a16z is worried about turning on the fee switch that would make UNI look more like a security. So is proposing alternative experimentation that is more decentralised, and governance minimized.
The combination of the above and the twitter post by Dan Robinson points towards a16z stoping this proposal. It has just taken months for the slow drip of information to come out. It is unfortunate that the Uniswap Foundation @eek637@devinwalsh could not state this clearly to the community. Especially after having spent six figure + USD of UNI token for audits and development of a v3 fee switch soultion.
It sounds like A16Z is suggesting to only charge fees on interactions originated through front end UIs. Which, to me, would mean that anyone interacting with the smart contracts directly would not be paying any fees.
Could someone please let me know if the proposal has been approved and if it has been implemented? I would greatly appreciate any updates on its status.
All the fees collected would be at the protocol level - meaning even sophisticated users interacting with Uniswap through their own front end would still be paying fees, as it should be.
So my understanding is that all front ends are subject to the same protocol-level fee. All those fees are then effectively pooled together first and then distributed to the various staking pools on a stake-weighted basis.
These various staking pools all correspond directly to a single front end UI. Some front ends will not be available to certain jurisdictions. If, for regulatory reasons, a UNI staker cannot stake to 100% of these pools, they will not earn 100% of the protocol fees they are theoretically entitled to.
While this design proposed by a16z is just an inferior bandaid solution to token value accrual, made in response to a severe lack of regulatory guidance and a history of regulation-by-enforcement in the US, it is a good idea to try, in my opinion. Until regulations change, some value accrual is better than none. As usual, US retail participants will surely be disadvantaged. Hopefully some 3rd party solutions can emerge that allow everyone to have 100% staking pool exposure.
I think the protocol fees should be collected at the protocol level rather than the front end.
What if instead we add the requirement that in order to collect fees from the protocol you need to also provide liquidity? This would also ensure that ensure that people collecting revenue are also providing back to the protocol. Maybe it could work like a “boosted” pool.
I don’t think providing liquidity should be a requirement. I think keeping it simple is best. I’ve seen some other newer dex that just have people stake their tokens and they get protocol fees. Anything like that to stay competitive.
Pierce (of the sufficiently decentralised test) is heading a taskforce. Hopefully they’d resolve the CFTC-SEC turf fight but then, does immunity from criminal matters avoid ethics investigations … ?
