Snapshot - Uniswap Arbitrum LTIPP Matching
We initially voted for the following incentive package preferences: $250k, $500k, $750k, and $1M.
Our vote was based on wanting to maintain Uniswap’s strong symbiotic partnership with Arbitrum, and we felt partially matching the incentives was necessary to show our alignment and commitment to Arbitrum. However, we voted for the lower range of incentives as we remain skeptical about the effectiveness of the suggested incentives.
This is based on our interpretation of Gauntlet’s Retro-Report and Gauntlet’s Dashboard:
- $782k was spent on incentives to generate $597k in extra fees for incentivized liquidity pairs.
- Excluding the success of the Magic/ETH Pool, the average USD cost for $1 gain in fees is $3.9.
- This means that from the additional rewards, 80% comes from incentives, with only 20% coming from trading fees. This wouldn’t achieve the outcome of increasing fees to create a flywheel effect.
- As the majority of revenue comes from ARB incentives rather than fees, once the incentive programs end, new LPs tend remove their liquidity. An example from the DAI-USDC Pool:
Onchain - Uniswap Arbitrum LTIPP Matching
For the on-chain vote, we voted for the $750k option. While not agreeing with the size of the incentives, we strongly believe matching the incentives in some capacity is important for Uniswaps partnership with Arbitrum. We look forward to seeing this incentive program play out.