Mhonkasalo & teemulau Delegate Platform

Key Info

Name: mhonkasalo & teemulau

Delegate Address: 0x553F674dD7D102ad79C644103974a1cc53b62Ac2

Forum: @mhonkasalo, @teemulau

Twitter: @mhonkasalo, @teemulau

Discord: mhonkasalo#3692 & teemulau#7395

About us

  • Long-time crypto investors who have participated in and actively researched the DeFi ecosystem for years.
  • Today, we are working together on protocol research and governance efforts. We are also delegates on MakerDAO.
  • Many of you may know @mhonkasalo on Twitter. I was previously on the research team at The Block and on the investment team for ParaFi Capital. @teemulau has experience organizing one of the largest tech events globally, Slush, and working in finance & ops positions in startups.
  • We are long-term UNI holders and have been part of the community for years.

Our initiatives

Background

Uniswap is the leading decentralized exchange, with a market share that has oscillated between 65-75% over the past year on Ethereum and success on e.g. Optimism and Polygon.

The protocol is the most likely candidate to be the “order book of the world” and with it the most important DeFi infrastructure component.

On the downside, there’s quite a bit of negativity around the perceived progress that Uniswap has made recently. UNI token economics are considered poor due to the lack of value capture and the activity of Uniswap Labs — e.g. its venture arm — doesn’t necessarily drive value to token holders.

In the big picture, the UNI community should remove its reliance on Uniswap Labs. Instead, the Labs entity should eventually become just one (albeit important) team that works on the behalf of the protocol. In the shorter term, the community should start the journey to maximizing value for itself.

Note, it’s possible Uniswap Labs would be supportive of the community taking charge of (parts) of the project — including regulatory reasons.

To date, the community governance over the project’s large treasury (roughly $1.6 billion held in UNI) hasn’t provided much value.

Token holders don’t need to rely on a single team to execute on their behalf. This is the essence of decentralized protocols and will help drive Uniswap’s growth in the future.

Roadmap

Below, is outlined a rough roadmap for what a better community-led effort could look like. This is split up into 4 steps, with the 1st 2 being baby steps to token holders becoming more active in the protocol overall:

  1. Fee switch experimentation.
  2. Recognized delegate program.
  3. Start forming teams outside Uniswap Labs.
  4. Establishing a development roadmap

Fee switch experimentation

Uniswap has a fee switch that can be turned on for between 10-25% of LP fees on a given pool.

The common misconception is that startups should not distribute profits but instead reinvest them — note that in Uniswap’s case, currently, the marketplace isn’t taking a cut at all and providing the exchange service for free. Extracting a fee does not equal necessarily a profit distribution but profits could be collected into a treasury. Uniswap does not have a business model and generates 0 revenue for its owners.

There is a question on whether or not reducing LP profits would lead to Uniswap becoming less competitive in competition with other DEXs.

Overall, the next steps should be a data-driven research report (a task we’d be happy to take on):

  • What the impact on LPs will be and whether an e.g. 10% fee would be detrimental to Uniswap liquidity.
  • A recommendation on which pool would be the best place to start with.

Recognized delegate platform

MakerDAO pays its delegates an annual salary. This is a good idea and could be replicated on the cheap with UNI incentives.

Recognized delegate programs are a good idea because token holders can elect competent people who drive both vision and strategy for a DAO. They are responsible for representing the will of the token holders and are aligned because their incentives are tied to success.

In practice, starting this would mean creating a proposal similar to MakerDAO’s recognized delegate program.

With both the fee switch working and the consequential selection of paid delegates, UNI community involvement will be supercharged.

Start forming teams outside Uniswap Labs

MakerDAO has Core Units that work for MKR holders. These Core Units ask for budgets and have some scope for their work. Examples include Protocol Engineering, Real World Finance, Data Insights, and others.

UNI holders would vote on onboarding development teams and budget approvals via a standardized process. What the needs are for teams that develop the protocol comes from the roadmap.

This is a great opportunity for builders to come in and work on a DEX while receiving upside and not starting up a competitor with only minor improvements.

Establishing a development roadmap

This is really about:

  • Establishing a development roadmap (and vision) for the project that UNI holders understand.
  • Working with Uniswap Labs on not replicating work and strategic synergies.

A short list of potential low-hanging fruits for a DEX includes (from Hasufl). Not all of these may be applicable to Uniswap, but directionally:

  • Front-running protection.
  • Revert protection.
  • More order types (e.g. TWAPs)
  • Solver/market-maker competition for user fills.
  • Account abstraction.
  • Payment-for-order-flow.

In addition to this, there are interesting larger opportunities for Uniswap to go after such as perpetual swaps and synthetic stock trading — with the goal of exiting the “internal DeFi casino”.

This would start with a series of Proposal Requests, where the community could come together on desired features moving forward.

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So y’all going to keep trying to steal not ur keys please leave my stuff alone asking nicely

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We support the proposal to form the Uniswap Foundation.

Having a foundation that has the necessary resources to attract top talent and build out a growing ecosystem of Uniswap products is key to the decentralization of the protocol and its continued growth.

We know Devin and the advisors/team members here, and believe they are the right people to take this initiative forward.

This is a step that aligns with our Delegation Platform pitch and is a good next step in UNI token holders becoming more active in the ecosystem. It will take a lot of work and motivated UNI holders/delegates to make the best of these resources and we are excited to contribute.

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Thanks for writing this up for the community @mhonkasalo and @teemulau !! Excited to see you both get more involved in Uniswap governance

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We decided to vote yes to both zkSync and Aurora deployments.

In particular, we are excited about the scalability offered by zk-Rollups and these will be high-impact for both Ethereum scaling and Uniswap’s continued dominance.

We’d like to see a proposal to deploy Uniswap on Starknet as well.

Snapshots in question:

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We voted “Yes” for the temperature check to Deploy Uniswap v3 to Boba Network, simply because we see little to no downside in extending Uniswap v3 to new networks.

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Polls - 11/23/2022

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We just created an Agora delegate profile together with an updated delegate statement: Uniswap Agora

Sharing the statement also here:

Platform TL;DR (1 sentence):

  • mhonkasalo & teemulau delegate platform focused on the financial sustainability of Uniswap and growth strategies.

What do you want to see happen in Uniswap governance over the next year?

  • Uniswap DAO turning its financially unsustainable path into a sustainable one. This means a protocol-wide fee switch activation and a systematic process of distributing this protocol revenue either into a treasury or to UNI holders. Further, serious effort needs to be put in the research of additional revenue mechanisms. Uniswap cannot continue financing its future just by continuously selling UNI, which is essentially just equity dilution. We first highlighted this in 2022 when we started as delegates, and the problem is fundamentally the same as of today.

  • Teams outside Uniswap Labs that contribute to the Uniswap DAO. We need healthy competition of various development teams that directly work for the DAO, similarly as Core Units in MakerDAO. Uniswap needs to be inherently global, and not rely too heavily on any specific company in any country. The only way this is achieved is to build a healthy P&L for the DAO and start to invest its own revenue into teams directly supporting the protocol. Once Uniswap has its own technical development teams, an open roadmap needs to be put in place for everyone to align on.

  • A Recognized Delegate (RD) framework. The Agora platform is a great initiative to boost delegation efforts in Uniswap. These efforts need to be continued with the design of a more committed delegate system that enables more time investment from delegates.

Reasons for wanting to be a delegate:

  • Uniswap is one of the largest DeFi protocols and arguably the most important one. We are long-term players that want to see Uniswap capture a serious % of world trade volume in the decades to come. Real-world assets are increasingly tokenized and it is only a matter of time until these all trade in Uniswap with significant volume. We have been involved in the crypto industry since 2015 and continue to be involved because the whole financial system will someday likely run on these protocols. So it is exciting to be part of the journey and contribute to the key projects.

Skills and areas of expertise:

  • Both part and full-time commitments in the industry since 2015, a wide up-to-date industry understanding, computer science, and mathematics backgrounds. We have also participated together as delegates in MakerDAO for over a year in an active capacity and are one of the largest delegates of Maker today.

Past contributions to the Uniswap ecosystem and/or demonstrated protocol knowledge (if applicable):

  • An actively voting delegate since 2022 summer both to snapshots and execs. Have been particularly pushing the importance of Uniswap DAO generating a sustainable revenue model.

What are your views on 3 past Uniswap governance proposals?

  • Uniswap Deployments Accountability Committee: Because we are strong supporters of launching Uniswap v3 on many chains, we feel there’s a need for an accountability committee. In particular, we are looking for increased transparency around project milestones — our previous experience with MakerDAO has shown how important this is.

  • Uniswap v3 Gnosis: We are strongly for Uniswap v3 launching on every chain with activity on it to maintain Uniswap’s positioning as the de-facto liquidity venue. This is why we will support nearly every deployment if the chain has some merit and/or usage.

  • Governance Proposal - Uniswap V3 Launch on zkEVM: Similar to the Gnosis deployment, we also support the zkEVM deployment. We believe that Uniswap should be early in deploying on chains in their lifecycle, particularly in the case of high-profile/quality zk-chains. Deploying much earlier on BNB Chain would have been a good idea in our opinion.

Disclosure of Conflicts of Interest:

  • No conflicts of interest other than some personal investments in competing DEXes for both of us.
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