Just went through the entire conversation, so far my biggest takeaway is Mr_Po’s comment about the sample to whom the question is asked being highly biased:
#1 I think is poll is highly non-representative of what UNI token holders think, as it’s sample is heavily skewed towards people who want to actively participate in governance. A very small % of UNI holders finds themselfes in ‘Governance-meta’ subforum.
However despite this strong bias, the vote still seems to vastly favor rewards for UNI holders, even without participation in governance.
One thing I’m still wondering is whether or not buybacks fall under the definition of “reward” as understood here.
From an economic standpoint, yes. Uniswap holders should be rewarded - in the long term. And if you believe in DeFi like I do, you need to be thinking long term.
In the short term, I think Uniswap should invest in growing the platform and solidifying it’s dominance as a DEX. In the short term, this may mean the treasury will be better spent incentivizing users and liquidity providers, or hiring developers to accelerate protocol improvements. Doing this improves the odds of Uniswap being the dominant DEX platform when the market reaches maturity (which could be many years from now).
Once the DeFi market matures, I imagine daily DEX volume could be on the order of hundreds of billions dollars. At that point the protocol fee can be turned on, which would generate billions of dollars daily for the community. Some portion of those fees could then be used to return money to UNI holders.
A little back of the envelope math:
$100b daily volume
0.05% protocol fee
$50 million daily fees to the UNI community
90% distribution ratio
$45 million distributed to UNI holders daily
$16.424 billion distributed to UNI holders yearly
That’s nearly 3x the current market cap of the token on an annual basis.
But the only way returns like that are possible is if we think long term and not get greedy in the short term. It’ll be a journey, let’s go onward together!
If you dont reward people for holding uni, it makes no sense to hold uni unless you are a whale that can swing the allocation of the treasury with great effect. Not rewarding uni holders = exodus to sushiswap and possibly even BSC.
Many UNI holders already profit by borrowing against it on Maker, Compound and Aave. Nothing wrong with extra income from fees, of course, unless it triggers LP exodus.