Unichain: Configurable DeFi Infrastructure That Drives Innovation

Reimagining the Future of Decentralized Finance

Unveiling the Surge in Total Value Locked (TVL)

The decentralized finance (DeFi) arena has experienced a remarkable transformation, witnessing a staggering jump in Total Value Locked (TVL) from less than $1 billion in 2020 to around $120 billion in 2024.

Persisting Hurdles in the DeFi Landscape

• Scalability — Limiting the capacity to handle a growing volume of transactions.
• Flexibility — Restricting the ability to adapt to diverse use cases and emerging technologies.
• Transaction Fairness — Ensuring equitable processing and ordering of transactions.

Addressing the Constraints Through Unichain

Chirag Narang, the Head of Growth at Uniswap Foundation, has spearheaded initiatives aimed at overcoming some of these challenges. His efforts culminate in Unichain, an infrastructure architecture that focuses on:

• Programmable Liquidity — Enabling dynamic allocation of reserves based on demand.
• Sequenced Transaction Ordering — Guaranteeing a deterministic processing order for transactions.
• Decentralized Validation Mechanisms — Leveraging a distributed network for robust transaction verification.

Through Unichain, Uniswap Foundation is forging a pathway toward a more resilient, adaptable, and fair DeFi ecosystem, paving the way for limitless possibilities in the decentralized future.

Programmable liquidity at scale

Uniswap v4’s Unichain Transforms Liquidity Pools

Dynamic Hooks Empower Developers

Uniswap v4’s Unichain breaks away from the static liquidity pool model that traditionally characterises DEXs. It allows developers to embed advanced features—dynamic fees, loyalty reward schemes, and automated rebalancing—directly into the pool’s framework, eliminating the need for separate smart contracts. Narang, who has spearheaded the go‑to‑market strategy for this innovation, highlights that each pool now runs its own rule set safely through Hooks.

Key Hooks Features

• Dynamic Fees that adjust in real time to market conditions.
• Loyalty‑Based Rewards that incentivise long‑term participation.
• Automated Rebalancing that maintains optimal liquidity ratios without manual intervention.
• Embedded Lending and Insurance Mechanisms enabling financial products directly inside the pool.

Impact Metrics

• Over 1,000 Hooks deployed by developers.
• More than $70 billion in trading volume facilitated by these Hooks.
• Nearly $1 billion in Total Value Locked (TVL) on Uniswap v4.
• Participation from small businesses, DAOs, and diverse financial participants demonstrating tailored logic within liquidity operations.

Unichain’s ability to safely run custom rules inside each pool opens the door for a new generation of decentralized finance products, proving that flexible liquidity structures can combine safety, scalability, and innovation in one platform.

Addressing transaction ordering with TEEs

Unichain’s New Sequencing Strategy Tackles MEV in DeFi

In the world of decentralized finance, Maximal Extractable Value (MEV) remains a thorny obstacle. MEV arises when transactions are reordered to favor specific actors, often at the expense of ordinary users. Unichain’s fresh approach combines Trusted Execution Environments (TEEs) with a strict sequencing model to curb these risks, guaranteeing that each transaction is handled in the exact order it arrives.

Why TEEs Matter

Unichain’s method relies on encrypted mempools and public attestations. These measures limit the opportunity for MEV manipulation by ensuring that transactions are not exposed to others in the mempool. Narang explains that the sequencing model uses cryptographic protections to reduce the risk of transactions getting manipulated. Instead of an operator’s discretion, users now see a consistent queue that follows gas prices rather than arbitrary operator decisions.

Early Pilot Results Show Promise

• Users working with time‑sensitive applications—market makers and on‑chain insurance tools—reported more consistent execution outcomes.
• Initial data from pilot deployments highlighted a reduction in MEV leakage and an improvement in transaction predictability.
• By preserving the original order of arrival through TEEs, Unichain offers a cleaner, MEV‑free environment for DeFi participants.

What’s Next?

Unichain’s pilot deployments suggest that the TEEs‑powered sequencing model can deliver a more predictable and MEV‑mitigated DeFi ecosystem. As adoption grows, users expect even fewer manipulative reorders and a stronger foundation for on‑chain financial tools.

Decentralized validation via UVN

Unichain’s Validation Network (UVN) Replaces Centralized Sequencing

Many Layer 2 platforms depend on a single sequence node, exposing a single point of failure. Unichain’s UVN replaces this model with a fully distributed validation system.

Core Elements of UVN

• Staked Validators – Participants lock UNI tokens to participate in validation.
• Epoch‑Based Attestations – Validators attest during fixed epochs, ensuring timely and structured validation.
• Slashing Incentives – Misbehaving validators incur token penalties, maintaining network integrity.

Protocol‑Based Accountability

“UVN moves away from centralized coordination by distributing validation among multiple participants,” Narang explains. “Validators are penalized for protocol violations to maintain system integrity.”

Rewards and Penalties

• Validators stake UNI tokens and earn rewards for consistent uptime.
• Inspections for protocol compliance guarantee that validators remain compliant.
• Misconduct triggers slashing, discouraging malicious behavior.

Fault Tolerance and Accountability

By combining staking, epoch attestations, and slashing, UVN increases fault tolerance, making validator behavior more accountable and reducing single points of failure.

Use cases and adoption examples

Unichain’s Hooks Are Reshaping Regional Finance

1. Southeast Asian Entrepreneurs Hedge Without Intermediaries

• Hooks let small businesses lock in foreign exchange rates directly on chain.
• Users create custom contracts to swap local currencies for stablecoins.
• Result: Currency risk is mitigated without banks or card issuers.

2. Latin American Renewable Energy Funds Allocate Swap Fees

• Community‑managed energy collectives stake swap fees in a decentralized fund.
• Fund payouts are distributed via smart contracts to local households.
• Outcome: Renewable projects receive continuous funding from on‑chain trades.

3. Remittance Platforms Test Undercollateralized Lending

• On‑chain activity, such as transaction volume, replaces traditional credit scores.
• Borrowers lock collateral in a smart contract and receive a loan instantly.
• Benefit: Lending tools are available to users in underserved regions.

These use cases illustrate how Hooks align financial mechanisms with community objectives and operational realities.

Technical direction and broader applications

Unichain’s next generation: Configurable cross‑chain liquidity

Narang’s current priorities

• Expanding cross‑chain liquidity coordination between Unichain, Base, and Arbitrum
• Exploring integrations with real‑world asset tokenization
• Implementing data‑informed liquidity routing

Enhancing ecosystem compatibility

• Improving compatibility with other ecosystems
• Supporting structured deployments across multiple chains

Building on existing infrastructure

• Complementing existing DeFi infrastructure with more configurable systems
• Offering transparent tools for DeFi builders

Future adoption determined by production performance

• Stabilizing performance of TEEs and UVN in production environments
• Performance and usability will dictate future adoption across chains