If you agree with my way of thinking, I welcome you to join and delegate your votes towards the implementation of my policy.
An ideal state would be the one where you can logically derive my voting decisions from the policy statements I’ve made.
Me being a good delegate would mean that you could save effort, attention, thinking time, and maybe a few gas fees on voting while ensuring that you contribute effectively towards the well-being of the protocol you care about.
My overall view of the UNI distribution event.
I consider the UNI distribution event as a historical one. It is the first time that I know of when a company creates an enormous amount of value, gets unequivocal leadership in its niche – and then decides to give away up to 60% of its “shares” to its network participants from the outside. My analogy for this event is: imagine Amazon distributing 60% of its shares 20 years ago towards its customers and merchant partners.
This is not a typical Initial Coin Offering where people invest money into a company that prints 3-4x amount of that money in the form of candy wrappers, an event that inevitably creates a complete set of perverse incentives.
This is an initial value and responsibility distribution.
I respect this action by the Uniswap team and am willing to contribute to the protocol development.
Thesis: Fairness of wealth distribution is a crucial factor for the protocol’s ability to gain network effects.
My question to check for fairness is the following one:
“Is it possible to substantially surpass the original protocol in the fairness of its wealth distribution?”
My answer to that for UNI is no. The same answer applies to Bitcoin and Ethereum. But even though the initial distribution is fair for UNI, it can definitely be ruined through the governance processes.
Ultimately the ‘fairness’ comes down to the distribution of wealth between different groups of actors in the system. For the most part, these groups are:
Providers of network functionality
- Miners and stakers for PoW/PoS, Liquidity Providers for Uniswap
Past, present, and future investors into the protocol
Developers (in a broad sense of the word)
When incentives are distributed evenly, the groups tend to intersect more.
Miners become holders and users, holders and users become developers and governors, etc.
Focus on newcomers
Uniswap is a go-to swapping protocol on the Ethereum blockchain.
If Uniswap develops harmoniously and Ethereum gets mass adoption, the sky is the limit for all groups involved, as long as UNI captures the value that Uniswap DEX generates. It is an enormously positive-sum game then.
But there also is a scenario where one group takes advantage of the others and brings the game closer to zero-sum. This way, the protocol advancement would get staggered, and the resulting pie would become a lot smaller compared to the first scenario.
To be sure that we are on track to create a bigger pie, I propose to focus on newcomers to the network.
Uniswap has already been inclusive towards new liquidity providers from day one. Let’s keep it that way.
If we talk about future investors, caring for them can be done by bringing the store of value property to the UNI token. I think this change is the most important thing to do to bootstrap the network effects as it affects everyone.
The same logic applies to other groups.
To sum up, it needs to be a good thing - becoming a new long term network participant at any point in time in the future .
Happy newcomers naturally tend to bring in more newcomers to the network.
Below are the policy directions I find particularly relevant to the protocol advancement:
1. Tie the token’s worth to the value the Uniswap DEX generates .
The most natural way to do that would be to activate the fee switch and distribute the unlocked fees towards UNI token holders in ETH.
2. Strategic liquidity provision incentives
The key questions I find significant when deciding whether or not we should additionally incentivize a pool via UNI distribution are:
- How big is the community that we’re trying to get interested?
- Would we advise people who want to accumulate UNI tokens to buy the tokens we promote? What are the chances that people will lose money on these buys?
At the moment, the coins I see fit for liquidity mining incentives are ETH, BTC, USD, and UNI.
3. Fostering the growth of inclusive, cooperative, and complimentary developers network.
4. Encouraging participation in Uniswap governance .
Governance assets distribution
When it comes to the way we design UNI distribution incentives, I believe they should be moderate and complementary:
Moderate to appeal to long term supporters and discourage short-term speculators
Complementary to encourage a deeper level of community involvement. This way, the distribution encourages full-throttle activism. An essential change in this regard would be to allow UNI tokens from liquidity mining pools to participate in governance and enjoy the benefits of that participation.
My modus operandi as a delegate:
Transparency and Communication.
It is my intention to give a heads up about my voting decisions a couple of days before I vote so that people who disapprove of them could have time to respond and withdraw their voting power.
Initially, I plan to give at least 48 hours’ notice, and I’ll keep statistics of the “time to respond” metric.
I intend to signal every time I make a decision to vote or to abstain from voting, but if for whatever reason I’m not able to do that in due time, it would mean I’m not voting.
I’m going to set up an announcement channel, probably in Telegram, and I also might add Twitter and some immutable alternative if there is a need for it.
A typical announcement will contain the voting decision and the earliest time the vote will be cast.
If I ever reach the 1% threshold of voting power needed for submitting new proposals, I’ll create an additional communication channel for delegators, probably via Discord.
Thank you for reading.
If you’d like to delegate me your votes, here is the address:
You can also use this address to the same effect: