How does Uniswap reduce gas costs?

Uniswap reduces gas costs through a few key strategies:

1. Singleton Contracts: This design drastically reduces the duplication of code across multiple smart contracts. Earlier versions had separate contracts for each pool, which repeated the same code. By moving to a singleton design, Uniswap V4 reduces the gas cost of pool deployment by around 99%, from potentially over $1,000 to approximately $10 in some cases. This is because updates now modify an existing contract rather than deploying a new one 1.

2. Native ETH Pools: Bringing back native ETH pools in Uniswap V4 provides additional gas savings for transactions involving ETH. This move allows treating ETH as an ERC-20 token without the need for a separate codebase for Wrapped ETH. By using native ETH pools, significant savings in gas fees are achieved 2.

3. Flash Accounting and On-Contract Holdings: Uniswap V4 allows token holders to keep their tokens within the Singleton contract and sell them later. This avoids the gas costs associated with transferring tokens in and out of the contract. This mechanism benefits users who intend to trade frequently, producing even more gas savings 2.

4. Netting and Batching: Uniswap employs strategies such as batching multiple transactions and netting trades that occur in the same direction simultaneously. This reduces the overall gas costs and also works towards improving price efficiency for swappers 3.

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     1

     Singleton Contracts

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     2

     Uniswap v4 Benefits

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     3

     Blockchain Optimization Insights

     00:11:55

These innovations collectively enable Uniswap to significantly cut down on gas costs, making it more efficient and competitive, especially compared to centralized exchanges.