Uniswap v3 protocol will become free to use after business license expires on April

In the world of decentralized finance (DeFi), Uniswap has become a household name. Launched in November 2018, the decentralized exchange (DEX) quickly became one of the most popular platforms for swapping cryptocurrencies.

In May 2021, the much-awaited Uniswap v3 was launched with several new features, including concentrated liquidity and multiple fee tiers. However, one of the biggest criticisms of Uniswap has been its high gas fees, making it less accessible for smaller traders. This might change soon as the Uniswap v3 protocol will become free to use after the business license expires on April 2023.

Uniswap was initially released under a business license that allowed the company to generate revenue from the platform's usage. The license required users to pay a 0.05% fee on every trade, with a portion of the fee going to the Uniswap team as revenue. This fee was in addition to the high gas fees that users had to pay to execute trades on the Ethereum network. While the fee was not a significant burden for larger traders, it made it difficult for smaller traders to use the platform.

The decision to charge a fee was controversial from the start, with many in the DeFi community arguing that a decentralized exchange should not charge fees. However, the Uniswap team defended the decision, stating that the fees were necessary to fund ongoing development and maintenance of the platform. The team also argued that the fees would incentivize liquidity providers to add liquidity to the platform, resulting in better prices and deeper liquidity.

Despite the controversy, Uniswap remained one of the most popular DEXs, with a reported trading volume of over $1 billion per day at its peak. However, as gas fees on the Ethereum network continued to rise, the cost of using Uniswap became prohibitive for many users. Some users turned to other DEXs with lower fees, while others waited for the release of Uniswap v3, which promised to address the issue with concentrated liquidity.

Uniswap v3 was launched in May 2021 with several new features, including concentrated liquidity and multiple fee tiers. With concentrated liquidity, liquidity providers could choose a specific price range for their liquidity, resulting in better prices for traders. The multiple fee tiers allowed traders to choose between three different fee levels, depending on the level of slippage they were willing to accept. However, even with these new features, the high gas fees on the Ethereum network continued to be a barrier for many users.

Now, the Uniswap team has announced that they will not renew the business license for Uniswap v3 when it expires in April 2023. This means that after April, the protocol will be free to use, with no trading fees or revenue going to the Uniswap team. The team has stated that they will continue to support the platform through ongoing development and maintenance, but they will no longer generate revenue from its usage.

The decision to make Uniswap v3 free to use is significant for several reasons. First, it addresses one of the most significant criticisms of the platform: the high fees. Without trading fees, the platform will be more accessible to smaller traders who were previously deterred by the fees. This could result in increased adoption and usage of the platform, which could, in turn, result in better liquidity and prices.

Second, it demonstrates the Uniswap team's commitment to the principles of decentralization. By not renewing the business license, the team is relinquishing control of the platform's revenue and allowing it to be truly community-owned and operated. This is a significant departure from the traditional business model of centralized exchanges, where fees and revenue are generated by a central authority.