SundaeSwap v4 Nears Launch With Modular Pools and Automated Routing for Cardano DeFi

Sundae Labs has released the first technical details of SundaeSwap v4, with a gradual rollout expected to begin within the next month. The new version will allow orders to move across multiple pools and potentially interact with external Cardano protocols within a single transaction.

SundaeSwap v4 Introduces Modular Cardano Liquidity Pools

SundaeSwap is a Cardano decentralized exchange where users can swap native tokens, provide liquidity and access yield products. Holders of $SUNDAE participate in protocol governance.

The platform reports more than 850,000 processed orders, 400 million ADA in trading volume, over 100,000 connected wallets and more than 20 million ADA in liquidity.

SundaeSwap v4 replaces fixed pool structures with configurable modules. Pricing curves, trading rules, order authorization and access requirements can be adjusted without rebuilding the entire exchange infrastructure.

Professional liquidity providers and Cardano protocols could therefore create specialized pools while retaining access to SundaeSwap’s interface, order flow and integrated aggregators. The model allows projects to introduce customized trading or liquidity products without launching a separate DEX and independently attracting users.

Automated Routing Connects Cardano DeFi Liquidity

SundaeSwap v4 brings automated routing directly into the order. Users can select a specific route, but the default design allows a scooper to divide an order across multiple pools and execution paths. Smart contract rules require additional value generated through improved routing to be returned to the user.

The architecture can also include external Cardano protocols in the same transaction. Sundae Labs listed potential routes involving Butane’s synthetic assets, Indigo’s peg stability module and universal order books such as DeFi Kernel. These are examples of the system’s intended composability, not confirmed integrations available at launch.

Multi-asset pools extend the model by allowing several tokens to share one reserve instead of requiring a separate pool for every pair. A pool could contain ADA, $SUNDAE and assets from other Cardano projects, reducing liquidity fragmentation while exposing providers to every asset held in the reserve.

V4 also introduces a UTxO-native concentrated liquidity model. Capital can be distributed across different price ranges, while automated routing combines available positions during execution. Positions outside the active range do not collect fees, making this model more dependent on active liquidity management than conventional AMM pools.

New Swap and Order Models Expand SundaeSwap v4

Linear Swaps are designed for stablecoin exchanges at a fixed one-to-one ratio with a predefined fee. Liquidity providers can select the stablecoins they accept, while a bounty mechanism can incentivize users to restore an asset depleted by uneven demand. The model does not remove the depeg risk attached to the stablecoins held by the pool.

Partial fills will allow larger limit orders to be executed through several smaller transactions over time. Users allocate an additional fee budget that determines how aggressively scoopers can divide the order, creating more opportunities for execution near the selected price.

Sundae Labs reported that the architecture has been validated for Midgard and Leios and prepared for proposed Cardano capabilities such as nested transactions, advanced account addresses and programmable tokens.

SundaeSwap v4 and Gummiworm have also been designed so selected Cardano layer one pools could eventually provide liquidity to transactions within the Gummiworm layer two system.

Not every announced function will be available during the initial release. SundaeSwap plans to activate a smaller set of core features before introducing additional modules. The final audit result, benchmark data, deployment schedule and migration process for existing v3 liquidity have not yet been published. The migration design will determine whether SundaeSwap can move its current liquidity base into v4 without leaving trading depth divided between two protocol versions.