Uniswap Treasury Report

[Userisky]

@AbdullahUmar

You may ask—what if the DAO incentivizes liquidity provision but is also implementing a POL strat? Here, you can use tools like Merkl to blacklist certain LP wallets from receiving rewards. In this manner, the incentives are solely given to other LPs.

Blacklisting large LPs from the DAO side should already demonstrate how problematic this idea is. The DAO should remain as decentralized as possible for the sake of all stakeholders, regardless of the political climate.

Blacklisting will also be used as marketing by other protocols, which, of course, won’t implement this, such as Aerodrome and Fluid. Can you imagine the backlash to a small group of third party treasury managers blacklisting Large LP’s?

Points like this seem influenced by discussions I have seen in relation to LP service providers or active LP service protocol documentation. Another major concern is that this program could be taken over by certain special interest groups who benefit from programs like POL.

@AbdullahUmar

We are now on over 25 chains. These chains lack liquidity. The UAC (accountability committee) and UEII (the growth/grants group) teams negotiate deals with target chains to bootstrap liquidity for particular pools, but that’s often not enough.

I read the cross-chain report section, hoping for more detail. Thank you for providing that information. Again, back to competition—how will this POL strategy not push sticky LPs to other DEXs seeking cross-chain like Fluid or Aerodrome? An LP would not want to compete with the protocol it’s trying to use. Aerodrome and Fluid can outperform Uniswap purely based on their models and the way they attract liquidity.

This is one of the main problems with proposals like this. The research looks at old solutions for new problems. The treasury is such a key piece of the Uniswap DAO. There should be many different proposed mechanism designs to innovate how it is used and how to stay competitive in a constantly changing DEX landscape. Antiquated solutions will lead the DAO down a path of obsolescence.

@AbdullahUmar

Less than 5% of the report focused on POL. LPs are arguably the backbone of the protocol. The goal is by no means to disenfranchise them.

The report is 5% focused on POL as a solution and 95% focused on frameworks, vampire attacks, offboarding/onboarding, audits/accountability structures, etc. A report like this should be 100% about mechanism design, treasury managers vs smart contracts, how each design impacts different stakeholders, offchain vs onchain management, the risks of having the treasury managed by third parties, legal risks, etc. The report is written as if it has already been decided that third-party treasury managers are the best approach.

I recommend that this report be condensed into an abstraction about the history of DAO Treasury management and an overview of different structures/frameworks. A new report should be led by mechanism designers, hook developers, and security researchers.

Two questions:

1. For this report, how many interviewed were direct Uniswap LPs, not LP service providers?

2. What exactly is the purpose of the stability fund? Is it to replace selling UNI in bear markets? If the DAO treasury simply becomes a place for dilution for all stakeholders, to the benefit of special interests, then the long-term implications and risks are not fully explored in this report.