Uniswap Deploys Smart Contracts on Polygon, Raising MATIC to New Highs

 
Uniswap users voted to instal the exchange's smart contracts on Polygon, raising MATIC to new highs.

The promise of decentralised finance—blockchain-based tools for lending, borrowing, and trading—has been to allow individuals who have been shut out of the financial system to save and invest.

Try explaining that to someone who is making their first deal on Uniswap, a decentralised exchange (DEX) where costs to connect to the Ethereum network can exceed $100.

Layer-2 blockchain and Uniwap Polygon wants to make that anguish go away. Today, they revealed that Uniswap is now available on Polygon, a platform designed to relieve some of the burden on the Ethereum network.

 

Uniswap is governed by holders of its native UNI token, predominantly composed of the exchange's users. Last week, they voted overwhelmingly to deploy smart contracts from the v3 version of the protocol onto Polygon. The deployment was finalized today.

"With this deployment, Uniswap as the flagship Ethereum project returns back to the original promise and again offers low fees and open access to everyone," wrote Polygon co-founder Mihailo Bjelic in an announcement today.

Polygon has been doing the heavy lifting to bring transaction fees down. The protocol sits atop Ethereum but can connect to other blockchains as part of a "multi-chain system." Beyond interoperability, its design promotes scalability by routing Ethereum transactions through sidechains. Essentially, it's like relieving the pressure on a dam by carving a river off to the side.

This results in lower transaction costs, which is a huge plus for Uniswap users, who conduct all of their buy and sell transactions on the blockchain.

The appeal of decentralised exchanges is that you don't have to trust a third-party middleman like Coinbase or Binance to hold your assets in order to make trades. On the down side, you'll be responsible for network transaction fees. The average transaction fee on Ethereum hasn't dropped below $20 since early October, according to BitInfoCharts.

Holders of MATIC, Polygon's own token, which can be used to vote on governance issues as well as pay transaction fees, have welcomed the deployment. The price has increased by 35 percent in the previous week and about 14 percent in the last day, hitting a new high of $2.66.