Native ETH

Welcome back!

In the early days of Uniswap, particularly version 1, native ETH was the cornerstone of many trading pairs. Traders could easily swap between ETH and ERC-20 tokens, without the added step of converting ETH to Wrapped Ether (WETH). This was beneficial for both simplicity and ease of use. However, when Uniswap v2 rolled around, native ETH trading pairs were conspicuously absent. The primary reasons? Implementation complexities and a fear of liquidity fragmentation between WETH and ETH.

Fast forward to Uniswap v4, and we see the grand return of native ETH pairs, thanks to some innovative features: the singleton-style pool management and flash accounting. These mechanisms provide the architecture needed to facilitate both WETH and ETH trading pairs without the aforementioned challenges.

Inclusion of native ETH as a trading pair enhances user experience in multiple ways. For one, it streamlines transactions for users, eliminating the need to manually wrap and unwrap ETH. This also means one less smart contract interaction, which translates to lower gas fees.

The singleton-style pool management makes it easier than ever to manage liquidity for both WETH and ETH pools, effectively addressing liquidity fragmentation. With flash accounting, the efficient handling of tokens extends to native ETH, providing all the same benefits like reduced gas fees and complex trading capabilities.

By reintroducing native ETH pairs, Uniswap v4 manages to strike a balance between simplicity for end-users and flexibility for developers. It's a nod to Uniswap's roots, but with the added benefit of all the technological advancements that have come in the interim.