Due to inherent characteristics such as congestion in the on-chain environment, manipulable miner sequencing , and susceptibility of AMM price mechanisms to market fluctuations , the current DeFi experience struggles to match that of centralized exchanges.
In order to advance on-chain trading and improve the experience of self-custodial swaps, Uniswap has announced the launch of UniswapX, a permissionless, open-source protocol based on Dutch auctions. UniswapX enables trading across AMMs and other liquidity sources.
Currently, a test version of the protocol is being launched on the Uniswap Labs interface, specifically for the Ethereum mainnet, with plans to expand to other chains and Uniswap wallets in the future.
UniswapX aims to gradually achieve the following:
Aggregating liquidity sources to improve exchange rates
Mitigating MEV (Miner Extractable Value) vulnerabilities
Providing gasless transactions for swaps
Zero cost for failed transactions
Expanding to support cross-chain, gasless transactions within a few months.
UniswapX has introduced a network of off-chain node providers called the Relay Network. These nodes are responsible for collecting user orders and establishing a local order book, which is shared among other nodes. This system enables the prevention of MEV and facilitates gasless transactions. The orders are eventually packaged and executed on-chain, completing the state transitions of the orders.