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Uniswap v1

Uniswap v1. Hayden Adams.

A pool holds ETH and one ERC-20. The product of the reserves is constant. Anyone can trade against the pool or add both assets.

A reading of the public document. Not a copy of it, and not a claim about a later network that reused the name.

Cite v1 when the design is ETH-paired constant product. Cite v2 or v3 when the deployment is actually that.

The five-minute read

The defect

Order books need market makers who show up. A chain with sporadic users needed a market that was always willing to quote.

The rule

A pool holds ETH and one ERC-20. The product of the reserves is constant. Anyone can trade against the pool or add both assets.

How it is put together

One pair per contract, and one side is ETH. The price is the ratio of reserves. Liquidity providers earn fees by being the counterparty.

Where the claim stops

v1 is not v2. v2 removed the requirement that one side is ETH.

One action, walked through

  1. A trader sends ETH and receives the token, or the reverse, along the constant product.
  2. A liquidity provider deposits both sides and receives a share.
  3. A fee stays in the pool and raises the value of the share.
  4. Is one reserve ETH?

The argument, unpacked

Why it is still on the desk

Cite v1 when the design is ETH-paired constant product. Cite v2 or v3 when the deployment is actually that.

After the text

v2 generalised the pairs. v3 added concentrated liquidity. v1 is the first mechanism.

What has to be true

  • v1 is not v2. v2 removed the requirement that one side is ETH.
  • The spot price is manipulable inside a transaction.
  • Impermanent loss is not a bug in the formula. It is the formula.

What happened after the paper

v2 generalised the pairs. v3 added concentrated liquidity. v1 is the first mechanism.

What to check before you use the idea

  • Is one reserve ETH?
  • What fee remains in the pool?
  • Who is the counterparty to a trade?

Terms

Constant product
The reserves' product does not fall when a trade happens.
Liquidity share
A claim on both reserves, not a claim on a fixed price.

The problem the paper names

Order books need market makers who show up. A chain with sporadic users needed a market that was always willing to quote.

What the design proposes

  • One pair per contract, and one side is ETH.
  • The price is the ratio of reserves.
  • Liquidity providers earn fees by being the counterparty.

How the mechanism is specified

  • A trader sends ETH and receives the token, or the reverse, along the constant product.
  • A liquidity provider deposits both sides and receives a share.
  • A fee stays in the pool and raises the value of the share.

What this page does not treat as proven

  • v1 is not v2. v2 removed the requirement that one side is ETH.
  • The spot price is manipulable inside a transaction.
  • Impermanent loss is not a bug in the formula. It is the formula.

Why a venture studio still reads it

Cite v1 when the design is ETH-paired constant product. Cite v2 or v3 when the deployment is actually that.

This is Blockchain Lab's reading of a public design paper. It is not the paper, not a copy of it, and not an offer of tokens, equity, custody or a partnership. Later network behaviour can diverge from the text. Nothing here is investment, legal or technical advice.

Research status: Design paper. Last reviewed: 1 October 2026. This is a reading of a public paper, not investment, legal or security advice.