Will hooks and incentives drive migration?

Key Insights

• Uniswap V4 adoption has lagged behind past upgrades – Unlike V2 and V3, which quickly gained market share, V4 has struggled to gain traction, accounting for less than 1% of total Uniswap volume two weeks after launch.
• There is uncertainty over whether any hooks have introduced meaningful improvements – So far, most hooks replicate existing use cases with minor enhancements rather than unlocking entirely new functionality.
• Adoption may pick up as more hooks launch and liquidity incentives take effect – Uniswap’s upcoming V4 liquidity incentive program aims to attract LPs, swappers, and developers, potentially accelerating migration.
• V4’s developer-driven approach means adoption will take longer – Unlike previous upgrades where Uniswap launched new DEX models, V4 relies on external teams to build and deploy hooks, leading to a slower transition.

On January 31st, after its initial announcement in June 2023, Uniswap officially launched Uniswap V4, introducing hooks and a singleton contract. Previous upgrades, such as V2 and V3, brought fundamental changes to the AMM model—V2 enabled liquidity provision for any asset, while V3 introduced concentrated liquidity. With V4, the question remains: will it have a similar impact on AMM adoption?

Revisiting Uniswap V4