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The largest decentralized exchange, Uniswap, published details of a major update on Wednesday that has been long-awaited by traders. 

The update, known as Uniswap v3, is set to launch May 5. It promises improved capital efficiency orders of magnitude higher than the current iteration. 

A much-watched integration that will reduce transaction costs will be implemented in the middle of May. The details were published in a white paper first reported on by The Block

Uniswap sees over $1 billion in trading volume daily, making it among the largest exchanges in cryptocurrency markets overall, decentralized or not. 

By comparison, Kraken, which ranks third among centralized exchanges by trading volume, sees just over $1 billion traded daily, according to Coingecko data. Coinbase Pro registers over $2 billion in volume a day while leader Binance has over $20 billion traded on its platform daily. 

Uniswap is a platform that allows any Ethereum user to provide liquidity to any token pair. All the funds are held in smart contracts on the Ethereum blockchain, not by a centralized party. Its growth has been explosive, with over $100 billion traded since it launched in late 2018. 

The biggest change in Uniswap v3 will be finer controls over liquidity pools for providers. Liquidity providers will be able to specify a price range for their pooled funds, allowing them to potentially earn more fees and improve the market depth of a trading pair. Uniswap calls this new feature concentrated liquidity. 

The concentrated liquidity feature is expected to improve capital efficiency by 4,000-fold, according to the Uniswap v3 white paper. 

"The story of Uniswap v3 is that execution quality is about to improve by an order of magnitude, if not more,” Uniswap founder Hayden Adams told The Block.

Uniswap has also set a mid-May date for integrating with Optimism, one of the solutions to Ethereum's overloaded network. Transaction fees, or gas, on the Ethereum network has been at historic highs since last summer as usage of decentralized finance, or DeFi, protocols have surged. 

Teams have scrambled to unveil fixes to the problem using so-called layer two solutions. These allow a larger volume of transactions to take place off the main Ethereum network, but linked back to it using cryptographic and other techniques. 

One of the most hotly anticipated solutions is from the startup Optimism, which has been endorsed by Ethereum inventor Vitalik Buterin, and has raised $25 million from Andreessen Horowitz and others last month. The solution uses a technology known as Optimistic Roll-ups, and promises greater throughput without sacrificing security. 

Uniswap plans a mid-May deployment on Optimism, which will take place soon after its third version goes live on Ethereum's main network. The solutions used by major decentralized applications like Uniswap could determine where the majority of activity takes place on Ethereum over the next several years, as a major upgrade of the Ethereum network itself, known as Eth 2.0, is underway.