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A collaboration between the blockchain composability startup Enso and cross-chain interoperability protocols Stargate Finance and LayerZero has opened the floodgates for billions of dollars in liquidity to flow from Ethereum into Uniswap’s dedicated Layer-2 network, Unichain.
They’re making it dramatically easier for liquidity providers to shift their funds from the older Uniswap v2 and v3 platforms to Uniswap v4 on Unichain with the launch of a novel, one-click migration tool. The big promise is that it eliminates all of the hassles and worries of moving funds across decentralized networks.
Enso says it has ambitions to orchestrate what could become one of the most consequential asset transfers in the history of Ethereum, potentially facilitating the transfer of more than $3.5 billion worth of crypto that’s currently deployed in Uniswap’s liquidity pools.
They’re trying to encourage LPs on Uniswap v2 and v3 to move their capital to Uniswap v4 on Unichain, which launched its testnet in October, but has struggled to attract the kind of funds it’s designed to handle.
Uniswap is expecting big things from Unichain, as the L2 has been specifically optimized to handle the insane transaction volumes seen on the world’s most popular decentralized exchange. Billed as a “Superchain L2”, it’s capable of processing thousands of transactions per second with sub-second finality and ultra-low costs, making it ideal for the demands of big-money DeFi traders.
Unichain promises to lower transaction costs by up to 95% while providing an additional finality layer to eliminate the risk of conflict. Novel features include its 250 millisecond “sub-blocks” and improved transaction ordering transparency, enabling almost instantaneous swaps to boost market efficiency and stave off pesky MEV attacks.
Unlocking Liquidity
The performance benefits of Unichain are clear, but the vast majority of Uniswap users are yet to enjoy them, because the difficulty of moving their funds to Ethereum is off-the-scale. Some users have reported having to go through nine separate steps to complete the process of moving liquidity to Unichain – it’s a major operation, and not surprisingly, the vast majority of LPs simply haven’t bothered.
With Enso’s new migration solution, all of that complexity is being stripped away, with users able to migrate, bridge and redeploy their funds on Unichain with just a single click.
Creating this solution was the perfect challenge for Enso, which sees itself as a kind of middleware provider that brings a low-code-like experience to Web3 users. It’s a leader in the emerging discipline of intent-based architectures, abstracting away all of the hassles of step-by-step smart contract interactions, so users can just do what they wanna do, securely, quickly. It works by translating user’s intents into automated actions, processing them under the hood. Enso says it couldn’t have come up with its one-click liquidity migration tool without the assistance of Stargate and LayerZero. Stargate has built a seamless, easy-to-use bridge that integrates with LayerZero’s blockchain communication protocol to facilitate simple and secure messaging between decentralized networks and unify liquidity across them. It eliminates the need to wrap tokens and provides immediate finality for all transactions.
Enso co-founder Connor Howe said the collaborators have built the “missing piece of the puzzle” for Unichain to finally start getting real traction, giving liquidity providers the ability to redeploy funds with minimal hassle.
“Uniswap LPs are about to trigger one of the largest liquidity migration events in Ethereum’s history,” he promised.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.