Uniswap Launches Its Own L2 Blockchain - Unichain
Unichain is an L2 blockchain built on OP Stack technology and is the newest member of the Superchain alliance developed by Uniswap Labs.
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10/14/20246 min read


What is Unichain?
Unichain is an optimistic rollup optimized for efficient markets by providing fast state updates, providing a framework for applications to internalize MEV, and providing an economic finality system for fast settlement between blockchains.
Unichain is built on the OP Stack technology and is the latest member of the Superchain alliance developed by Uniswap Labs. In addition to Uniswap, Unichain also has the participation of partners including Flashbots, OP Labs, and Paradigm.


Problems solved on Unichain
Unichain, an optimistic rollup built on the OP Stack, aims to address core challenges through two key innovations:
Verifiable Block Building: A block building mechanism in collaboration with Flashbots, initially aimed at providing:
Effective block time of 200-250ms by dividing each block into four "Flashblocks".
Transparently apply priority ordering within each Flashblock, allowing applications to allocate a portion of the maximum extractable value (MEV) for the benefit of users.
Protect trustless transactions from undoing.
Unichain Validator Network : A decentralized network of Unichain node operators, designed to mitigate key risks in block ordering, achieve faster economic finality for rapid cross-chain transaction settlement, and support potential future expansions.
Unichain is built on Superchain, a scalable and interconnected rollup network on OP Stack, as a foundation for seamless liquidity flow. Together with an intent-based cross-chain bridge and fast finality from Unichain Validator Network, the connection to Superchain aims to bring fast, low-cost, and widespread liquidity access to rollup users.
Unichain is being developed through an open-source and iterative process, making the source code available to other rollups on the OP Stack. The features described in this document will be thoroughly tested on a public testnet called Unichain Experimental before being deployed to Unichain mainnet.
Advantages of Unichain
Uniswap's Unichain focuses on 3 main issues related to transaction execution:
High Transaction Speed: Unichain will launch with a block completion time of just 1 second, then gradually reduce to just 250 ms. Reducing transaction latency can significantly improve market efficiency by increasing the frequency of arbitrage transactions and reducing the value lost to MEV.
Reduce costs and increase decentralization : Unichain will reduce Ethereum L1 fees by about 95%, while using only one sequencer. This is similar to many other Ethereum L2s.
Cross-chain liquidity: Unichain is built for seamless cross-chain transactions, starting with native interoperability between chains in the Superchain.
Unichain's unique structure


Unichain combines Uniswap's long-term UX development, Flashbot's extensive MEV research, and OP Stack's infrastructure technology.
Aiming to develop DeFi, optimize MEV, and improve liquidity across the entire market, Unichain has introduced new concepts such as Trusted Execution Environment (TEE), transaction prioritization, and MEV “tax”… To realize these goals, Unichain integrates two outstanding features:
Building verifiable blocks
Unichain Validation Network
1/ Verifiable Block Building:
Unichain uses a new block building protocol, which minimizes MEV loss and improves user experience, with neutrality guaranteed through Rollup-Boost.
Sequencer and Builder Separation: Unichain separates the block building role from the sequencer, using Verifiable Block Builder in a Trusted Execution Environment (TEE). This allows users to verify the order of transactions.


Flashblocks: Flashblocks provide pre-confirmed blocks, reducing latency and optimizing onchain markets. TEEs commit partially to Flashblocks, allowing for faster block creation times.
Trustless Undo Protection: TEE protects users from transaction undoing, making transactions in AMM and intent-based systems more trustworthy.
Future Enhancements: Possible additional features include encrypted mempools, automated transactions, and TEE co-processors for verifiable private computation.


*MEV-tax is a fee imposed by smart contracts on transactions, which can be as a function of the preferred transaction fee. MEV-tax example:
DEX A on Unichain L2 wants to directly extract MEV value from MEV transactions occurring on its exchange. Blocks on Unichain use Priority Ordering, which means that the MEV value of any transaction is determined solely by the priority fee of that transaction.
DEX A sets the MEV tax at 99 times the transaction priority fee. Then, if there is an arbitrage opportunity worth 100 ETH, the MEV searcher can pay a maximum fee of 1 ETH. The priority fee is 1 ETH + 99 ETH MEV fee. If the priority fee is more than 1 ETH, the arbitrage opportunity will be a loss.
For normal users who do not mint MEV, the priority fee will be set much lower (DEX A does not take MEV value from these transactions).
2/ Unichain Validation Network (UVN) and Risk Management
Unichain addresses the risks associated with single sequencer architectures by introducing the Unichain Validator Network (UVN) , a decentralized network of node operators that independently verify the latest state of the blockchain. While rollups benefit from the strong security of the native blockchain, sequencer behavior can impact blockchain availability, MEV momentum, and finality.
UVN is a scalable platform, initially focusing on block verification to increase overall speed.


Two big risks in rollups with single sequencer:
Block Equivocation Risk : The sequencer may propose multiple conflicting blocks at the same height, causing uncertainty about which block will be confirmed last.
Invalid Block Risk : The sequencer may publish an invalid block, which could cause the chain to reverse when error proofs are submitted, adding delay to the final process.
These risks lead to longer blockchain confirmation times, hindering the seamless flow of liquidity between networks. UVN addresses these challenges by using validators to confirm the final block, increasing the speed and reliability of the final process and facilitating cross-chain liquidity.
The Meaning Behind Unichain
1. Solving the MEV problem
Ethereum and Uniswap have high liquidity but are at risk of MEV attacks and have poor scalability.
Current Rollups reduce the load but risk centralizing the sequencer.
Block creation on Ethereum and Rollup involve a public mempool, which allows searchers to extract MEV from users, making MEV primarily beneficial to a few rather than users.
2. Towards cross-chain liquidity
The increase in the number of blockchains leads to liquidity and user fragmentation, highlighting the importance of cross-chain interoperability.
Unichain joins Superchain, partners with OP Labs, deploys native inter-blockchain communication solution in Superchain, aiming to expand to multiple Uniswap blockchains and other blockchains.
Superchain member, Unichain participates in governance and contributes revenue to OP Collective, and has the potential to reduce Ethereum revenue as Uniswap migrates to Unichain.
3. Create comprehensive solutions for users
Unichain will aggregate Uniswap's products and services, creating a comprehensive liquidity ecosystem.
Uniswap V4 will support pool customization, creating more trading options; combining Across Protocol to develop ERC-7683 standard to standardize cross-chain swap, bringing seamless experience to users.
Open application for UNI token
One of the most impactful updates to the UNI token economy is that Unichain requires validators to stake UNI, while also allowing UNI staking to earn fees from being a sequencer.


UNI token revenue sharing. Source: Bread Twitter
This will compensate for not being able to share trading fees with UNI holders, creating cash flow for stakers. Currently, Uniswap is sharing 0.3% of all trading fees with liquidity providers (LPs).
Assuming that the fees will be split at a rate of 0.10% for UNI stakers and 0.20% for LPs , with the current total annual fees remaining at $650 million . Under this split:
UNI stakers will receive $65 million/year , while LPs will share $130 million/year .
With a Fully Diluted Valuation (FDV) of around $8 billion , the P/E ratio for the UNI token would drop to 123 .
While this split could change if community discussions on the “fee switch” generate different levels of revenue from Layer 2 operations, it is still a short-term positive for the growth of the UNI token.


Summary
Unichain solves the most important challenges in Ethereum's rollup-based scaling strategy, especially the problems of liquidity fragmentation and inefficient cross-chain interactions .
Through the introduction of new technologies such as Flashblocks and Unichain Validation Network , as well as integration with Superchain , Unichain aims to become the key platform for seamless transactions on Ethereum and other blockchains. These improvements aim to reduce latency, improve interoperability, and optimize liquidity flows, making transactions faster and more efficient across Ethereum's expanding ecosystem.
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