Skip to content
Blockchain LabVENTURE STUDIO

whitepaperMarkets2020

Uniswap v2 Core

Uniswap. Hayden Adams, Noah Zinsmeister, Dan Robinson.

The 2020 core paper for Uniswap v2: a constant-product automated market maker, with arbitrary ERC-20 pairs, price accumulators, and a flash-swap callback. It is the clearest short specification of the pool that much of later DeFi either forked or assumed.

The problem the paper names

Order books need makers who stay online. Uniswap's design lets a pool of two tokens quote a price from its own reserves, so a trader can swap against the contract without a counterparty sitting in the book.

What the design proposes

  • The invariant is the product of the two reserves, up to the fee. A trade moves the reserves along that curve.
  • Anyone may add liquidity in proportion to the reserves and receive a claim on the pool.
  • A cumulative price is stored so other contracts can read a time-weighted average without trusting the spot price.

How the mechanism is specified

  • The fee stays in the pool. Liquidity providers earn it only by being in the pool while volume happens, and they eat divergence loss when the price moves.
  • Flash swaps let a user receive tokens and pay inside the same transaction, or revert.
  • The core contracts are not the router, the interface, or the later v3 concentrated-liquidity paper.

What this page does not treat as proven

  • The invariant is not a promise of a good price. It is a function of reserves.
  • Divergence loss is not a bug in the paper. It is the cost of the curve.
  • This page does not describe governance, the UNI token, or v3. Those are separate.

Why a venture studio still reads it

Any venture that says 'AMM' should be able to write its invariant on one line and say who loses when the external price moves. Uniswap v2 is that line.

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.