Deploy Uniswap V3 on Harmony through an Additional Use Grant to Hermes DeFi

Requests for Comment
15

Update Summary

After careful consideration and review, we would like to provide an update to some of the questions we received in our community AMA event with Uniswap. In this update we will:

  1. Demonstrate our willingness and enthusiasm to work with Uniswap.
  2. Clarify and enhance the proposed rewards allocated to the Uniswap DAO.
  3. Address concerns relating to the ETH-ONE bridge and associated governance.
  4. Identify mechanisms used to send incentives to Uniswap.

So long as no major modifications are needed, we intend to submit our proposal for the official temperature check on Wednesday February 9th. In this governance vote, we will require 5M UNI votes with a majority ‘YES’ to continue.

Currently Active Uniswap Incentives

When we presented the Uniswap V3 deployment proposal, we wanted to celebrate by adding a 1UNI pool to our project to allocate PLTS rewards and allow PLTS investors to earn 1UNI through our bank system. The pool does not have any kind of fee, other than any costs of moving UNI to Harmony (1UNI) through the Harmony Bridge. To fund the initial bank rewards of 1UNI, we purchased a few thousand dollars worth of 1UNI on the open market. These two gestures were made selflessly before we know if we will be able to deploy V3 on Harmony to better connect us directly with UNI holders. This has proven effective in attracting Uniswap investors to Harmony as shown in these two screenshots below. Over the past 3.5 days, over 5,000 UNI tokens ($50,000+) have been bridged to Harmony and staked in our platform.

Before announcements.

1320×136 12.7 KB

After announcements.

1333×132 12.4 KB

Licensing incentives from Hermes DeFi

In our initial proposal to the Uniswap DAO, we offered a 10% allocation of HERMES tokens vested over a year. In our current tokenomic modeling and price projection of the HERMES token, this represents $180,000 at present day evaluation and over $4,000,000 in a conservative six-month projection. Uniswap would be able to choose if they wish to receive this allocation in HERMES tokens or if they would like to swap their HERMES allocation to IRIS. Multiple lines of discussion led us to believe that the Uniswap DAO was also interested in the governance of The Hermes Protocol. To help increase exposure to this, we are proposing the following incentives in addition to this direct allocation of HERMES tokens:

  1. A direct allocation of platform trading fees directed towards IRIS buybacks for the Uniswap DAO. Under this model, platform fees (0.2% swap fee, 0.17% allocated to LP providers and 0.03% allocated as ‘platform fees’), would be allocated to Uniswap. For the first year of trading, 65% of platform fees would be directed towards IRIS dividends (various mechanisms), 25% would be directed towards Uniswap (IRIS buyback and return to Uniswap treasury), and 10% would be directed towards operation costs. The Uniswap allocation would decrease from 25% to 0% in 5% increments over the next 5 years.
  2. The Hermes Protocol would host an IRIS/1UNI farm on Harmony in perpetuity, directly rewarding Uniswap investors that stake at Hermes. Additionally, the Uniswap DAO would receive 50% of all platform fees derived from this trading pair.
  3. At the moment of agreement, 2% of IRIS supply would be distributed to the Uniswap treasury from the Hermes treasury.
  4. When the lending market for The Hermes Protocol launches, UNI will be one of the first tokens eligible for lending and borrowing. This will allow Uniswap investors to earn HERMES as a reward token in addition to increasing their capital efficiency.
  5. When the bonding market for The Hermes Protocol launches, UNI will be able to be bonded to earn HERMES. The bonded UNI will be added to the Hermes protocol-owned liquidity and will be utilized to generate stable returns.

We hope that these significant financial incentives present a low-risk investment (simple licensing agreement) to the Uniswap DAO.

Cross-chain considerations for Uniswap

During our AMA conversations and associated discussions, multiple individuals raised questions about the stability and nature of the Horizon bridge operated by Harmony that allows ETH-ONE bridging. First of all, we would like to highlight that while the Harmony-Ethereum bridge is not fully trustless in its current state, it maintains ~$500M in locked tokens and is an area of active development. Harmony is in the final stages of deploying a fully-trustless Bitcoin bridge, which will be shortly followed by a fully trustless ETH bridge. As IRIS is also available on Polygon, any Uniswap-held tokens could be located on any of these three blockchains. Thus, we would love to hear from the Uniswap DAO how they would like to proceed in holding tokens and have presented a few options.

  1. Hold IRIS & HERMES in a multisig wallet operated by Uniswap DAO members on the Harmony blockchain.
  2. Hold IRIS on a multisig wallet operated by Uniswap DAO members on the Polygon blockchain.
  3. Hermes DeFi could deploy IRIS as an ERC20 token, provide initial liquidity (~$20,000), and support IRIS/ETH liquidity as a farm (+$10,000 in bonus rewards) on Uniswap directly on the Ethereum blockchain.

In all scenarios, we would ensure that IRIS would be allowed to have voting privileges in our Snapshot.org governance strategies. Whatever option Uniswap determines would be most convenient to them, we will adapt to.

Conclusions

We look forward to hearing additional feedback from Uniswap, Harmony, and our communities about this proposal. We hope that we have offered significant financial and community-building incentives to Uniswap in this proposal. We have received so much positive feedback from our community and are really enthusiastic about working together to build something amazing.

3 Likes