Uniswap Revitalization and Growth

Happy Monday, everyone. I’ve created ten polls. Each temperature check has the same text and options.

Polls:

  1. Linea
  2. Scroll
  3. Polygon zkEVM
  4. zkSync
  5. Blast
  6. Base
  7. Taiko
  8. Moonbeam
  9. BSC
  10. Mantle

Voting closes Saturday

5 Likes

The initiative to bootstrap new chains makes sense. However, the cost for this proposal vs the intended Uni rewards seems high. Please clarify if I am misinterpreting the delopyment costs.

In the scenerio that all 10 deloyments pass the vote at 250k:

250k x 10 deployments = $2.5 million

Oku front end deployment costs = $450k (45k x 10 deployments)

Oku ongoing per month cost = $50k per month (5k per month x 10 deployments)== 500k per year

Merkl Angle = 200k euro (20k x 10 deployments)

Distributed rewards cost for Merkl = $75k

Total cost (ex Uni reward distribution) after 1 year = $1,225,000

In other words, for the $2.5 million in UNI rewards for the purpose of liquidity mining. UNI dao will be spending about 50% for the intended goal in costs. Bringing the total cost to $3,725,000.

Is this thinking correct Getty? Or am I misunderstanding how the deployments scale out?

EDIT: Also why is a UNI pair not incentivized part of the L2 deployments? I.e. UNI/USDC, UNI/ETH, if paying the rewards in UNI it gives liquidity providers a reason to use those UNI rewards by further liquidity providing or selling UNI by LPing in tight range, it also give users an outlet to sell the UNI if choosing to.

Selling the UNI for ETH or USDC to fund the Merkle should be a non-starter imo.

3 Likes

Good question. I don’t think all of them will pass, but if they do, you’re right on a per-deployment basis; however, Oku already supports (or will very shortly) six of the above chains. The deployment and maintenance costs would only apply to new chains. As for Merkl, it also depends on what they currently support and how much the total number of rewards are approved for. In both cases, the infrastructure is the base cost and can be helpful for further chain growth.

Regarding the UNI rewards/pair point. Maybe we should. Once we get through this set of polls (or maybe in tandem), we can decide whether rewards should be paid in UNI and, if so, if a UNI pair makes sense or if we should distribute them in ETH.

2 Likes

It’s actually a quite difficult vote for us as while we don’t think we should close off the opportunity of collaboration, but it makes more sense for those chains to provide incentive and also pay up for the integration costs. If the reasoning is simply because we want to expand on those chains, then shouldn’t we look for most effective and efficient method? Rather than spending so much on operation?

We believe this should been a separate voting as well. Having it as a bundled vote to such masks true cost we afraid

1 Like

But do think for bigger TVL networks and potentially big TVL networks, it might be worth the operation cost so we will be voting accordingly

1 Like

The below response reflects the views of L2Beat’s governance team, composed of @kaereste and @Sinkas, and it’s based on the combined research, fact-checking and ideation of the two.

We have gone through the above discussion and we agree with the arguments that some targeted investments to increase Uniswap’s position in the above chains would be beneficial in the long term.

At this point, we don’t have a strong opinion about the exact amount that should be spent to have a justifiable effect, we would rather see it as an experiment that may need to be followed up with additional investment based on the results and effect observed.

However, looking at @WintermuteGovernance analysis we think it’s reasonable to already distinguish chains that might use a higher investment already (BSC, zkSync Era, Avalanche) and others where we can take a more defensive approach. We are not sure about Blast as we don’t see it covered in the discussion but from the current results we see a strong sentiment towards funding it with rather a higher amount, we will just abstain at this point.

Although we are voting to fund these onboarding packages, we would like to see some sort of post-implementation analysis included in the budget so that we can have some lessons learned and insights that would allow us to make a more informed decision on how to move forward.

4 Likes

Thank you to everyone who participated in the ten polls.

Here is the summary of the outcomes

  1. Linea: $250k
  2. Scroll: $250k
  3. Polygon zkEVM: $250k
  4. zkSync: $500k
  5. Blast: $500k
  6. Base: $500k
  7. Taiko: $250k
  8. Moonbeam: $250k*
  9. BSC: $1m
  10. Mantle: $250k

Some of the temperature checks were quite close. For those, I default toward the popular vote, but if a delegate feels strongly that one of the amounts should be different, please post a comment.

Pools
I have gone through the top DEXs for each chain and came up with 3-5 pools for each chain and the allocation amount of the incentives. Please take a look here and feel free to message me with comments or post on this thread. In addition to the pools, I also included the top DEXs for each chain. Generally, I was looking for three things: top pools by volume, top pools where the volume traded exceeds the liquidity available, and how the liquidity was distributed.

Next steps
I’d like to send an onchain proposal this week that approves the following Onboarding Packages.

  1. Linea: $250k (w/Oku + Merkl)
  2. Scroll: $250k (w/Merkl)
  3. Polygon zkEVM: $250k (w/Merkl - UniV3 only)
  4. zkSync: $500k (w/Merkl)
  5. Blast: $500k (w/Oku + Merkl)
  6. Base: $500k (w/Merkl)
  7. BSC: $1m (w/Merkl)
  8. Mantle: $250k (w/Oku + Merkl)

This excludes Taiko because their chain deployment is a few months away but includes Blast because the mainnet is expected in the immediate future. As for Moonbeam, the temperature check seemed indecisive. I figure we can always grant it an onboarding package at a later date.

Of the eight above chains, Oku currently supports all except for Blast, Mantle, Linea, and Polygon zkEVM. Oku has already announced Polygon zkEVM will be supported, so this proposal would only require three new additions.

Angle Merkl’s current support can be found here. Merkl will need to support five new chains and their Uniswap v3 deployments; they support Polygon zkEVM, so they only need to add UniV3; they currently fully support base, and I need to confirm before the on-chain proposal that they can support zkSync.

Please review the linked spreadsheet and either post here or message me if you have feedback.

6 Likes

Thank you Getty. Looks like we’re on track to send this through via an onchain vote–just a couple of things:

The Deployment Accountability Committee is currently having meetings with each of the target chains from the series of snapshots. Our goal for these conversations is to see whether or not the target chain is open to matching a portion of the incentives provided by Uniswap. The forms of contributions that we’re looking for are either bootstrapping pool liquidity on the target chain or also providing incentives on such pools. Another important point is to note that most of these chains are not aware of this program. We believe that there should be a degree of alignment between Uniswap and the target chains, so making sure they’re conscious of our commitment is important. It could open up more opportunities in the future, even if the target chains aren’t open to matching today.

So far, we’ve conversed with Base, Moonbeam, Blast, and Taiko–but have active chats with all. Four meeting are taking place this week.

  • Base is on board with helping on the marketing side, if the Uni Foundation or Oku Tweet something related to the incentives that is pre-approved by Base’s team, they’ll RT. They’re also very interested in exploring collaborations in the long-run, like with v4 permissioned pools where KYC’d actors can use Uniswap. That’s tangential to this post, but again, good to know from an alignment perspective. It’s also worth having these conversations since the chain can give input on the pools, like Base told us not to incentivize wBTC pools on their chain since it wasn’t native–yet. So, that pool was replaced with a cbETH pool.

  • Blast is a straight “no” since they don’t want to inflict bias towards any DEX, which is fine since this deployment is more so an immediate go-to-market strategy from Uniswap’s end to quickly capture trading volume.

  • Moonbeam has spend some money on boostrapping pools as well as Oku integration costs, and they don’t want their efforts to be wasted, so they’ll come back to us shortly with a matching proposition from Moonbeam foundation. Not sure on the exact amounts yet.

  • Taiko will be mainnet sometime in April. Their team is keen on adding incentives and/or liquidity–currently discussing numbers.

Another final point is that chains like Mantle are prioritizing their native ecosystem. That’s verbatim what they texted us. That’s another good datapoint for the DAO to consider. Some chains are not worth incentivizing if we’re just going to see mercenary liquidity. A Uni v3 fork on one of these chains will do better simply because of a brand shift and new token.

So, before we more to an onchain vote that bundles all of these up, perhaps its best to stagger them, with multiple rounds of voting. Biweekly, we could put up an onchain vote with three target chains, for example. Delegates should have a datapoint included in the onchain vote regarding where our relationship stands with the target chain. As of today, Base and Blast are the only ones we have a definite answer from regarding their alignment with this program.

7 Likes

Quick follow-up here. I confirmed with the Merkl team that they can support zkSync.

The onchain proposal has been posted. We have updated the proposal description.

Voting will end on the 24th.

We find it a bit puzzling that despite the suggestion from @AbdullahUmar

@Getty and @GFXlabs team decided to go ahead and putting into “onchain vote that bundles all of these up” instead of taking more individual approaches or at least responding to his suggestions. While we understand that some community members want to push for them quickly, we do think it’s best that the community takes its time and consideration.

1 Like

Considering it’s a large amount of transfer, we believe that the community should review it more before proceeding including on method to leverage its negotiations.

Hey, a couple questions / suggestions:

  • I could not find any communication from Merkl in this thread, even though we’re planning to give them $260k. Maybe they could confirm that they’re ready to fulfill their side of the work, ideally provide some transparency on the tasks required to add support to a new chain.
  • Can we discuss more details about the potential success criteria and follow-ups? For one, analyzing the success of the program seems a more suitable task for a subDAO or the deployment committee, I don’t think realistically each delegate can do that individually. Would be nice if there was some budget included for running analytics. At least would be nice to look at the evolution of the liquidity before / during / after the incentive program, comparing that with liquidity and Uniswap’s market share in similar pools that are not incentivized by the program. The ultimate success anyway is “one of these chains grows into a major player”, which can only be measured on much longer timeframes.

At the moment I’m inclined to vote “Abstain” in particular because the vote is for all 10 chains at once and ~25% of the funds are planned to be spent on BSC. It’s difficult to see the justification for that, as I have doubts about the future growth potential of that chain relative to others (it’s already one of the largest!) and the fit of Uniswap v3 and it’s ability to take market share, as most of the tokens launched on BSC are fee-on-transfer, not supported by Uni v3. I might be wrong, but as of now it looks like opBNB would be much better fit, conceptually, to the incentive program.

Edit: voted for in the end, see here.

3 Likes

We voted Against as we’re in agreement with @AbdullahUmar and @Doo_StableLab here. This is a bit premature.

1 Like

Hi Doo,

We had discussed the proposal with @AbdullahUmar prior to posting it. We went through the various chains and ultimately decided it made sense to post the proposal. We respect your decision to vote against it, however, in the future please reach out or post here so we have an opportunity give you the necessary information.

1 Like

Sure thing, I’ll ask them to make a post.

Once the three months are completed, delegates should look at the remaining liquidity and Uniswap’s market share position to gauge the program’s success. Overall, the program is meant get Uniswap’s foot in the door and secure a stronger brand position on the chain.

We’ll put together some stats on how the Onboarding Packages perform, and perhaps if delegates want something further the UF could put up an RFP.

It’s what the majority wanted in the Temp Check, so that is what we put forth. We can understand the hesitancy, but we do believe BSC has the potential to be a core Uniswap deployment and has done fairly well without any support. This could be the push it needs to really thrive moving forward.

Separately, we agree opBNB could be good chain for the DAO to consider.

2 Likes

Just want to provide some more clarity here. We’ve been in close contact with Getty through this process, although the recent forum posts may not seem to display this. As the accountability committee finalizes its conversations, the majority of the feedback we’ve received from target chain has been, well, more disappointing than we hoped. Most are not looking to match our incentive package, unfortunately. They’re open to co market on X, but providing liquidity or incentives seems to be a no-go for most chains. To that end, these multi chain expansions seem primarily to hinge on the Uniswap dao. It’s up to us to decide whether or not we’d like to expand into these markets with more force, even if the target chain isn’t willing to contribute to this initiative. The accountability committee will remain in close contact with these teams in case any forms of reciprocity arise.

I’ll be putting in a Yes vote shortly for this proposal since, as a potential bull run ensues, it’s ideal for Uniswap to be well-positioned across these deployments.

Another note–chains aren’t exactly incentivized to match this program. They have Uni v3 forks that are native to their ecosystem that naturally attract new users. It’s akin to Uniswap, an established brand, expanding to a “new country”–but that country is more focused on supporting its “local businesses”. The edge that Uniswap has is brand. People can rely on a trusted product that’s uniform no matter where they go. The target chains see value in this secure brand. Many of their own users will only want to use Uniswap due to this value proposition. BUT the main issue here is front-end. The value of a front-end for retail is perhaps the most important aspect behind reliability and familiarity, and that’s a large reason why chains don’t want to double down with us regarding incentives. I’m not too sure how we can immediately address this. The current direction is using Oku. Target chains, however, are not quite as comfortable with this. I just wish we could do some type of white labeling with Oku and Uni Labs. It’ll be interesting to see how the BNB incentives do since that deployment is on the Labs front-end.

5 Likes

Thank you for clarification. That would been a helpful information.

We would have changed our voting but do worry about this finding. But if this is true @AbdullahUmar then doesn’t it make sense to only go with ones that Uniswap support on its front ends?

Hi Doo,

Two parts here. Multiple chains have invested in Oku integrations, so there is clear demand here. Practically every chain that hasn’t been adopted by Labs has relied on Oku. Polygon zkEVM, Scroll, Moonbeam, and I think others have entered into confidential agreements with the Oku team to bootstrap some liqudity/provide incentives. Like Polygon zkEVM has six figures committed. So there is demand.

The issue is around doubling down and attaining a higher degree of commitments from these chains. Oku is getting us from 0 to 1. But chains aren’t willing to double down to step 3 or 4. So, my personal perspective is that Oku is certainly helping with expansion–but there are inherent limitation from a negotiating standpoint for the accountability committee since we cannot promise the Uni brand.

3 Likes