Snapshot.page For UNI-V2 LP Holders

Proposal Discussion
#1

From the discussions I’ve read on here, we are yet to truly engage with Uniswap Liquidity Providers for their thoughts on the protocol fee switch (and other proposals).

As UNI holders, we are enormously reliant on the continued engagement of liquidity providers, yet unless they are both a UNI-V2 LP holder and a UNI holder, their voice is ignored from snapshots and governance. They currently have no way to create a unified way to voice their opinions and concerns.

I am recommending that we aim to solve this by introducing a Snapshot.page that allows UNI-V2 LP holders to signal their opinions.

I say this because if we consistently make decisions that push away LPs we are in deep trouble.

While this of course would not entitle UNI-V2 LP holders to protocol fees, their input into the governance process - I feel - will be a net good for all stakeholders.

EDIT: I should also clarify that I don’t think we should expect LPs to buy UNI to have their say. As mentioned, we are reliant on LPs and should make their input as frictionless as possible.

I also wouldn’t imagine LP holders would have UNI proportional to their value as an LP (put simply, if they LP for 10% of the protocol, it’s reasonable to assume they won’t also have 10% of the UNI supply).

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#2

It is to the best interest of every LP holder to have increased fees and NOT share them with UNI token holders.

I agree that they are an intrinsic part of Uniswap, but why should they be able to voice their opinion, if they are not loyal and can change the DEX they provide their liquidity on at any time? UNI token holders have put their actual money as their vote, which acts as a great method of filtering opinions.

This isn’t about voicing an opinion. Liquidity providers do this purely because of economical incentives. We’ve seen this with sushiswap etc- as soon as rewards dry up, they leave. So let’s not make this about anything else.

We should be focused on making uniswap the #1 DEX after free UNI incentives dry up. If uniswap remains the largest DEX - people will have interest to provide liquidity since they will earn part of the fees.

4 Likes
#3

why should they be able to voice their opinion

I take a little bit of an exception to that line of thinking. But in the context you mention loyalty; I think LPs would be far more interested in providing liquidity to Uniswap if they also knew they had a voice and that governors listened.

This isn’t about LPs taking over governance. This is about us - as responsible stewards of Uniswap - understanding the viewpoint of all stakeholders and aligning the platform in a way that benefits all (and thus capturing more value to UNI).

I feel dismissing stakeholders (not least the most important stakeholders on the network) and looking at UNI price with blinkers on, is enormously risky when the goal is to establish a dominant DEX that captures value over the very long term.

1 Like
#4

Uniswap liquidity providers have the opportunity to make proposals and share ideas and their point of view on this forum. But wouldn’t you agree that the final decision should be done by the UNI token holder?

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#5

The final decision is always with the UNI holders, hopefully I’ve made that clear in previous posts.

Snapshot.page for UNI-V2 LP is simply a good way of organising opinion that UNI holders can then take into account when deciding on how to vote. What you suggested of using this forum is not all that helpful as opinion gets fragmented and it can trivially be “sybil attacked”.

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#6

I apologize - you’re right. If its as much as just showing their opinion on matters - of course I agree.

I wouldn’t want them to make decisions on things though.

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#7

I agree that we need a way to make LPs have skin in the game. If not, as you say, they might pick up their bags and move to a different protocol any time they wanted.

Giving them some form of representation is definitely a good start, but more could be done. The Curve protocol might provide a good case study as they have recently started redirecting half of the trading fees away from LPs and toward CRV stakers. They did this without experiencing a significant drop in liquidity. The catch is that LPs are now entitled to receive CRV, so in a way, they can still get these fees by staking that CRV.

Note: I’m not saying that we should copy Curve, nor that Curve is the DEX gold standard. But they recently went through a similar process of taking fees away from LPs towards governance participants and it seems to have worked out for them (so far).

2 Likes
#8

I couldn’t have put it better myself, there’s no connection whatsoever and we’re kind of left in the dark…

#9

I agree
The final decision should be made by Uni holders

#10

Lp Holders were airdropped extra UNI as well weren’t they ? Yes they are important to the ecosystem and can use their airdropped UNI to vote. Final decision should be made by anyone holding UNI not LP tokens.

1 Like
#11

Please read the OP! No mention of LPs making any decisions, just signalling.

I also don’t think the argument that “LPs were airdropped so it’s OK” speaks to the ongoing need (as I put it) to engage LPs throughout the lifetime of Uniswap.