Uniswap, a decentralized exchange (DEX) running on the Ethereum blockchain, enables users to trade a variety of digital assets through an automated market maker (AMM) model, eliminating reliance on traditional order books.

Conceived in 2018 by Ethereum developer Hayden Adams, Uniswap has emerged as a leading player in the DEX sector, boasting substantial trading volumes and deeper liquidity than its counterparts. As of 2023, it stands among the top DEXs based on metrics like trading volume, liquidity, and active user count.

Uniswap's evolution includes the launch of Uniswap V1 in 2018, introducing the Constant Product Market Maker (CPMM) model. Despite its groundbreaking nature, Uniswap V1 had limitations, prompting the release of Uniswap V2 in 2020. This version addressed challenges by allowing direct token-to-token swaps, introducing flash swaps, and incorporating Time Weighted Average Prices (TWAP).

In 2021, Uniswap V3 aimed at enhancing capital efficiency and concentrated liquidity. It introduced customizable price ranges for liquidity providers, multiple fee tiers, Non-Fungible Liquidity (NFL), and integration with Ethereum's Layer 2 solution, Optimism.

Uniswap V4, while not officially launched, reveals potential features in its draft code:

"Hooks" and Custom Pools: Uniswap V4 introduces "hooks," enabling customization throughout a liquidity pool's lifecycle. Developers can utilize hooks for dynamic fees, on-chain limit orders, or time-weighted average market making (TWAMM), offering flexibility in creating tailored liquidity pools.
Singleton: Unlike Uniswap V3, where each liquidity pool had a separate contract, Uniswap V4 consolidates all pools into one contract, resulting in significant gas savings.
Flash Accounting: Uniswap V4 employs flash accounting, minimizing external transfers until the end of operations, simplifying pool activities and reducing costs.
Native ETH Trading Pairs: Uniswap V4 reintroduces native ETH trading pairs, eliminating the need for users to wrap ETH to WETH before trading, thus reducing gas costs.

Uniswap V4's potential features signify advancements in customization, gas efficiency, and native ETH trading pairs, promising a more versatile and economical decentralized exchange experience.