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.