The team behind the decentralized exchange Uniswap has created a new Permit2 approval mechanism that allows smart contracts to move tokens on behalf of users.
1/ Token approvals are essential but cumbersome—that’s why we built Permit2 ?
Token approvals allow smart contracts to move tokens on behalf of users and DeFi to run smoothly. We built Permit2 make this process even better ?
— Uniswap Labs ? (@Uniswap) April 27, 2023
According to the developers, there are situations in which multiple transfers are required, and consequently gas fees, which leads to “user frustration and potential security risks”.
Permit2 allows network participants to set their own permissions and approve token transfers with a single signature, and also significantly reduces fees.
Uniswap has created the so-called «universal router» for token swaps and NFT.
«Routers are optimised for finding the lowest prices and executing trades with the smallest gas costs. […] With the new smart contract, users will be able to perform multiple swaps on Uniswap V2 and V3 and purchase NFTs on various marketplaces in a single transaction», — it is said in the platform’s blog.
The two technologies are interconnected. In this way, the user passes the Permit2 authorization directly to the router, which does not require additional computation.
In March, the Uniswap team deployed the third version of the protocol on the BNB Chain.
In April, the exchange community approved integration on Polygon zkEVM.