earlier in September, Uniswap Labs deployed three essential elements – split routes, a more powerful algorithm, and gas cost awareness.

Split routes enabled users to execute trades across multiple pools simultaneously by splitting them. This is very much unlike the traditional router, where only a single route is used for trade execution. With the Auto Router, traders were able to split trades across up to seven paths which allowed them to benefit from liquidity depth in different pools.

It also explored liquidity at greater depth, thereby allowing efficient execution, especially on a large trade. Additionally, the release also enabled gas costs to optimize users’ effective prices, which reduced the number of gas-intensive hops to reach the output token and facilitate the more efficient execution of smaller trades.

Uniswap’s Trajectory

Despite the emergence of several platforms in the decentralized economy, Uniswap continues to enjoy its position as the DEX market leader. According to the latest chart compiled by Dune Analytics, Uniswap’s share in the DEX market stands tall at 78%, followed by its rival SushiSwap with a share of 8%.