The top 5 tokens on Uniswap are already incentivized via liquidity mining, and there is already an existing proposal for $UNI (Add $UNI/$ETH pool to list of pools eligible for rewards). The next clear candidate for $UNI rewards is YFI:
I support this proposal. YFI is among the most heavily traded pairs on Uniswap. Its holders have shown themselves to be active LPs and governance participants.
I am voting “No” for this proposal to incentivise $YFI/$ETH liquidity.
Why is this my stance?
There is no real outlined motivation nor goal that is stated for this proposal, I’d like to see more explanation around why this would be good for Uniswap. I believe every proposal for Uniswap should have clearly defined outcomes that are positive sum and beneficial for Uniswap both as a community and as a protocol.
The current pairs right now such as ETH/DAI, ETH/USDC, ETHWBTC etc. are staple liquidity pools for DeFi as a whole itself. Better liquidity here both creates a more stable ecosystem as well as establishes greater defensibililty against other competing AMMs DEXs out there in terms of liquidity. I argue that $YFI as great of a project as it is would not fit this bucket (not used as collateral, like other assets mentioned here, but instead is a governance token).
Favouring non-staple DeFi assets without a objective reason, potentially threatens the neutrality of Uniswap as a fairly governed public good. This is not to say that this proposal would immediately damage the credibility of Uniswap itself but I do believe it is a slippery slope to a myriad of problems. While I do believe that political political neutrality doesn’t really exist, non-objective decision making is a weakness and would eventually be exploited by bad actors. Rationality is our best strength as a crowd.
As much as I want this proposal to pass to pump my $YFI bags, I think that for those reasons above, I am pass on this one.
I agree 100% with @pet3rpan’s comment above. Just to expand a little bit on it, I think Uniswap should be targeting rewards primarily at “bridge asset pairs”.
eg. Compare USDC token liquidity:
to YFI liquidity:
The only pair with real volume for YFI is the YFI/ETH pair. USDC has several additional pairs with substantial volume and liquidity, and in some cases trades will be routed through USDC even if it’s not the asset being sold or bought directly - acting as a bridge like ETH.