Uniswap’s Layer 2 solution Unichain based on OP Stack is about to be launched. What will be the impact in the future? This article originates from articles written by Eren and Heechang, compiled and compiled by Vernacular Blockchain. (Preliminary summary: UNI is about to take off? Annual fees exceeding US$360 million may be paid directly to Uniswap holders after the launch of Unichain) (Background supplement: UNI soared by 18%! Uniswap launched its own L2 "Unichain", slapping V God and V in the face Predicted years ago) In 2022, Dan Elitzer mentioned that Unichain is an inevitable development, believing that it will emerge due to the inefficiency and value loss in the existing Uniswap system. He noted that Uniswap traders currently face three costs: exchange fees paid to liquidity providers, transaction fees paid to Ethereum validators, and MEV costs. This prediction has now come true, with Uniswap, the most widely used decentralized trading protocol in crypto, announcing the launch of its own Layer2 solution, Unichain. This Rollup based on OP Stack aims to solve key challenges in the DeFi ecosystem, focusing on improving the DeFi transaction execution environment, enhancing user experience, and solving the problem of liquidity fragmentation. 1. Background: The rationale behind Unichain 1) Dan Elitzer’s prediction Dan’s research revealed that the transaction fees and MEV costs paid to Ethereum validators and market makers exceed the exchange fees earned by liquidity providers. This means that entities outside Uniswap are in a more advantageous position in terms of value acquisition, resulting in the value that should belong to Uniswap users, liquidity providers or UNI Token holders being extracted externally. To summarize his argument about the necessity of Unichain: Unichain can help reduce inefficiencies in value capture due to transaction fees and MEV costs, thereby bringing more value to UNI holders. Operating its own chain will allow Uniswap to significantly reduce transaction fees, especially to the benefit of small traders. Additionally, solutions like threshold encryption or batch swaps can help traders minimize MEV costs. The most significant advantage of Unichain is its ability to better incentivize Uniswap participants. Currently, UNI Token holders have limited value capture options, mainly limited to governance decisions such as adjusting exchange fees. A dedicated chain will enable UNI holders to profit from transaction fees and internal MEV, enhancing the Token’s value proposition. This approach will not only reward UNI holders, but also create a more efficient trading platform for users, potentially cementing Uniswap’s position as a leading decentralized trading platform. 2) Unichain: Capture more value, unify the platform Source: Uniswap, Flashbots and OP-Stack: The trinity behind Unichain — 100y Unichain is built as a Superchain using OP Stack, introducing two major innovations to improve L2 blocks chain efficiency, user experience and liquidity management. The first key feature is Verifiable Block Building developed in partnership with Flashbots. This system includes a mechanism called Flashblocks, which speeds up state updates by dividing each block into four sub-blocks, reducing the actual block time to 200-250 milliseconds. Additionally, Unichain uses a Trusted Execution Environment (TEE) to decouple sequencers and block builders and tax MEV opportunities through a prioritization mechanism, allowing applications to directly extract and internalize MEV. The second major feature is the Unichain Validation Network (UVN), a decentralized node-operated network that independently verifies the state of the blockchain. UVN provides fast finality and settles cross-chain transactions with economic security. When a new block is created on Unichain, validators must prove the chain’s legitimacy, thereby reducing the security risks posed by a single orderer. To become a validator, one must stake UNI, and based on the stake weight, if selected into the active node set, they will perform verification and receive rewards accordingly. This operating model allows UNI holders to delegate their stakes to validating nodes and receive distributed rewards. 2. Key points: The development direction of DeFi proposed by UniChain. DeFi no longer just stays in a single application, but has chosen an increasingly complex development path. DeFi applications are actively internalizing the value they generate, operating their own application chains or L2s, and developing wallet services. Application-Specific Sequencing (ASS), which allows applications to extract MEV directly, has also received much attention.Among these trends, the launch of Unichain clearly demonstrates a future: DeFi with enough users and scale will ensure the security of its own infrastructure. 1) DeFi is becoming more and more "fat". DeFi is choosing more complex development methods to internalize the value that was originally extracted from the outside, improve user experience, or provide independent "money Lego" through the interoperability of its own financial products. . This trend is manifested by some applications that do not use L2 or L3 execution opting for the ASS design to prevent exposure to MEV extraction when ordering transactions. For example, controlling the ordering of transactions that rely on external oracle data allows applications to directly capture MEV (Oracle Extractable Value, OEV), or prevent MEV exposure by using a solver network for intent-based batch auctions. Other applications develop auxiliary infrastructure, such as application-optimized wallets or mobile interfaces, to improve user experience and prevent value from flowing to external third-party infrastructure. A. Application Specific Sorting (ASS): CoW AMM CoW AMM protects liquidity providers (LPs) from MEV by packaging transactions into a single off-chain batch and auctioning the arbitrage portion. In CoW AMM, solvers compete for the right to rebalance the CoW AMM pool whenever an arbitrage opportunity arises. The solver that provides the most favorable trading conditions for LPs and leaves the most profit (residual) for the liquidity pool will gain the right to rebalance the pool. Through this batch auction, CoW AMM is able to capture the MEV value extracted by arbitrage bots when the liquidity pool rebalances price differences and eliminates the rebalancing loss risk (LVR) of LPs. B. Mobile terminal/wallet: Jupiter/Uniswap wallet Judging from the current market share of devices used by people, mobile devices account for 63%, while desktop devices account for 37%, indicating that the mobile device environment has grown significantly. Therefore, building a mobile environment has become increasingly important in encrypted application development...