[Temperature Check] Create the Uniswap Foundation

Loved the initiative to further decentralize Uniswap

Also, imo the budget is pretty modest for the experienced crypto-native team.

Highly excited for the Uniswap’s journey to achieve peak decentralization

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The team structure being proposed is a step forward. Having a dedicated grants lead is definitely a step forward.

The proposal misses an answer to - What were the problems and learnings from the UGP? How is the Uniswap Foundation addressing them?

Re: UGP. Thank you for the comments here! (For others: Ken and I are also writing up some additional history and information about UGP to add as a comment in the forum later today and to the addendum in the next version of the proposal!)

Re: governance. Agree! And a proposed governance process revamp is definitely in scope for our first 3 months (inspired by this post, with additional community feedback)

I’ll publish answers to the rest of your questions in line:

  1. The biggest thing that stood out to me was 35% for research on incentive mechanisms.
  • Can you guys go into more detail on what you hope to achieve there and maybe give some more detailed examples of the types of things you want to explore using this funding?
    • Yes! The goal here is to fund MVPs of incentive mechanisms which work to achieve one or all of the goals of growth, sustainability, and decentralization of the Uniswap Protocol - primarily by increasing engagement and retention across a variety of stakeholder groups. Many protocols have experimented with liquidity mining and that could be in scope here, but there are also opportunities to explore other kinds of incentive programs. One example is a developer mining program, which would incentivize third-party integrations with the protocol to strengthen its network effects.
  • Will UF be using funding to provide actual incentives (i.e. some types of liquidity mining programs)?
    • Yes. That’s one of the reasons this is the largest bucket. The $21M (35% * $60M) would fund MVPs. If the MVPs are successful, grantees could take their learnings and propose a larger scale initiative to the community to be funded by the Treasury.
  • If the answer to the above is yes, what kinds of modeling will you be doing to before funding a given incentive mechanism MVP and will you plan to share the results of modeling with the community?
    • We have a 5% Incentive Program R&D grantee budget that would fund this kind of research and modeling. While we will work with grantees to determine the best modeling for a specific program, one example might include an estimation of marginal swapper, or marginal $1M of volume, benefit to Protocol network effects. In other words, how much additional TVL does one additional swapper prompt, what is that TVL’s impact on reduced slippage, how many additional swappers does that attract? This research, like all other research funded by grants, would be open sourced to the community.
  • Given that this is the largest part of grants budget, would it be fair to say that the UF thinks incentive scheme development is the largest factor in the future growth of the Uniswap protocol?
    • The most important input to the future growth and sustainability of the protocol is stakeholder growth, usage, and engagement — essentially, making it easier for the community to get involved. Incentive programs which reward Protocol contributors with UNI might not only bring new integrations, but also turn contributors into governors of the Protocol (a lockup could be a component of these programs). Because the success of one or multiple programs like this would potentially provide long term sustainability and growth for the Protocol outside of any one or set of external actors or interfaces, we believe it is an integral component of our budget and key to Protocol success.
  1. What types of candidates are you seeking for 3rd board member?
    1. Based on our experiences over the past few weeks, we’re seeking out an individual with a few characteristics. Most importantly, they should have 1) significant experience in crypto, and 2) a Founder mindset. Based on what we have seen thus far, we also would look for someone with 3) a law degree and experience working as a lawyer, to provide guidance to the Foundation on the evolving legal and regulatory landscape, and 4) previous Board experience particularly for an organization focused on open source software, technological infrastructure, and/or financial services. However, we believe we will learn a lot if and when the UF gets fully up and running and we begin to conduct Board interviews, and these criteria may change as a result.
  2. Is the advisory team permanent or will it roll over periodically as in the current UGP?
    1. Intend to keep working with the advisory team for as long as their contributions are valuable to the UF - which we forsee as being a long time! In the event of unexpected circumstances or advisors no longer being able to make a time commitment, we would seek to replace them with someone of equally high caliber. Also worth mentioning that we are not necessarily capping advisors at 4 and may add more over time as is helpful.
  3. Now that Uniswap labs has entered the NFT space via acquisition, will NFT focused tech be eligible for UF grants?
    1. UGP is open to any grantee project which benefits the Uniswap Protocol or ecosystem. If an NFT focused grant falls into that category, then definitely! Caravan is one cool example that came out of the Unicode Hackathon, it allows users to rent Uniswap v3 liquidity (NFTs) from one another.
    2. Also worth noting that the Uniswap Labs acquisition of Genie has no impact on the Uniswap Protocol, governance, or UNI token (covered in their blog post).

A suggestion:

I think the marketing and events budget looks low. I would like to see the Uniswap protocol begin to market itself in a big way. FTX is out here naming stadiums, but Uniswap logo, branding, mission and ethos is cooler in every way and I think has the potential to resonate with retail. Superbowl commercials. Official sponsor of Paris Fashion week. Headline sponsor of US womens soccer. The olympics. More e-sports partnerships. I would add another $10M to the first year’s budget to test out large scale sponsorships and see if they work for us.

  • I like this! We do have a 10% grants allocation for community growth ($6M with current budget) which will include sponsorships. Community - what do you think?

The UF team is conducting extensive research to determine the type of legal entity which best matches our ambitions, including our mission to make a positive social impact, and other operational needs (covered in the proposal above). Given these requirements, we are contemplating a US-based entity that would seek tax-exempt status.

If we go down this path, the entity would be a non-stock corporation, with no owners or equity. There has been no stock issuance, and we have no plans to do a stock issuance in the future.

That being said we should note there is no guarantee that tax-exempt status will be secured, and we may make modifications to UF’s structure and operations in the future. We will share more about our path forward with the community as soon as we are able to.

Thank you! Re: the team - we agree with that sentiment. We’re already very excited about the awesome applications which have been coming through Lever - and we’re very excited to empower, support, and work with Uniswap community members all over the world.

All UF decisions will be made with the best long-term interests of the Uniswap ecosystem — of the Protocol and all stakeholders — in mind. The individual interests of a single stakeholder in the ecosystem, such as Uniswap Labs (or any other entity or individual), will not sway these decisions.

We do want to highlight the fact that we plan to work with stakeholders in the ecosystem to publish a biannual State of the Ecosystem report, which will highlight developer tooling, libraries, and interfaces that exist for the Uniswap Protocol, as well as the high-level roadmaps of what teams contributing to the report are planning to build in the future. Our intention with this report is to make it easier for developers to navigate the ecosystem and to also discern what new tools they can build (without doing redundant work). We would welcome contributions to this report from all builders in the ecosystem.

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To respond to a few questions in the forum (@metaverbal) and on Twitter, we wanted to provide more information on the Uniswap Grants Program (UGP). We are also adding this information to the Addendum of the Proposal at the Consensus Check.

What is UGP, and how do I find out more about it?

The Uniswap Grants Program started after going through a governance vote in December 2020 for an allocation of $1.5M in UNI intended to last 6 months. While the initial set of priorities for UGP was narrowly scoped as an MVP to seed the ecosystem of developers, it has since grown to encompass more, including governance research, community building and education, and core protocol work. Due to the crypto market bull run we were able to give $7M in grants over 18 months.

Grants researcher @sovereignsignal also recently put together a fantastic (independent) write-up on the history of the UGP here.

For more information on UGP’s past work and grantees check out the following links:

What does a successful UGP grant look like? What are some UGP success stories?

Grantees have done some incredible work over the past 1.5 years - for more information, check out our recent retrospective on UGP v0.1.

However, most UGP grantees are less than a year old. Just like with any product, it may take some time and several iterations for grant projects to develop traction and see adoption. The first version of Uniswap only worked for a single LP and ETH/ERC20 pair, and looked much different than the Uniswap we know and love today (still live here!). Hardat, too, took time to become what it is today - Nomic Labs received its first grant in 2018.

With that being said, not every grant will have the same outcome as a Uniswap or Hardhat. Not every grant will have runaway adoption, just like with any startup. Even when a project does not have the expected or intended impact, it can still have a positive impact on the ecosystem, bringing in new developers, users, and ideas.

Grantee success can be a range of impactful outcomes and, although we can’t pick favorites, some notable highlights are:

  • Serv.eth Discord support - a globally distributed team of 10 supporting the Uniswap Discord server all hours of every day. They have resolved over 15,000 community support tickets (and counting!), from helping users set up their first wallet and making their first trades, to identifying scammers and helping others retrieve funds.
  • GFX labs cross-chain governance research - The GFX team have been active Uniswap contributors since the beginning — they were one of the first LPs on v3! Their UGP-funded research led to the the Protocol’s first cross-chain governance proposal, the deployment of the 1bps fee tier on Polygon.
  • Chaos Labs TWAP hardhat plugin - One of Uniswap’s most under-appreciated innovations is the TWAP oracle, a core but admittedly complex DeFi primitive. Chaos Labs recognized the need for more robust tooling and documentation to make integrating TWAPs more accessible. They created a Hardhat plugin so anyone can leverage its robust security and accurate price reporting.
  • Scopelift Seatbelt & Flexible Voting- Scopelift productionised Seatbelt for governance testing. This test suite not only protects against unverified contracts, but also simulates proposals locally to ensure they deploy results properly. Additionally, their initial work on Flexible Voting would enable governance tokens locked in other protocols (for example, cUNI) to be leveraged for cross-protocol governance voting.
  • OmniAnalytics uniswappeR - The first R package created to interact with, quickly query, and trade on Uniswap, opening the door for more advanced data analyses. The Omni team went above and beyond their grant scope to deliver video tutorials, extensive documentation, and an easy dashboard generator for in-depth exploration of trade history, LP and price simulations under infinitely customizable conditions including slippage and liquidity depth.
  • TechEducators Solidity Bootcamp - As an established web2 bootcamp, the team behind ETHAnglia have built an open source Solidity Bootcamp to better usher web2 developers into web3 with a focus on building secure Ethereum dApps. Their target demographic reaches to underserved populations in the UK, offering scholarships and free mentorships. Through this work, they have received recognition and further support from the UK government through the Department for Works and Pensions.

How will UGP be improved within the UF?

Even with the success cases listed above, there are a number of ways that we’re excited to improve UGP for the benefit of the ecosystem.

  • Provide grants to universities and research institutions: Today, UGP is a multisig without a legal entity so we are unable sign contracts with or award grants to universities and academic research institutions, among others. As a legal entity, the UF would allow us to work with these organizations.
  • Diversify assets: No legal entity also means UGP could not diversify its assets out of UNI due to a lack of clarity around tax liability. This has made it impossible to scope out and provide larger and longer-term grants due to UNI price risk. The ability to diversify our assets will allow us to award these kinds of grants, for more ambitious and impactful projects.
  • Full-time well-compensated team: UGP v0.1 was able to pay its small group of contributors part-time (≤30 hours per week). With an entity and full budget, the UF will be able to hire a full-time and well-compensated team. We also want to recognize the fact that a few UGP team members would still work 40+ hour weeks and weekends, uncompensated, due to a love for this work!
  • Upscale all of UGP: With a formal entity, larger budget, and a full-time team, we would be able to improve our internal processes, from the applicant pipeline through feedback cycles, decisions, disbursements, and ongoing grantee management. We can do more in proactive outreach to fill our pipeline with fresh ideas and new teams. We could shine more of a spotlight on the impact grantees have had on the community. We will also be able to scale up our legal and accounting capabilities required for a more comprehensive grants program.
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Hey Dan - Ken just added a lot more info about UGP and how we want to improve it as a comment below, and I’m about to add that to the Addendum of the Proposal as well for the Consensus Check. UGP won’t be sunset, it will operate under the UF and scale up its resources and team.

As for the kinds of ambitious projects we would now be excited to fund? Listing many below, but we’re just as excited to be blown away by new ideas the community dreams up.

  1. Novel incentive programs, like a developer mining program to incentivize third-party integrations with the protocol to strengthen its network effects (spoke about this a bit in my reply to Ashleigh)
  2. The extensive R&D and engineering work required to design, build, test, and deploy future versions of Uniswap. And of course, associated developer documentation, tooling, and support.
  3. New smart contract primitives improving Uniswap stakeholder experience. A recent example of this would be The Franchiser, whose audit was coordinated by UGP. The Franchiser for the first time allows for partial delegation and re-delegation of Compound-style voting tokens like UNI.
  4. New independent grant-making organizations, for instance, managed by University blockchain clubs, and focused on regions around the world like South America, Southeast Asia, Africa, and more.
  5. Grants to write versions of Uniswap in new languages to deploy on other chains (I.e. in Cairo for Starknet, in Rust for Solana, etc.)
  6. More middleware, including an open source streaming data platform for Uniswap pricing, trading, pool, and other data.
  7. More advanced tooling (ie 1-click position changes and fee collection), improved UI/UX, and more education for liquidity providers. Ditto for liquidity mining.
  8. An pro trader interface that offers a familiar UI/UX to the most popular centralized exchanges, like FTX and Binance
  9. On-site hackathon support at events around the world to work hand in hand with hacker teams
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Thank you! Appreciate it. We’re excited too

:partying_face: thank you!! appreciate it. we’re psyched

Hi @one, thanks for your comments and thoughts

  1. It would be well within the scope of the UF to welcome, encourage, and provide grants to research and analysis on the fee switch, and to promote better education around the mechanics of fee switch implementation. It would also be well within the scope of the UF to assist the community in decision-making regarding the fee switch, including putting out information regarding any polls or governance proposals regarding the fee switch (just as we intend to for all other governance proposals).

  2. The DEF is an unrelated independent organization from the UF. However I’ll send along two threads that Miller recently posted on their work, as they seem to be making nice progress on their stated goals:
    https://twitter.com/millercwl/status/1555542973215113217
    https://twitter.com/millercwl/status/1555541678336970752

  3. Ken and I wrote a bit in comments yesterday (will add to Addendum for Consensus Check) on why we believe this investment into UGP is required and how it will benefit Uniswap - the current size and setup of UGP does have limits and more capital would allow the team to build long-term relationships w dev shops including more ambitious multi-milestone grant projects.
    In our treasury diversification, we plan to pursue an approach which would minimize UNI price impact (we will publish a Foundation Treasury Diversification report for the second disbursement for community review prior to diversifying that UNI).

  • Full-time well-compensated team: UGP v0.1 was able to pay its small group of contributors part-time (≤30 hours per week). With an entity and full budget, the UF will be able to hire a full-time and well-compensated team. We also want to recognize the fact that a few UGP team members would still work 40+ hour weeks and weekends, uncompensated, due to a love for this work!

If I recall correctly from the initial UGP v.01 and renewal. The lead (you) is/was compensated 25/uni per hour ($360k a year at average sell price of $15), while the other members were compensated $150 a hour; 216k a year (both max capped at 30 hours per week).

Would these pay rates be increasing under the Uniswap Foundation?

Also, with the Uniswap foundation would a more official and regularly updated website be formed (not dependent on notion)? A quick look at the UGP page it only has wave 5 (current application is asking for wave 9?)

What is your stance on an oversight committee as part of the foundation? Or atleast making it easier to see how funds are moved to recipients (i.e. when list of awarded wave recipients is announced and posted, a link on each award amount to an etherscan movement of funds, so the community can see the actions of the funding.)

I highly doubt anyone in the UGP team was being compensated either 360k or 216k a year…

Cameron, on behalf of ConsenSys.

Establishing the Uniswap Foundation is a logical (and long overdue) step forward for the protocol and community. The proposal is led by some of Uniswap Labs’ best – Devin & Ken.

As broken out above in the proposal, capital allocation is within reason. Foundation funding of this size does require active management, reporting, and reassessment. We also believe the team understands and is capable of this.

Transparency & objectivity will be key factors for success.
We are excited to help and support the foundation in any way possible!

C

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Hey everyone!

@devinwalsh will join us for the Uniswap Community Call this Wednesday (August 10th) at 16:00 EST. Community call will be held in the Uniswap Discord.

event link: Uniswap

If someone can’t make it to the call but has something you would like to get more info, please send me questions via DM. Notes from the call will be shared after the call.

Looking forward on having a great discussion about this proposal!

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Those number’s are straight from the compensation outlay’s of the UGP .01v and renewal forum discussions here:

We propose the lead be compensated 25 UNI/hr (approximately $100 USD at time of this writing) capped at 30 hours/week. This compensation, along with the quarterly budget, will be allocated to the UGP multisig from the UNI treasury . In keeping with the committee’s commitment to the community, hours and duties will be logged publicly and transparently .

  • Extend the UNI Grants Program for an additional 6 months
  • Utilizing the remaining funds, scaling the grants program up to $8.5M in grants
  • All committee members to be compensated at $150USD/hr as needed for no more than 30 hours/week
  • Due to time constraints, Robert Leshner, Kain Warwick, and Ashleigh Schap are stepping down from the committee, to be replaced by John Palmer, Ariana Fowler, and Callil Capuozzo

I do think the compensation numbers are resonable if these were full time individuals working for the future foundation.

It is very likey that the member’s did not max out hours every week, so I understand your doubtfulness of the annualized number’s ($150/h x 30 a week x 4 weeks x 12 months) I gave.

I am supportive of this foundation proposal. As setting up an offical company would increase the amount of transparency in reporting requirements.

To the forum - in full transparency, Michael and I had a follow up conversation late last week about his experience with UGP. Although we’re saddened that Michael did not have a good UGP experience, we still do genuinely appreciate receiving such honest feedback on our processes. We plan to keep improving as UGP matures under the UF.

Thanks for the questions @naught, adding some clarifying details below.

I was compensated at 25 UNI/hr for the first 6 months with UNI at $4. After the first 6 months, my compensation, as well as all other contributor’s, was updated to $150/hr (reconciled in UNI) with a cap of 30 hours per week. This was market rate for Grants contributors at the time. You’re correct that at this rate, my annualized salary is $216k. (One note I’ll add though is that because of the UNI price decline over the past few months, I have deferred pay in order to ensure UGP could continue funding grants.)

Regarding other UGP multisig signers: these 5 individuals were cumulatively paid $20k for their efforts over the past 1.5 years (at $150 per hour, with some choosing not to be paid).

Regarding Grants subcommittee members: these members are compensated at $150/hour or less by the subcommittees they work for, based on appropriate market rates.

The UF, as a legal entity, will aim to offer competitive full-time compensation packages including fiat salary, health care benefits, and long-term vested UNI to our employees. Being able to offer full-time work with competitive packages will open up our talent pipeline considerably, and allow us to build the high caliber, talented team needed to achieve the UF’s ambitious goals. We plan to take into account market rates for an individual’s role and experience while putting together comp packages.

Yes! Most of the information on Waves is located in our Notion page. With more resources and a larger team, we will be able to to build a more robust website including a UGP Dashboard, and to make more frequent and detailed social media updates including grantee highlights and program updates.

We have published regular updates on Grants Waves from the @uniswapgrants Twitter account account in the past. However we are excited to do much more to keep the community up to date on our work in the future. As for oversight, we look forward to receiving regular input and feedback from our Advisors, and of course from the community. We intend to regularly attend existing Community Calls and to plan our own regular events (online and IRL) to field questions and input from the community, and to keep our Twitter DMs open for 1:1 discussion. We will also get community approval via Snapshot poll for any grant over $2M.

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I love the idea behind the Uniswap Foundation. I think the Uniswap Grants Program had too broad of a mandate in that it helped fund things that were only tangentially related to the actual Uniswap protocol (i.e. DeFi Education Fund).

I think we desperately need something that focuses solely on improving the Uniswap protocol and ecosystem specifically. It will help make the Uniswap ecosystem less forkable in my opinion.

I’ll let the others who are more knowledgeable debate the numbers, but I love the idea of funding things directly related to the Uniswap protocol.

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The creation of the Uniswap Foundation is the natural progression of 1) further decentralization of the protocol and 2) formalization of an effective grant issuing entity to benefit the community.

DAO treasuries should not sit idle in a native token balance. The development of professional foundation to put assets to work to improve the experience and grow the user base is essential to the long term future of Uniswap.

Uniswap is the most profound and innovative financial application of our lifetime! Now is the time to grow the ecosystem with more tooling, interfaces, and easy to manage documentation so we can onboard the next billion people into DeFi.

As a supporter of Ethereum (former Head of Growth, EEA) and long time Uniswap LP, I support @devinwalsh and @kenneth in this proposal.

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We support the proposal to form the Uniswap Foundation.

Having a foundation that has the necessary resources to attract top talent and build out a growing ecosystem of Uniswap products is key to the decentralization of the protocol and its continued growth.

We know Devin and the advisors/team members here, and believe they are the right people to take this initiative forward.

This is a step that aligns with our Delegation Platform pitch and is a good next step in UNI token holders becoming more active in the ecosystem. It will take a lot of work and motivated UNI holders/delegates to make the best of these resources and we are excited to contribute.

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