@Doo_StableLab thank you for your question
If the voting passes, we will be allocating 10% of our initial supply to the Uniswap DAO. These tokens will be locked in a veNFT and sent to the Uniswap treasury address upon launch, which we expect to be by the end of September. This will give Uniswap DAO full control of the veNFT to vote and manage how they like.
Thank you for the clarification.
Hey everyone, BP from Gamma Strategies. Having been partners of both Retro and Uniswap Foundation in different settings, I think this partnership makes sense. Uniswap gets 10% of the ve tokens which could be quite substantial in terms of revenue. And Retro has the ability to use the goodwill of the “friendly-fork” status of Uniswap.
Also, having been a launch partner of the Retro team, I can say that they were able to execute thru the various obstacles of initial launch pretty well, and so their next launch on ZERO should be even smoother given the added experience.
For these reasons, we would be in support of their proposal.
The initial allocation of 10% in tokens empowers Uniswap with voting rights over emissions and entitles them to a portion of fees and rewards from the selected pairs. This ensures a sustained, mutually beneficial relationship that grows as Zero Protocol scales.
While our prior experience with Retro on Polygon POS provides us with a solid foundation, we warmly welcome any input, advice, or suggestions from the community, including technical insights. Your contributions are invaluable to us.
Thank you for the kind words. We really appreciate the Gamma partnership and look forward to growing with you on zkEVM.
Thanks for this proposal. I’ve never considered the implications of a “friendly fork” and haven’t quite wrapped my head around it yet so reserving judgement on this. I wanted to ask a couple of questions in the meantime:
I have questions on:
Uniswap receives a percentage of the initial token allocation of Zero Protocol. This enables Uniswap to participate in governance decisions and generate revenue through voting, ensuring active engagement and sustained collaboration
Correct me if I’m wrong, the way understand this is:
Do you have a vision how that would look like, operationally? Do we have a to nominate a person or a committee from the DAO who then takes care of these voting decisions? How much of a commitment from the Uniswap DAO side that would be, in approximate number of hours per month?
The Uniswap DAO has previously made decisions where to allocate liquidity rewards, however I’d like to reduce the number of such decisions, and base them on objective metrics as much as possible, with the aim that the Uniswap protocol remains credibly neutral.
If we support this, we’ll also need to create a process what exactly to do with the revenue.
Question 1: The multisig will oversee important changes to Zero Protocol’s codebase through a multisignature process involving core team members, external members, and a timelock. This setup ensures that key decisions about the protocol remain are not solely controlled by one entity, but rather key and public members of the DeFi community. We would be happy to add a UF member on the multisig.
I’ll cover your questions 2 & 4 here: In the ve(3,3) model the trading fees generated from a pair are given to the veToken holders that vote for that pair. It incentivizes veToken holders to vote for the top fee generating pairs
What is ve(3,3)?
ve(3,3) is a tokenomics model for decentralized exchanges (DEXs) that was first proposed by Andre Cronje, with the project Solidly. The name “ve” stands for “vote escrow,” which refers to the mechanism by which users can lock their tokens in order to earn voting power (similar to Curve). The “3,3” refers to the rebase lockers would recieve, Zero there will be a rebase called “anti-dilution” rebase for the first few months, but might see the rebase get smaller over time eventually getting rid of it all together. I like to think of the 3,3 as the fact that users who lock their tokens receive these three benefits:
How does ve(3,3) work?
In a ve(3,3) DEX, there are typically two types of tokens: the governance token and the voting escrow token. The governance token represents voting rights in the DEX’s ecosystem, while the voting escrow token is obtained by locking or “escrowing” the governance token for a period of time.
The amount of voting power that a user has is determined by the amount of voting escrow tokens they hold. For example, if a user holds 100 voting escrow tokens, they will have 100 times more voting power than a user who holds 1 voting escrow token.
Users can earn voting escrow tokens by locking their governance tokens. The longer a user locks their tokens, the more voting escrow tokens they will earn.
The trading fees generated by a trading pair are distributed to the veToken holders who voted for that trading pair to get emissions. Voters receive trading fees in proportion to their voting power.
Projects that want to list their tokens on the DEX can bribe users to vote in favor of their pair to get emissions. The amount of the bribes a voter earns is determined by the amount of voting power that the user has.
What makes ve(3,3) style DEXs unique?
The ve(3,3) model has several features that make it unique:
Examples of ve(3,3) style DEXs
Solidly
Velodrome
Thena
Aerodrome
Here is a more indepth article about the model https://medium.com/@stabl.labs/a-simple-framework-for-simulations-of-the-ve-3-3-model-for-decentralized-exchanges-cd2fea1cb69a
Question 3: The decision for the seperate branding is because the two protocols will live independant of one another with thier own token systems. Each DeFi eco-system is unique and we wanted a cohesive branding distinction of the eco-system in which it will be deployed (Polygon zkEVM).
Question 5): Similar to Retro, Zero will be fully integrated with Merkl and they will handle the emission disstrobutions for Zero.
Question 6: The value to Zero is undoubtedly the status of being an official fork, as well as Zero Protocol will also receive access to existing and future tooling for Uniswap V3 (e.g., OkuTrade, Uniswap.fish, Seedle.finance etc.)
The offchain voting is almost over but the more I think about it, I realize this is a very one sided deal. Uniswap is a protocol with TVL over 3 billion USD with great reputation and users. Retro on the other hand is much smaller and their market, although they say has increased, is 7 million.
And by Uniswap agreeing to such endoresement as friendly fork, there’s a large risk of Zero Protocol using it as promotion for Uniswap is endorsing their protocol.
Now of course, there’s a chance that they might become widely successful but the risk is high and the upside for Uniswap is limited. So this deal benefits Zero Protocol much more than they benefit the Uniswap Community
At 7 Million marketcap, they are 1045th largest coin. I do want the community to seriously consider is it worth to potentially sacrifice Uniswap’s reputation to get maybe 10% of a coin that’s outside 1000th place in terms of marketcap.
Appreciate the enthusiasm surrounding the proposal to deploy a friendly fork of Uniswap V3 on Polygon zkEVM. I encourage delegates and stakeholders to consider this initiative from a broader perspective. This is not merely about market caps or transactional benefits; it’s an opportunity for strategic experimentation with minimal downside.
One of the inherent issues with Uniswap being forked is that the token holders, the DAO, and the community do not accrue any direct value. While there may be indirect benefits, a friendly fork addresses this by allowing us to make strategic bets, explore new avenues for ecosystem growth, and observe how new technology will perform without direct risk. This is a chance for Uniswap to capture value and foster innovation proactively.
Personally, I view this not as a guaranteed win but as an opportunity for the DAO to explore a new concept, gather data, and leverage findings for future decisions. Our community has a rich history of exploration and data gathering. The relatively small size of the proposed protocol can be viewed to minimize associated risks, making it a suitable candidate for this.
This comment should be seen as advocating for the exploration of this concept presented to the community.
Before proceeding, I strongly advocate for more community discussions. This is an interesting opportunity that can grow to have long-term benefits for the DAO outside of this single proposal.
@Doo_StableLab Thank you for sharing your thoughts and concerns about the proposed partnership between Uniswap DAO and Zero Protocol. Your perspective on the potential risks and benefits is important, and I’d like to address your points.
Firstly, it’s noteworthy that Retro Protocol has rapidly become the third-largest fork of Uniswap V3, showcasing its potential impact and relevance within the blockchain space.
Furthermore, the support from Polygon, including grants and other forms of assistance, underscores the legitimacy and sustainability of the project.
Regarding security, the substantial investment in audits by Open Zeppelin and the commitment to a rigorous security posture reflect Zero Protocol’s dedication to protecting user assets and maintaining trust within the community.
The fact that the team is doxxed adds a layer of transparency and accountability to the project.
Lastly, our ability to fork without the endorsement as a friendly fork doesn’t significantly impact the functionality of Zero Protocol. However, it does create an opportunity for increased ecosystem support, and it sets a precedent for Uniswap DAO to potentially receive benefits from forks in the future.
These insights provide a more comprehensive view of Zero Protocol’s position and intentions. The proposal remains subject to community approval through the onchain vote, allowing the Uniswap DAO to make an informed decision that aligns with the community’s interests and objectives. Your continued participation in this process is appreciated.
Thanks for all the comments as well as various DMs. While I agree with some of counter-points, I stand by that Uniswap community should seriously consider the serious impact of its endorsements. And should recognize that the Uniswap governance has been too lenient on protocols that are not only doxxed but actually reputable in general but have not followed their commitment for liquidity, grants, and support for the Uniswap community.
It passed offchain voting and we will of course respect the outcome of the onchain voting as well. However, it’s crucial that the community gets to review proposals as much as possible as we have seen that accountability and transparency require active and open discussions.
I think this is a more diplomatic perspective as some have shared that the benefit to Uniswap is much greater. But as Zero Protocol (Stabl Labs) team members themselves have shared in public in their discords, getting this endorsement from Uniswap is as they say few times, “huge” for Zero Protocol. Therefore, the benefit to Zero Protocol is clear.
To clarify, when you mentioned they (Uniswap) wouldn’t vote, what does this mean? Can you help to clarify? What would be the topics that the Uniswap community would be able to vote? Also will Uniswap community get the revenue from the fee for receiving such tokens?
One of often DMed points to me was as Tony above mentioned, Uniswap is not deploying on Polygon zkEVM and therefore, the optimal option is to support Zero Protocol. I actually see it as a valid point if true. We at StableLab follows onchain governance as a deciding authority, and “Governance Proposal - Uniswap V3 Launch on zkEVM” indeed passed onchain voting.
However, if true, such crucial information should be a public information for the community to assess.
Once again, our interest is not to sabotage proposals, but rather allow more discussions for transparency and accountability.
In line with the official v3 deployment process, it would be good to develop a similar one for v3 friendly forks since the protocol will see more friendly fork opportunities in the future. A v3friendlyforks.uniswap.eth domain will contain a record of all the friendly forks. Each record in the subdomain will stored by the friendly fork’s name and the details of the fork, such as the chain ID, factory address, and an IPFS link to the terms of the friendly fork.
Once the Zero protocol team has deployed their fork, they can post the deployment info here and then craft the initial proposal, creating the subdomain and adding Zero as the first friendly fork.
I did not vote in the snapshot but plan to vote against the proposal, as it stands now, if there’s on-chain vote.
Reasons:
My delegate statement says that “Uniswap should be kept credibly neutral; I’d only support funding initiatives that clearly benefit the protocol itself”. Supporting specific emerging protocols violates this principle and may cost the DAO in the long term.
The operational questions related to the voting using veTokens is not clear (my previous post). Moreover, even if they were clear, voting for specific pools is once again picking sides and risks. If the proposal passes, I’d still like to see the Uniswap DAO abstain from voting, in order to avoid getting involved in protocol politics.
The stakes are low. For one, there’s no urgent need to have an officially approved Uni v3 instance on zkEVM, as it’s a fledgling chain. For another, as the v3 BSL has expired, protocols don’t need ab explicit permission to friendly fork Uniswap v3.
It’s worth looking at history of proposed similar forks, like Hermes on Harmony. I agree with @monet-supply here: “I’d prefer to see Uniswap pursue the highest value L2s/L1s with a direct launch that preserves Uniswap’s autonomy and branding and lets us own the user relationship.”
We respect the decentralized aspect of the Uniswap DAO and are more than willing to cooperate on all fronts. In terms of accountability and transparency, we are a totally open book and are happy to dive into any and all discussions in regards to ZERO or any of our protocols, now or in the future.
In response to the screenshots you inserted above - I think there is no denying that getting a cosign from Uniswap would be a huge opportunity not only for Zero protocol, but any protocol who has the courage to go through the governance process and follow the procedure to move to an on-chain vote.
In terms of the proposal being a “benefit to zero”, we could not agree more. There is a unique opportunity for zero protocol and that is why we have committed 10% of our initial supply to Uniswap DAO as a token of our appreciation for their innovation and support.
I definitely agree with others stating how “as the v3 BSL has expired, protocols don’t need an explicit permission to friendly fork Uniswap v3”, this is part of the reason why we decided to go through with this process and ask permission to get the “blessing” of the DAO. We could in fact fork the code with the benefit belonging exclusively with ZERO, but instead we decided to pay respect to Uniswap DAO by formulating what we feel to be an equitable proposition - while at the same time introducing a new, collaborative, and mutually beneficial path forward for UniSwap to engage with protocols that seek to fork its code anyway.
To clarify, when I mentioned that I felt Uniswap wouldn’t vote, what does that mean?
I don’t personally expect or demand the responsibility for Uniswap Governance to vote on the many proposals, but the DAO is free to do so as they see fit.
What would be the topics that the Uniswap community would be able to vote on?
Directing incentives is the core functionality of veNFT power on a ve(3,3) dex
Will the Uniswap community get the revenue from the fee for receiving such tokens?
Uniswap has a right to revenue like any other ve token holder.
In response to my statements that I felt “Uniswap would not deploy on Polygon zkEVM” and my view being “known internally” means nothing short of what I stated.
The proposal for Uniswap v3 to deploy on Polygon zkEVM was first published in March (Uniswap V3 Launch on zkEVM). Now we are 6 months past that approved proposal and we have come to the internal conclusion that we do not feel Uniswap was likely to follow through with deploying on zkEVM. With this in mind, we decided that it would be a great opportunity to do exactly what we are proposing. Going through the proper channels, getting a sponsor, providing all necessary information, reaching out to delegates and offering 10% of our initial supply in pursuit of this unique opportunity to set a new precedent for Uniswap and protocols that aspire to follow suit.
I appreciate your commitment to maintaining Uniswap’s credibility and neutrality. However, it is important to note that the proposal doesn’t necessarily violate this principle. The intention behind endorsing Zero Protocol as a friendly fork is to foster collaboration and shared growth within the broader DeFi ecosystem, rather than favoring a specific project. This endorsement sets a precedent for future partnerships and demonstrates Uniswap DAO’s willingness to engage with emerging protocols for mutual benefit. By actively participating, Uniswap DAO can have a say in shaping the DeFi landscape and ensuring it remains open and competitive. I would like to emphasize that not supporting emerging protocols may cost the DAO in the long term also. This is evidenced from Uniswap v2 forks taking more from the DAO than they gave back (if anything at all was given).
We understand that voting on pairs to get bribes and fees might be difficult for the DAO. However, the proposal emphasizes that Uniswap DAO has the freedom to vote or abstain from voting as they see fit to pursue the best interest of the DAO and maintain neutrality.
If you regard zkEVM a fledgling chain and one that is not in the category of “highest value L2s” then this proposal won’t step on the toes of those that want to preserve Uniswaps autonomy and branding for the “high value” chains. As you already mentioned, since the BSL has expired, we do not need to request permission for the fork. However, we feel like creating a system that both protocols can benefit from would be the more logical route to proceed.
Uniswaps multi-chain expansion is becoming massive and we extremely support this movement in terms of user experience, ease of reaching numerous chains on one protocol. The concept of “friendly fork” can able both Uniswap and Zero Chain to innovative consequences. We have couple questions and rewies about this temparature check. The answers will lead us to vote on the on-chain proposal.
“Zero Protocol will utilize Uniswap’s established backend infrastructure as its foundational engine and be granted access to ecosystem-funded tooling.”
“Zero is a direct fork of the existing Retro project on Polygon POS, which already relies on Uniswap V3 for trading.”
Zero Protocol is described as a direct fork of Retro, but it’ll take Uniswap’s backend infrastructure as its foundational engine. How is it possible for a fork (Zero) to use some other backend (Uniswap) instead of the protocol it originally forked (Retro)?
Can you also briefly explain how will the Zero Protocol be the liquidity layer for Polygon zkEVM?
We voted “for” on this temperature check, and we’ll consider those answers for our future voting. We wish you good luck as ITU Blockchain delegation team
Although the mentioned concerns by the DAO about this proposal are fair, we believe that the benefits outweigh the costs. The main aspect to highlight is how the DAO is perceiving this proposal. It seems that, so far, the main concerns seem to be hesitation around 1) extending Uniswap’s name to a small, lesser-known team and 2) operationally setting up the structure behind how the DAO will vote on Zero protocol proposals.
As far as endorsing well-known protocols goes, this proposal isn’t necessarily meant to focus on that pursuit. Partnering with an established protocol is more of a growth play, where Uniswap attains a certain amount of tokens to vote on the decision making of that protocol, utilize those tokens for treasury diversification, and/or create incentives out of those tokens. This description would match what is occurring with the ARB token distribution. The goal here is to enable collaboration between larger protocols to aid the overall ecosystem’s health. Aligning incentives for big players is important.
However, this frame should be altered slightly when analyzing “friendly forks”, which, by definition, are going to be smaller, less established protocols who don’t yet have a stand-alone brand and would like to leverage Uniswap’s endorsement to help attract users+liquidity. Uniswap’s incentive here is not the governance part, meaning the operational part of involving itself in the protocol’s governance should not be the Uni DAO’s priority. The DAO can be involved as much or as little as it likes, and the 10% Zero token allocation still holds. We can limit the overhead–or we can decide to create a committee to manage the voting. Either way, this should not be the deal breaker for rejecting the proposal. Here, the idea follows more of a venture model, where the Uni DAO makes bets on a couple of its forks by recognizing them as partners and receiving ownership stake in those protocols. If the friendly fork ends up doing well, then there’s large upside for the treasury. This model won’t work as well for larger protocols since it’s never going to be the case that an established protocol will hand out 10% of their token balance.
But yes, we can’t just endorse every other protocol. The friendly fork must meet certain criteria, and this initiative is a good experiment, which would also help establish an ENS subdomain for recognizing these friendly forks all in one place. We believe that an initial round of due diligence on the merits of Zero protocol has already been conducted, implied by Polygon’s grant to aid in Zero’s development and liquidity-seeking initiatives:
Future friendly fork applications likely won’t have much more of a compelling pitch. And it seems Polygon zkEVM is also willing to advertise Zero as a predominant liquidity layer on their platform. All of this is only further pronounced if the following is true:
We (Michigan Blockchain) are therefore voting FOR this proposal.
