Porter and Guy writing from a16z. Given the expiration of Uniswap V3’s BUSL license in early April, we’re generally in favor of deploying Uni V3 to other chains before that date to avoid the copy-paste rush that will likely ensue otherwise. This has the added benefit of ensuring there’s an official deployment cycle so users on those chains can trust they’re using the original code base – preempting possible bad actors or just carelessness. Deploying Uni V3 obviously won’t forestall forks from occurring, but at least it offers an official version to users seeking that forum.
Additionally, as @devinwalsh’s comments suggest, we would also be in favor of a more formal process for choosing third party service providers or integrations for Uniswap going forward.
In our eyes, it’s important that Uniswap is able to create a level, objective playing field for all parties wanting to build or aid in its development. The community remains the ultimate decider once those conditions are set, but it’s key to foster a structured process that enables outside parties to fairly compete on the merits of their proposal. Like anything else, this competition benefits Uniswap long-term as a credibly neutral, market-based platform. It should receive the best services, at the best prices (if pricing is included) by choosing from the widest selection of parties given the same set of operating instructions. A structured process allows time for appropriate due diligence, weighing of pros and cons for each provider, and a comparative analysis that is difficult to conduct otherwise.
For transparency and timing, and because an end-to-end process has not fully occurred for this particular vote, the second part of this post outlines our preferred choice for Uniswap’s bridge provider.
To that end, we believe that LayerZero offers the best bridging solution – for transparency, we invested in them. We believe they are the most secure, decentralized, and philosophically aligned partner for Uniswap. Full investment disclosures can be found here. You can read our original investment thesis here for historical context.
LayerZero uniquely offers the capability for Uniswap to own its own immutable smart contract, while also enabling Uniswap to change or upgrade the security model of the bridge at the community’s discretion in the future. They’ve also delivered: LayerZero built out an omnichain governance module for Uniswap, found here.
Our support in LayerZero’s offering stems from its:
(1) Immutability - Uniswap can deploy LayerZero’s contracts and own them without having a dependency on LayerZero. Other bridge deployments can be changed by the bridging provider, but Uniswap could choose to be the only one with the capability of upgrading its bridge.
(2) Open and permissionless nature - LayerZero is open source, modular, and ownable by the applications that integrate it. Please see LayerZero’s implementation for a Uniswap governance executor open source here. Uniswap can future proof its deployment by choosing the oracle, relayer, validation library, and blockchain confirmation parameters in its deployment.
(3) Creation of extendible immutable validation libraries - LayerZero is building multiple validation libraries and provides the most modular bridging architecture we’ve seen. Uniswap could choose to implement a new validation library (a ZK light client for example) when it becomes battle tested. Importantly, this upgrade could only be done by Uniswap itself. LayerZero enables Uniswap to own and run its own bridge.
To highlight a critical point, LayerZero alone offers the ability for Uniswap to run its own Oracle or Relayer network using the LayerZero architecture, providing the most secure and modular message delivery system because Uniswap itself is participating in its execution. If the Uniswap community sets its oracle, relayer, validation library, and block confirmations in the endpoint settings, there is nothing anyone else can do to change it – it is immutable and only in the hands of the Uniswap community. This embeds flexibility to also take advantage of future cryptographically secure validation layers.
Others have brought up the core concern of security considerations. To date, LayerZero has processed over $5B in transactions with over 700 applications deploying 2,000 contracts without a single hack. Other bridge providers cannot point to this track record. Past performance is not an absolute guarantee of future success, but it is a strong indicator. To @GFXlabs’ first evaluation criteria, “How long has the system been running, and how much value has it been responsible for?” In our opinion, LayerZero has a demonstrated track record of success at scale that is unique amongst bridge providers.
In this vein, cross-chain Uniswap deployments should not compromise the decentralization of the protocol unduly, or introduce unnecessary risk without careful consideration. We do not believe that arbitrarily upgradable contracts owned by the underlying bridging provider or controlled by an external third party are in line with the ethos of community-centric, decentralized governance. LayerZero offers a credible alternative to that reality for the Uniswap community.
While we currently believe LayerZero is the best option, we will evaluate any other proposals in good faith and ultimately vote for what we think is best for Uniswap.
We appreciate everyone’s time and consideration.