Enhancing Uniswap Presence on Ethereum Layer-2s

DapDap proposes to leverage its composable front-end to build an alternative, intuitive Uniswap frontend and to collaborate with related DeFi projects to improve Uniswap’s market share. Our objective is to support emerging Ethereum Layer-2 networks and reinforce deployments where Uniswap is not the dominant player — specifically on Linea and Scroll — by deploying a user-friendly front-end and building strategic business relationships to drive liquidity and adoption.

Context and Opportunity

DapDap serves as the ultimate gateway to Ethereum Layer-2 solutions, simplifying Web3 navigation for over 130,000 users since its launch in February, 2024. With a guiding mission to democratize DeFi access, the platform offers a one-stop portal to 200+ dApps across 17+ Ethereum Layer-2 networks.

With a proven success in onboarding a significant amount of volume and transactions, DapDap continues to collaborate with industry-leading Ethereum solutions on a regular basis, such as: Base, Blast, Linea, Manta, Scroll, and more. Recent campaigns saw DapDap onboard 16,000+ users to Linea, 22,000+ users to Scroll, and 14,000+ users to Blast, with total DeFi volume coming through DapDap surpassing $100M in transactions only 3 months after launch.

In the past, we’ve worked closely together with our partners at Linea (Consensys) to develop our first iteration of a fully open-source & decentralized Uniswap v3 front-end, as an initiative to support Uniswap adoption on Linea (link).

We’ve also recently received a grant from Base to build a custom Uniswap front-end for the Sepolia Testnet to facilitate product testing for builders worldwide. Link

Problem Statement

In the process of developing the alternative Uniswap frontend on Linea, we realised that

Uniswap’s v3 contracts are live on 17 networks, as part of the Uniswap DAO’s initiative to expand its services to various EVM-compatible networks. However, besides oku, there is a lack of local Layer-2 market focus and initiatives that lead to user conversion and market penetration. Out of the 17 major EVM & Ethereum networks, the Uniswap contract accounts for less than 1% of the total total value locked (TVL) in 6 of them.

Possible factors hindering Uniswap’s local market penetration include:

  • Limited Reach - lack of an official Uniswap front-end support on many emerging Ethereum Layer-2 networks.
  • Competitive Positioning - native DEXs have an inherent advantage in building local engagement by incentivising liquidity for native tokens.
  • Absence of the canonical Uniswap-themed Interface - absence of a simple and familiar Uniswap front-end across some Layer-2s, creates for significant barriers to onboarding retail users

DapDap Proposal

  1. Unique Value Proposition

Existing User Base:

  • DapDap is a platform with +130,000 retail users, averaging +10,000 daily visits and 2,000+ daily users completing on-chain transactions
  • Direct accessibility to 200+ applications across 17 chains, giving us the ability to easily direct users to DapDap’s Uniswap frontend with a superior UX

Front-end Composability:

  • DapDap’s main value lies in its frontend composability, giving access to Uniswap, LP vaults (e.g, Gamma), lending (e.g., Layerbank), and bridging (e.g., Across) within a single UI

  • Simple user journey centred around Uniswap as a DEX

  • Competitive UX compared to other local DEXs

Business Development:

  • Existing relationships with 200+ integrated DeFi applications across 17 chains
  • Natural fit to build business relationships for Uniswap with local complementary DeFi services like lending, bridges, vaults, etc.
  • Ability to integrate external DeFi features into our Uniswap-focused interface, run marketing campaigns, and direct user attention towards Uniswap instead of local DEXs
  1. Development and Deployment

Allocation of 5k $UNI for DapDap team efforts per network:

  • 3k $UNI for initial development:

    • UI/UX design (1 week)
    • Front-end Development (4 weeks):
    • Swap, Account component, Liquidity management
    • Slippage settings, Local token whitelisting function, Smart-routing
    • Additional functionality (2 weeks):
  • Block explorer support, i18n, Transaction data page, Embedded bridge aggregator functionality

  • 1k $UNI for maintenance (server and dev costs) for one year

  • 1k $UNI for continued integration of new DeFi services

Total cost per Network: 5k $UNI

Selected Initial Networks to Deploy: Linea, Scroll

Total Cost for 2 Networks: 10k $UNI

  1. User and Business Engagement Strategies

Allocation of 5k $UNI for Business Development & Marketing per network integration

Leverage DapDap’s Existing DeFi Partner Network:

  • Utilize DapDap’s established relationships with over 200 integrated DeFi applications across 17 chains to promote Uniswap; build partnerships with key local DeFi projects, such as lending platforms, bridges, and vaults etc.
  • Integrate these local DeFi services into DapDap’s Uniswap-focused interface, creating a seamless user experience and directing attention towards Uniswap.

Focused Marketing and Community Engagement:

Total cost per Network: 5k $UNI

Selected Initial Networks to Support: Linea, Scroll

Total Cost for 2 Networks: 10k $UNI

Expected Outcomes

  • Improved accessibility to Uniswap’s liquidity pools on emerging Ethereum Layer-2 networks through the DapDap-built Uniswap interface
  • Enhanced user engagement and participation in Uniswap’s ecosystem via DapDap’s streamlined interface and gamified features
  • Increased liquidity provision and trading volume on Uniswap, resulting in expanded market penetration and strengthened market presence
  • Enhanced penetration into Layer-2s via frontend composability, enabling users to swap on Uniswap and interact with other dApps on DapDap

Reporting and Measurement

If the proposal is approved, DapDap will complete all integrations and relevant business development within 45 days and launch accordingly. After launch, DapDap will provide quarterly reports to the Uniswap DAO on user activity (#users, #transactions, #volume) on the integrated DapDap interface. If improvements are needed, we will communicate accordingly.

Closing Note

I’m sharing this as a discussion point. If you endorse this concept or a variation of it, please respond here or contact me directly. Depending on the level of support, I’ll look into developing this initiative further. This proposal represents the start of our enduring commitment to collaborating with and benefiting the Uniswap ecosystem as an alternative interface and valuable contributor. This strategic integration intends to facilitate wider adoption and boost participation in the Ethereum Layer-2 DeFi space.

Mock up

Swap:

Pool:

Third Party Vaults:

Bridge

13 Likes

Thanks @0xSocratic for putting up this proposal. I know the Accountability Committee and DapDap have gone over the proposal in the past few weeks–but I’ll reiterate some of the comments for public discourse.

Most of the recent Uniswap deployments have been integrated into Oku’s front-end. There are examples of a couple that are not integrated, yes–like Gnosis Chain. They came to the DAO just about 6 days ago requesting an incentive package. The proposal also stated:

The proposal by default selected Oku as the front-end, which, if this proposal passes, will be subsidized by the DAO. Here, I can see a potential entry point for DapDap. The DAO could potentially decide which FE they want to select. Maybe Oku fits the more sophisticated market and DapDap a more familiar, user-friendly market.

Another option is having discussions with the proposing team (ie the target chain). In the event that the DAO does not want to subsidize the FE, which it often hasn’t, then the target chain will be presented options for which FE they want to pay for. This can be Oku, DapDap, or some other team like Protofire.

Correct, but this is not exactly a mere front-end issue–it’s a branding issue. The Uniswap Labs FE has a lot of value. Whenever a chain is integrated there, usage shoots up. But when speaking about secondary FE’s, we’re mostly at parity. The biggest mitigator to this issue is incentive packages, something the DAO has been running for the better part of this year.

The question for delegates here is–does an aggregated, composable UI like that of DapDap make sense? Or does a more dedicated trading site like Oku make more sense? The downside to having too many FEs is that 1) it costs the DAO more money 2) it may actually confuse consumers more. Like people know what Oku is now, so they associate it with Uniswap. But every new FE that’s added is less useful largely because the Uniswap brand cannot be licensed from Labs. DapDap abstracts much of this away. So going with DapDap is actually a bet on the DapDap brand.

I would argue that Oku’s interface is tailored to both more tenured traders as well as those looking for a simple, familiar swap. Simplicity isn’t the competitive advantage. The real advantage from DapDap is its own name. If composable environments win, DapDap wins.

I’m quite curious what other people’s perspective is on a more composable FE that combines numerous dapps. I usually have a place for swapping, another for lending, etc. But I can see the utility of a combined interface.

Wouldn’t it be wiser to have an integration for new deployment that’s not yet live? The DAO expending capital on integrations already present on Oku may not be the wisest use of funds, especially with that chain already has less activity across all its dapps.

The Gnosis proposal above comes to mind as a starting point for DapDap. And a deployment that makes more sense is Base, but it seems you’ve just received a grant for that. Would be curious to see how much traffic is driven to that site over time.

Also, the https://www.dapdap.net/network/blast shows all these networks:


I’m able to click on each of them and select “swap”. Once I’m routed to the swap page, who are you guys using on the backend? It seems like some deployments are already done?

From the linked AMAs and odyssey campaigns, it looks like the current advertising is on a network basis–not specific marketing for particular dapps?

Here on the Scroll campaign, for example, I also see Uni v3 already present as a swapping option. So, I’m again confused about why we need to pay for this integration if it’s already there. Plus, there are a handful of competing DEXs present on the page, which may dilute our reach. How exclusive and Uniswap-focused would this marketing be, and does DapDap have funding/agreements from other DEXs already?

One final question for @eek637–is the Uniswap branding on the mockups fine? @0xSocratic curious what the domain names you’re choosing are as well for the swap sites.

6 Likes

Thanks @0xSocratic for putting up this proposal! To echo some sentiments that @AbdullahUmar has shared, as well as some of my thoughts on the subject:

Moving towards FE Diversity

I agree with this sentiment that there should be some competition for Uniswap frontends, and it seems that DapDap may be suitable here. Although the DAO has previously selected Oku as a frontend provider for several different proposals, I don’t think that this should necessarily preclude other frontend providers such as DapDap - particularly for different market segments.

Accountability for Stated Goals

On the other hand, one of my concerns with frontends is that having a proliferation of frontends can over-clutter the user experience.

I think I would want more clarity on the specifics of these goals. Specifically, how can we enforce accountability for these stated goals. For example:

  • What is the expected user engagement through this new UI? Are there numerical modelings of this based on the past data that you expect?
  • How much liquidity provision can we expect? Does this scale linearly to how much DAO funding we give DapDap were we to follow through with this proposal?
  • How big is the target market segment? What levels of spending/value accrual can we expect? How do we know that the networks selected, eg. Linea/Scroll - will accrue sufficient user activity over time to justify this effort?
  • How can this proposal work in tandem with other DAO proposals already passed that incentivize liquidity?

Having this information would allow us to better gauge what levels of DAO spending would be justified.

Retroactive DAO Endorsement of FEs

I see that one of the asks of this proposal is to essentially become a “DAO-endorsed” frontend. I don’t believe that we as a DAO should officially sanction frontends without any proven traction. One way to address this is to have part of the funds + official endorsements should only be given once DapDap itself proves that the product itself can gain market traction, and let market forces decide which are the frontends that end-users actually want. A retroactive (or partially retraoctive) funding model would make sense here.

6 Likes

Hey @AbdullahUmar @jayyu23
Thank you for your response here. I highly appreciate the opportunity to further elaborate on our proposal and address the points raised.

Notably, our primary intention is to assist Uniswap by leveraging DapDap’s products, services, business network, and user base within the Ethereum L2 markets. We have noticed Uniswap’s lack of meaningful market presence in some Ethereum L2s in our work process, hence we started working on some Uniswap-related initiatives, reached out to some Uniswap delegates, and made this proposal. We hope to work together to achieve greater retail presence in emerging L2 networks.

Concern re-OKU:
We are aware of the successful initiatives undertaken by OKU, including their incentive programs. We view these efforts as an excellent foundation and believe that DapDap can collaborate positively with OKU and the current incentive proposal. By working together, we can direct more retail traffic towards Uniswap, thereby add good value to the incentive currently used. We have no intention to compete and think the market is too early for competition. However, through a more collaborative effort, we can help Uniswap grow faster together.

main retail traffic source:

  • Collaboration with other local DeFi markets
  • Dapdap’s existing and growing user base, that are largely L2 focused

Advantages of a Composable Front-End:
I agree with you, simplicity is not enough.
DapDap offers a customized, intuitive front-end that maintains key design elements of the canonical Uniswap front-end for familiarity. It also integrates other complementary local DeFi services, all centered around Uniswap.

One key advantage of DapDap’s composable front-end is its ability to redirect users from other local DeFi services to Uniswap contracts. This not only increases Uniswap’s visibility but also broadens its user base.

Network Selection:

We chose Linea and Scroll due to our strong relationships and ecosystem project connections in our past collboration. Our familiarity with these networks allows us to test our hypothesis that a composable DeFi service centered around Uniswap can drive greater attention and usage of Uniswap contracts. We are also open to considering other networks, such as Gnosis, and Base if more suitable.

Note on our Base Grant:
We received a small grant from Base, requested by Jessy, to develop a front-end for testing Uniswap V3 contracts on the Sepolia testnet. This is intended for development purposes, not for retail use.

Integration Fee and a more official business relationship with the Uniswap community:
The proposed integration fee covers the customized design and development of a product focused on Uniswap within a network. We tried to detail these in our scope of work and mockups.
Our current work on the Uniswap front-end for Linea and Scroll mainnets and Base testnet are more of a public service with basic functions and limited customization.

Accountability for Stated Goals
@jayyu23, those are great points! We are happy to collaborate with the DAO and OKU to develop an efficient accountability structure. Based on our experience, we are confident that with our proposed amount, we can onboard a few thousand users or achieve at least a 20% improvement in Uniswap’s volume and user numbers on Linea and Scroll. Ultimately, our goal should be to make Uniswap’s volume 10% of each network’s total chain volume as the first milestone.

Final
Our proposal aims to establish a formal business relationship with the Uniswap DAO. The costs outlined are intended solely to cover our expenses, with no intention of making a profit (e.g., development, design, business development, dApp integrations, marketing, etc.). We accept a partial retroactive model and suggest the following ideas:

  • Cover the business development and marketing costs to start with.
  • Accept all development costs in UNI token and commit not to sell for one year.
  • Even start with one network as a small experiment.
    Most importantly, a real product-market fit is what we try to achieve here.

Some Stats on Dapdap in the last 24 hours:



Screenshot 2024-07-05 at 03.07.21

10 Likes

Thank you @0xSocratic for bringing this proposal forward. Our team supports more front-end diversity as it will enhance accessibility, distribution, and decentralization, ultimately growing Uniswap’s user base. We are eager to continue working with DapDap on this proposal. As the DAO continues to do diligence on this proposal, we have some questions around DapDap’s current metrics.

Since DapDap recently launched in February, we would like to see additional user metrics from the last 3 months such as average trade size, swap volume per user, and transactions per user. Can you please provide this data to the DAO?

6 Likes

Thank you for your support, @404DAO! I apologize for the delayed response; I have been on the ground at ETHcc meeting with people last week.

Please find the link to the Google Sheet that shows the swap data on DapDap since April 1st, 2024.

Let me know if you need any further assistance!

3 Likes

Thank you @0xSocratic for your detailed proposal and additional explanations. We appreciate your efforts to contribute to Uniswap’s growth in the L2 ecosystem.

We fundamentally agree with @AbdullahUmar 's opinion.

Positive aspects of this proposal:

  1. We agree with 0xSocratic’s suggestion to start with business development and marketing.
  2. The above proposal to begin on a small scale is a sensible approach.
  3. Your existing relationships with Scroll and Linea should potentially be leveraged effectively.

Concerns and areas for further consideration:

  1. There appears to be significant overlap between this proposal and existing Revitalization and Growth initiatives. It would be helpful to clearly differentiate how this proposal offers unique value beyond Revitalization and Growth.
  2. While the stats provided are interesting, we’d like to see more specific projections on how your approach would improve Uniswap’s performance on these L2 networks.
  3. Could you provide an estimate of the costs involved when starting on a small scale? We would like to see a prediction of the expenses that would be incurred in this scenario.

We highly appreciate your willingness to consider alternative compensation models, such as accepting UNI tokens with a commitment not to sell for a year. This demonstrates a long-term commitment to the project.

3 Likes