[Temperature Check] Enable 1bp Fee Tier for UniswapV3 on Arbitrum
By GFX Labs & ConsenSys
Rationale:
This proposal seeks to deploy a 1bp fee tier for UniswapV3 on Arbitrum. This will allow users to trade with lower fees, making it more accessible and competitive with other decentralized exchanges. The optionality of a 1bp fee tier is useful for stable-to-stable swapping and can often be found among the top ten liquidity pools on each of Uniswap’s respective deployments.
Since the launch of the 1bp fee tier on mainnet, Polygon, and Optimism, the 1bp fee tier has directly led to growth in Uniswap’s DEX market share and directly competes with stablecoin DEX protocols.
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Benefits:
- Lower fee tiers increase competitiveness and incentivize more user activity.
- As liquidity is more concentrated, 1bp pools are more capital efficient, especially for stable-to-stable swaps.
- Lower fee tiers can also lead to increased volume and earnings for liquidity providers.
Why Arbitrum:
Favorable outcomes from deploying the 1bp fee tier on all other existing Uniswap v3 deployments make this an uncontroversial upgrade of the Arbitrum deployment.
Arbitrum has a thriving ecosystem of DeFi dapps that will benefit from less stable-to-stable friction. The Uniswap deployment on Arbitrum currently has ~200M of TVL and ~160M of volume. With Curve’s liquidity bribing mechanism losing efficiency, Uniswap is in a strong position to compete for traders’ flow and LPs’ liquidity by providing more competitive fee tiers.
Outlined from the discussion + additions.
Proposal
Target: Arbitrum Delayed Inbox
Function: createRetryableTicket
- To: Arbitrum UniswapV3 Factory
- l2CallValue: 0
- maxSubmissionCost: 300000000000000
- excessFeeRefundAddress: Uniswap Timelock
- callValueRefundAddress: Uniswap Timelock
- gasLimt: 200000
- maxFeePerGas: 1000000000
- Data: 0x8a7c195f00000000000000000000000000000000000000000000000000000000000000640000000000000000000000000000000000000000000000000000000000000001