Proposal: [REDO: Temp Check] Activate 2, 3, 4 bps fee tiers on Uniswap v3 on Base (Snapshot)
Vote: For
Rationale: Since this is a re-running of this temp chek in which we have already voted and justified the sense of our vote, we repeat our vote in favor for the same arguments, which we cite below:
SEEDGov:
Proposal: [Temp Check] Activate 2, 3, 4 bps fee tiers on Uniswap v3 on Base (Snapshot)
Vote: For
Rationale: We have read some of @aadams ’ research and understand their capabilities and support for the Uniswap ecosystem. Therefore, having analyzed the proposal and despite some concerns we have, we understand that it is worth trying to add new fee tiers in the ETH/USDC pair in Base, in order to make Uniswap more competitive, hopefully capturing part of Aerodrome’s market cap and adapting to new market conditions that may occur in the future, waiting for an expected reaction from that DEX to the move that Uniswap makes.
However, we do not want to overlook the potential disadvantages that the new implementation may bring:
Increased access to arbitrage: by reducing fees, previously unprofitable extractions of value will become profitable
Fragmentation of liquidity; starting new pools will keep liquidity more fragmented, which will increase LVR and IL, negative for liquidity providers; as well as potential cost overruns in more complex routing for the trader.
If the proposal is approved, we expect the proponent to conduct a subsequent analysis and present conclusions on the impact of the changes introduced, to corroborate that the proposed hypothesis has been validated. We encourage the proponent will consider a commitment to this sense for the onchain vote.