Could you provide a short write-up on the examples you analyzed, and what you would propose based on your analysis? There are plenty of metrics in the dashboards we’ve shared, but there are not good examples for direct comparison given this is a novel funding mechanism with significant legal and financial overhead:

[FDV] Velodrome at $53M, Aerodrome at $12M, ZigZag at $9M, Quickswap at $40M to name a few. Though Ekubo seems like a great DEX, there is no guarantee it will capture the marketshare these DEXs have as activity and competition in the StarkNet ecosystem progress. Additionally, airdrop farmers are a factor. For reference, Aerodrome has the highest fees and TVL of any app on BASE (5x Uniswap) and trades at $12M. Curious on the justification for 5x AERO valuation? Especially given this is a pre TGE investment with far higher risks.

Also as a side note - with Kakarot - can see Uniswap eventually deploying to Starknet.

What KPIs would make sense for an Ethereum core development team? Improve the performance of all clients by 10%? Merge 10 EIPs per year? I’d like to reiterate the following point as well:

How about a minimum of 1 meaningful contribution to the Uniswap protocol per quarter as gauged by the Foundation or Labs or the delegate community? Given no milestones it's not like the DAO has recourse for this and I honestly don't really think it is worth including from my perspective since likely your team will be focused on your product?

While I would like to support this proposal, and am a big fan of the idea, I need to see a few concerns addressed.

$12m for 20% of the future token supply implies the uniswap dao will be investing in the Ekubo token at a $60mm fdv. In current market conditions and analyzing the L2 DEX landscape both pre TGE and liquid, this is a rich valuation and I would like to see it cut substantially in order to support the proposal.

Additionally, in order for the protocols to be aligned, both would need to hold the counterpart's token and not just dump the allocation. To address this alignment I would like to see a guaranteed lock included the proposal, where both parties commit to holding the tokens for X years. From your prior comment regarding "milestones not making sense and "the allocation funding development", it seems you will likely dump the tokens, leading to zero alignment between protocols.

Additionally, the claim that Ekubo will be core developers seems unclear as prior comments have alluded to. This would need KPIs added in order to show how this will be done.. The claim that "This is not a grant, where oversight and milestones are appropriate" means that that the Ekubo team should not promise to be a core developer. Either add KPIs and metrics of how this will be done, or take out of proposal all together.

Could you provide a short write-up on the examples you analyzed, and what you would propose based on your analysis? There are plenty of metrics in the dashboards we’ve shared, but there are not good examples for direct comparison given this is a novel funding mechanism with significant legal and financial overhead:

[FDV] Velodrome at $53M, Aerodrome at $12M, ZigZag at $9M, Quickswap at $40M to name a few. Though Ekubo seems like a great DEX, there is no guarantee it will capture the marketshare these DEXs have as activity and competition in the StarkNet ecosystem progress. Additionally, airdrop farmers are a factor. For reference, Aerodrome has the highest fees and TVL of any app on BASE (5x Uniswap) and trades at $12M. Curious on the justification for 5x AERO valuation? Especially given this is a pre TGE investment with far higher risks.

Also as a side note - with Kakarot - can see Uniswap eventually deploying to Starknet.

What KPIs would make sense for an Ethereum core development team? Improve the performance of all clients by 10%? Merge 10 EIPs per year? I’d like to reiterate the following point as well:

How about a minimum of 1 meaningful contribution to the Uniswap protocol per quarter as gauged by the Foundation or Labs or the delegate community? Given no milestones it's not like the DAO has recourse for this and I honestly don't really think it is worth including from my perspective since likely your team will be focused on your product?

While I would like to support this proposal, and am a big fan of the idea, I need to see a few concerns addressed.

$12m for 20% of the future token supply implies the uniswap dao will be investing in the Ekubo token at a $60mm fdv. In current market conditions and analyzing the L2 DEX landscape both pre TGE and liquid, this is a rich valuation and I would like to see it cut substantially in order to support the proposal.

Additionally, in order for the protocols to be aligned, both would need to hold the counterpart's token and not just dump the allocation. To address this alignment I would like to see a guaranteed lock included the proposal, where both parties commit to holding the tokens for X years. From your prior comment regarding "milestones not making sense and "the allocation funding development", it seems you will likely dump the tokens, leading to zero alignment between protocols.

Additionally, the claim that Ekubo will be core developers seems unclear as prior comments have alluded to. This would need KPIs added in order to show how this will be done.. The claim that "This is not a grant, where oversight and milestones are appropriate" means that that the Ekubo team should not promise to be a core developer. Either add KPIs and metrics of how this will be done, or take out of proposal all together.

Yes, this proposal requires trust in Ekubo's team. I also would not support it if it came from someone who did not have a long history of contributions to Uniswap protocol.

I made this proposal because I like Uniswap and I want to see it succeed. It's far easier to raise money for Ekubo via a traditional fundraise, and I was privately advised not to spend the energy and incur the risk to try to make this work. I talked about my motivation to do this on this Twitter space.

In the past I've made efforts to defend Uniswap from baseless accusations of plagiarism, and give credit where it's due [1][2][3].

Immediately after I left Uniswap, I revoked my access to the private GitHub repositories and deleted the V4 code from my computer. Ekubo is not a "clean room" implementation of the V4 AMM design: because I wrote a lot of the V3 and V4 code, I have more knowledge of Uniswap's code than just about anyone. Regardless, I reimplemented the V4 design in Cairo without the ability to reference V4 code, which is the reason we can make many improvements to V4.

Copyright law protects the specific expression of ideas, which in the context of software, means the actual code. It does not extend to the underlying ideas, design patterns, or mathematical algorithms that the code may implement. I certainly think there are other AMMs on Starknet that are 1:1 rewrites in Cairo and do violate the license, but Ekubo is not one of them, and for that reason it is in my estimation 3-5x more efficient than a fork.

The contributions to Uniswap protocol are secondary to the investment. I would emphasize what @eek637 says:

I don't think it's helpful to prescribe what DAOs, a nascent form of cooperation, can and cannot do without attempting to do it. And I don't think there will ever be a better opportunity for the DAO to experiment with this kind of proposal. The proposal process is sufficient due diligence to distribute $50+ million in grants, so I don't know how anyone can say it wouldn't be enough to make a much smaller investment with a potential in-kind ROI.

This is not an endorsement. The Uniswap ecosystem is free to bring its own trademarked AMM to Starknet even if the proposal succeeds. Ekubo, Inc. is designed by a different team and makes different choices in its design, e.g. the withdrawal fee.

This is a really convoluted point. VCs also risk reputation when they sell large amounts of tokens. As I said before, the DAO is free to sell or distribute the Ekubo tokens.

I will point to @eek637's reply:

We'll move this proposal to temperature check on Monday so we can measure the support.

From our perspective, it's unclear whether this proposal passing is actually the best thing long term to Ekubo, Inc. if it will enshroud the company in DAO politics and lead to bikeshedding, so we would appreciate faithful readings of the our proposal and comments.

After reading the responses here I am now uncomfortable with this proposal. The analysis I provided is I agree very insufficient due to the limited data available. It also uses a P/E metric for fees as earnings rather than being more equated to P/S which would make it untenable. It would be great to have some valuation analysis from VC's, as this proposal has not provided a proper breakdown of its own valuation for its ask.

My switch from mostly positive about the direction of this proposal to negative is contingent on transparency:

1. After reading that Ekubo Inc. is closed source, how do we know that Ekubo was not directly 1 to 1 rewritten in Cairo from the same codebase used for Uniswap v4? Why does this matter? It is basically giving the v4 license for something that was already paid for while the employee worked for Uniswap Labs. It gives unfair value extraction to an insider, who already gained from that same work.

2. If this is a core developer proposal, what is the breakdown of the core developer component value, vs the speculatory investment in Ekubo?

3. The proposal needs proper Due Diligence. It is out of depth for the UNI dao to vote for this as there may be inherent unknown conflicts of interest due to the proposal being a former member of Uniswap Labs. For example, was Moody's exit from Labs amicable?

4. There is a lot of value for enshrining a DEX on another chain, and also a lot of risk by giving that vote of trust and brand reputation to a closed source base. Paying $12 million to enshrine a Starknet DEX attestation is a backwards precedent to set.

5. UNI Dao is not a VC, the 20% received will be more like a liability than an asset; if the Ekubo tokens are ever sold it will create a negative opinion on UNI dao for selling on Ekubo token holders/users. While on the opposite side of this, Ekubo will be selling UNI without any oversight or consideration for UNI retail, who have already been heavily extracted from.

6. Overall I feel the questions are not being thoroughly answered in a way that reveals the specific objectives of the proposal title of being a core developer of Uniswap Protocol and how it differentiates from being a developer on labs.

After reviewing the proposal to onboard Ekubo, Inc. as a core developer, we will not be supporting this vote. The title of this governance post is misleading; this is not a matter of onboarding a core developer for the DAO, but rather an investment proposal. The current proposal lacks necessary scrutiny and sets a risky precedent for protocol governance. Especially, given the size of the request.

Our primary reason for this stance is rooted in what we believe to be the core purpose of protocol governance. While that may differ among stakeholders, we strongly believe it is NOT structured to facilitate investments with speculative valuations.

We won't engage in the due diligence process for this; however, we are open to facilitating introductions to investment firms capable of conducting proper diligence and have allocated capital for such scenarios as this.

We urge stakeholders involved in this vote to align this decision with their internal processes, seriously considering the check size.

_

As a delegate, I could think of many topics for discussion that might warrant capital allocation. Some of these could include onboarding appropriate core contributors, plans for cross-chain expansion, community grants, general growth plans, and fee switch implementation. Approving this proposal without appropriate knowledge, research, and thoroughness undermines potential goals and compromises the integrity of future protocol governance decisions.

Therefore, while we fully support Starknet, appreciate the efforts behind this, and thank @moody for his contributions to the protocol. We cannot endorse it in its current form.

Thanks @kfx and @MattOnChain for your comments.

Ekubo, Inc. will collaborate with any contributors to Uniswap protocol, including Uniswap Labs. I went into detail on what that might look like with my response to @Leighton.

Could you provide a short write-up on the examples you analyzed, and what you would propose based on your analysis? There are plenty of metrics in the dashboards we've shared, but there are not good examples for direct comparison given this is a novel funding mechanism with significant legal and financial overhead:

The investment will also most likely be subject to taxes; we don't know a way to avoid this.

My perspective: $12m is ~0.8% of the current treasury value and Ekubo is already doing similar volume to Uniswap's Optimism deployment without any incentives, a severely limited token bridge, no Starknet-native tokens, and only $2.5m in TVL (albeit mostly in stables due to gamification from AVNU.) There's obviously a lot of room for growth.

What KPIs would make sense for an Ethereum core development team? Improve the performance of all clients by 10%? Merge 10 EIPs per year? I'd like to reiterate the following point as well:

I believe our collaboration has the potential to significantly improve Uniswap V4. I say this as the ex-eng lead of Uniswap V4 who has already shipped a singleton AMM with concentrated liquidity on Starknet.

Regarding selling the UNI--we would do so to fund operations and pay taxes until we have a sustainable source of revenue. It could make sense to split the payment up over several calendar years to minimize these taxes, but this is an implementation detail that introduces additional risk for Ekubo, Inc.

I think if you consider the overhead of this proposal, it's unreasonable to claim the price is too high and we have to hold on to the UNI. This is not a typical venture deal of cash for equity. We are trailblazing this method which will open up future opportunities for the DAO to put its treasury to use.

I have no doubt that your alignment to Uniswap is legitimate and I hope this is a successful proposal, but we have seen too many asks for a lump sum of tokens that are subsequently mismanaged to not press for more information and medium-term oversight before funding this endeavor.

I think there is a misunderstanding of the spirit of this proposal, which is our fault. This is not a grant, where oversight and milestones are appropriate because the return for the grant is only some work product. This is an exchange of UNI tokens for future Ekubo tokens.

This exchange aligns incentives such that Ekubo, Inc., by primarily focusing its efforts on Ekubo protocol and secondarily sharing improvements with Uniswap protocol, is a core contributor to Uniswap. In other words, because of Uniswap's 20% stake in Ekubo protocol, Ekubo protocol could be considered Uniswap's outpost on Starknet. The investment of UNI carries with it all the typical early stage investor risks (e.g. funds mismanagement, risk of smart contract bugs, ecosystem risk.)

As such, there are also no requirements imposed upon the DAO on how the future Ekubo token would be spent to improve Ekubo protocol. If the DAO decides to sell or redistribute all its Ekubo tokens immediately, it is free to do so.

We would not advance a proposal that includes oversight on spending or milestones, because it would make fundraising from the DAO far more burdensome than fundraising from venture capitalists. Ekubo, Inc. is completely bootstrapped and has not raised funds from any outside investor; this UNI would be spent to accelerate the growth of Ekubo protocol via hiring and reduce the personal risk of the employees, which is generally the purpose of seed stage investing. The proposal also keeps intact our upside if Ekubo were to succeed, which is extremely important to motivate continued high quality research and development.

Thank you for your questions and comments @benhoneill! And please let us know whether this addresses your questions.

Would Ekubo retain solidity developer talent to actually contribute to the Uniswap codebase directly?

For uncontroversial improvements we would create issues on the GitHub repo describing each of our improvements and the impact, and also send pull requests with the changes.

For controversial changes, we could open discussions (potentially called a Uniswap improvement proposals) in the same format as EIPs to facilitate discussion. We can use data from Uniswap as well as Ekubo to support these proposals.

Ekubo will always benefit from having solidity developers on the team for any cross chain requirements.

Would Ekubo consider taking other supportive actions like managing the actual Uniswap V4 deployment on Ethereum? This would help showcase Ekubo Inc as a true core protocol dev team deploying a canonical V4 version.

If the process benefits from decentralization, we would be happy to take on the responsibility. I don't think there are any maintenance tasks for V4 post-deployment, but if it's considered valuable we can execute deployment scripts or participate in multisigs.

Yes, this proposal requires trust in Ekubo's team. I also would not support it if it came from someone who did not have a long history of contributions to Uniswap protocol.

I made this proposal because I like Uniswap and I want to see it succeed. It's far easier to raise money for Ekubo via a traditional fundraise, and I was privately advised not to spend the energy and incur the risk to try to make this work. I talked about my motivation to do this on this Twitter space.

In the past I've made efforts to defend Uniswap from baseless accusations of plagiarism, and give credit where it's due [1][2][3].

Immediately after I left Uniswap, I revoked my access to the private GitHub repositories and deleted the V4 code from my computer. Ekubo is not a "clean room" implementation of the V4 AMM design: because I wrote a lot of the V3 and V4 code, I have more knowledge of Uniswap's code than just about anyone. Regardless, I reimplemented the V4 design in Cairo without the ability to reference V4 code, which is the reason we can make many improvements to V4.

Copyright law protects the specific expression of ideas, which in the context of software, means the actual code. It does not extend to the underlying ideas, design patterns, or mathematical algorithms that the code may implement. I certainly think there are other AMMs on Starknet that are 1:1 rewrites in Cairo and do violate the license, but Ekubo is not one of them, and for that reason it is in my estimation 3-5x more efficient than a fork.

The contributions to Uniswap protocol are secondary to the investment. I would emphasize what @eek637 says:

I don't think it's helpful to prescribe what DAOs, a nascent form of cooperation, can and cannot do without attempting to do it. And I don't think there will ever be a better opportunity for the DAO to experiment with this kind of proposal. The proposal process is sufficient due diligence to distribute $50+ million in grants, so I don't know how anyone can say it wouldn't be enough to make a much smaller investment with a potential in-kind ROI.

This is not an endorsement. The Uniswap ecosystem is free to bring its own trademarked AMM to Starknet even if the proposal succeeds. Ekubo, Inc. is designed by a different team and makes different choices in its design, e.g. the withdrawal fee.

This is a really convoluted point. VCs also risk reputation when they sell large amounts of tokens. As I said before, the DAO is free to sell or distribute the Ekubo tokens.

I will point to @eek637's reply:

We'll move this proposal to temperature check on Monday so we can measure the support.

From our perspective, it's unclear whether this proposal passing is actually the best thing long term to Ekubo, Inc. if it will enshroud the company in DAO politics and lead to bikeshedding, so we would appreciate faithful readings of the our proposal and comments.

After reading the responses here I am now uncomfortable with this proposal. The analysis I provided is I agree very insufficient due to the limited data available. It also uses a P/E metric for fees as earnings rather than being more equated to P/S which would make it untenable. It would be great to have some valuation analysis from VC's, as this proposal has not provided a proper breakdown of its own valuation for its ask.

My switch from mostly positive about the direction of this proposal to negative is contingent on transparency:

1. After reading that Ekubo Inc. is closed source, how do we know that Ekubo was not directly 1 to 1 rewritten in Cairo from the same codebase used for Uniswap v4? Why does this matter? It is basically giving the v4 license for something that was already paid for while the employee worked for Uniswap Labs. It gives unfair value extraction to an insider, who already gained from that same work.

2. If this is a core developer proposal, what is the breakdown of the core developer component value, vs the speculatory investment in Ekubo?

3. The proposal needs proper Due Diligence. It is out of depth for the UNI dao to vote for this as there may be inherent unknown conflicts of interest due to the proposal being a former member of Uniswap Labs. For example, was Moody's exit from Labs amicable?

4. There is a lot of value for enshrining a DEX on another chain, and also a lot of risk by giving that vote of trust and brand reputation to a closed source base. Paying $12 million to enshrine a Starknet DEX attestation is a backwards precedent to set.

5. UNI Dao is not a VC, the 20% received will be more like a liability than an asset; if the Ekubo tokens are ever sold it will create a negative opinion on UNI dao for selling on Ekubo token holders/users. While on the opposite side of this, Ekubo will be selling UNI without any oversight or consideration for UNI retail, who have already been heavily extracted from.

6. Overall I feel the questions are not being thoroughly answered in a way that reveals the specific objectives of the proposal title of being a core developer of Uniswap Protocol and how it differentiates from being a developer on labs.

After reviewing the proposal to onboard Ekubo, Inc. as a core developer, we will not be supporting this vote. The title of this governance post is misleading; this is not a matter of onboarding a core developer for the DAO, but rather an investment proposal. The current proposal lacks necessary scrutiny and sets a risky precedent for protocol governance. Especially, given the size of the request.

Our primary reason for this stance is rooted in what we believe to be the core purpose of protocol governance. While that may differ among stakeholders, we strongly believe it is NOT structured to facilitate investments with speculative valuations.

We won't engage in the due diligence process for this; however, we are open to facilitating introductions to investment firms capable of conducting proper diligence and have allocated capital for such scenarios as this.

We urge stakeholders involved in this vote to align this decision with their internal processes, seriously considering the check size.

_

As a delegate, I could think of many topics for discussion that might warrant capital allocation. Some of these could include onboarding appropriate core contributors, plans for cross-chain expansion, community grants, general growth plans, and fee switch implementation. Approving this proposal without appropriate knowledge, research, and thoroughness undermines potential goals and compromises the integrity of future protocol governance decisions.

Therefore, while we fully support Starknet, appreciate the efforts behind this, and thank @moody for his contributions to the protocol. We cannot endorse it in its current form.

Thanks @kfx and @MattOnChain for your comments.

Ekubo, Inc. will collaborate with any contributors to Uniswap protocol, including Uniswap Labs. I went into detail on what that might look like with my response to @Leighton.

Could you provide a short write-up on the examples you analyzed, and what you would propose based on your analysis? There are plenty of metrics in the dashboards we've shared, but there are not good examples for direct comparison given this is a novel funding mechanism with significant legal and financial overhead:

The investment will also most likely be subject to taxes; we don't know a way to avoid this.

My perspective: $12m is ~0.8% of the current treasury value and Ekubo is already doing similar volume to Uniswap's Optimism deployment without any incentives, a severely limited token bridge, no Starknet-native tokens, and only $2.5m in TVL (albeit mostly in stables due to gamification from AVNU.) There's obviously a lot of room for growth.

What KPIs would make sense for an Ethereum core development team? Improve the performance of all clients by 10%? Merge 10 EIPs per year? I'd like to reiterate the following point as well:

I believe our collaboration has the potential to significantly improve Uniswap V4. I say this as the ex-eng lead of Uniswap V4 who has already shipped a singleton AMM with concentrated liquidity on Starknet.

Regarding selling the UNI--we would do so to fund operations and pay taxes until we have a sustainable source of revenue. It could make sense to split the payment up over several calendar years to minimize these taxes, but this is an implementation detail that introduces additional risk for Ekubo, Inc.

I think if you consider the overhead of this proposal, it's unreasonable to claim the price is too high and we have to hold on to the UNI. This is not a typical venture deal of cash for equity. We are trailblazing this method which will open up future opportunities for the DAO to put its treasury to use.

I have no doubt that your alignment to Uniswap is legitimate and I hope this is a successful proposal, but we have seen too many asks for a lump sum of tokens that are subsequently mismanaged to not press for more information and medium-term oversight before funding this endeavor.

I think there is a misunderstanding of the spirit of this proposal, which is our fault. This is not a grant, where oversight and milestones are appropriate because the return for the grant is only some work product. This is an exchange of UNI tokens for future Ekubo tokens.

This exchange aligns incentives such that Ekubo, Inc., by primarily focusing its efforts on Ekubo protocol and secondarily sharing improvements with Uniswap protocol, is a core contributor to Uniswap. In other words, because of Uniswap's 20% stake in Ekubo protocol, Ekubo protocol could be considered Uniswap's outpost on Starknet. The investment of UNI carries with it all the typical early stage investor risks (e.g. funds mismanagement, risk of smart contract bugs, ecosystem risk.)

As such, there are also no requirements imposed upon the DAO on how the future Ekubo token would be spent to improve Ekubo protocol. If the DAO decides to sell or redistribute all its Ekubo tokens immediately, it is free to do so.

We would not advance a proposal that includes oversight on spending or milestones, because it would make fundraising from the DAO far more burdensome than fundraising from venture capitalists. Ekubo, Inc. is completely bootstrapped and has not raised funds from any outside investor; this UNI would be spent to accelerate the growth of Ekubo protocol via hiring and reduce the personal risk of the employees, which is generally the purpose of seed stage investing. The proposal also keeps intact our upside if Ekubo were to succeed, which is extremely important to motivate continued high quality research and development.

Thank you for your questions and comments @benhoneill! And please let us know whether this addresses your questions.

Would Ekubo retain solidity developer talent to actually contribute to the Uniswap codebase directly?

For uncontroversial improvements we would create issues on the GitHub repo describing each of our improvements and the impact, and also send pull requests with the changes.

For controversial changes, we could open discussions (potentially called a Uniswap improvement proposals) in the same format as EIPs to facilitate discussion. We can use data from Uniswap as well as Ekubo to support these proposals.

Ekubo will always benefit from having solidity developers on the team for any cross chain requirements.

Would Ekubo consider taking other supportive actions like managing the actual Uniswap V4 deployment on Ethereum? This would help showcase Ekubo Inc as a true core protocol dev team deploying a canonical V4 version.

If the process benefits from decentralization, we would be happy to take on the responsibility. I don't think there are any maintenance tasks for V4 post-deployment, but if it's considered valuable we can execute deployment scripts or participate in multisigs.

Thank you for your comments and questions.

Is this proposal indicating that Uniswap would not launch on Starknet?

We don't know of any plans by the foundation or Uniswap Labs to build an AMM on Starknet.

How is it beneficial to the Uniswap v4 ecosystem by funding developers for a similar product on an alternative L2?

Our AMM contains significant improvements that would also be applicable to Uniswap V3 and Uniswap V4. We would contribute the same improvements to Uniswap V4 if this proposal passes, as well as any future improvements. We have also pioneered a protocol withdrawal fee, which provides valuable data to the Uniswap community.

These benefits are in addition to the Ekubo tokens, which the DAO can use to grow the Uniswap ecosystem however it sees fit.

Could Uniswap not just launch on Starknet in the future? Would Uniswap launching on Starknet cause an alignment issue, i.e. how would Ekubo and Uniswap cohabitate on Starknet?

When we say Uniswap, it's important to distinguish between the DAO, the foundation, and the company Uniswap Labs. If you are referring to Labs building its own AMM on Starknet, we believe a) there is not sufficient motivation and b) this token exchange aligns incentives so competition would not make sense. We think this proposal would be the most sustainable way for the Uniswap ecosystem to fund high quality research and development.

Does Ekubo plan on being Starknet centric or move to other L2 chains, such as Optimism, and Arbitrum?

We plan to focus on Starknet, and do not intend to compete with Uniswap on other chains.

How is the valuation of $12 million for 20% of the company derived? That would put the project at around $60 million FDV? Do the current metrics, volume, users, transactions etc justify this? Is this comparable to similar seed round raises in the current climate for a new project <7 months old?

There are lots of metrics in the provided dashboards, but I would add that there must be a premium for this proposal to make sense for the following reasons:

• The investment is made in UNI tokens as opposed to dollars (consider current liquidity, price risk and management overhead)
• The arrangement is nonstandard and will require additional legal support
• Ekubo, Inc. will become a core contributor to Uniswap protocol

Would it make more sense to have the UNI tokens tied to milestones from Ekubo over a 3-5 year period?

The costs to grow the business are largely upfront, which is where upside comes from in early stage investing. This deal would not make sense to us with milestones unless either party could terminate it at any point, which limits the potential upside for the DAO. It would also not account for the immediate benefits of our code contributions to V4. But above all, defining milestones for a 3-5 year time horizon is impossible, and a startup needs to manage rapidly shifting priorities. For these reasons we would not advance a proposal with milestones.

Does Ekubo’s extension architecture fit with hooks? Would these Ekubo extensions be able to be used as Uniswap Hooks on other chains? Is this covered in the standard contributor license agreement?

The idea for Ekubo extensions is mostly the same as hooks, but the implementations differ in some ways that we would encourage the Uniswap Labs team to adopt and in other ways that are more philosophical.

Extensions are written for a different execution environment, so not all of the extensions will make sense as hooks and vice versa. The collaboration on extensions and hooks would be limited to sharing of ideas, not copyright protected code.

After my first read through I came away positive from this proposal. Expanding the team to another ecosystem and Cairo language specialisation makes sense. It mitigates the risks of a Uniswap rewrite in Cairo.

I do have a few clarifying compound questions:

Is this proposal indicating that Uniswap would not launch on Starknet? How is it beneficial to the Uniswap v4 ecosystem by funding developers for a similar product on an alternative L2? Could Uniswap not just launch on Starknet in the future? Would Uniswap launching on Starknet cause an alignment issue, i.e. how would Ekubo and Uniswap cohabitate on Starknet?

Does Ekubo plan on being Starknet centric or move to other L2 chains, such as Optimism, and Arbitrum?

How is the valuation of $12 million for 20% of the company derived? That would put the project at around $60 million FDV? Do the current metrics, volume, users, transactions etc justify this? Is this comparable to similar seed round raises in the current climate for a new project <7 months old?

Would it make more sense to have the UNI tokens tied to milestones from Ekubo over a 3-5 year period?

Does Ekubo's extension architecture fit with hooks? Would these Ekubo extensions be able to be used as Uniswap Hooks on other chains? Is this covered in the standard contributor license agreement?

Looking forward to seeing how this proposal develops

Thank you for your comments and questions.

Is this proposal indicating that Uniswap would not launch on Starknet?

We don't know of any plans by the foundation or Uniswap Labs to build an AMM on Starknet.

How is it beneficial to the Uniswap v4 ecosystem by funding developers for a similar product on an alternative L2?

Our AMM contains significant improvements that would also be applicable to Uniswap V3 and Uniswap V4. We would contribute the same improvements to Uniswap V4 if this proposal passes, as well as any future improvements. We have also pioneered a protocol withdrawal fee, which provides valuable data to the Uniswap community.

These benefits are in addition to the Ekubo tokens, which the DAO can use to grow the Uniswap ecosystem however it sees fit.

Could Uniswap not just launch on Starknet in the future? Would Uniswap launching on Starknet cause an alignment issue, i.e. how would Ekubo and Uniswap cohabitate on Starknet?

When we say Uniswap, it's important to distinguish between the DAO, the foundation, and the company Uniswap Labs. If you are referring to Labs building its own AMM on Starknet, we believe a) there is not sufficient motivation and b) this token exchange aligns incentives so competition would not make sense. We think this proposal would be the most sustainable way for the Uniswap ecosystem to fund high quality research and development.

Does Ekubo plan on being Starknet centric or move to other L2 chains, such as Optimism, and Arbitrum?

We plan to focus on Starknet, and do not intend to compete with Uniswap on other chains.

How is the valuation of $12 million for 20% of the company derived? That would put the project at around $60 million FDV? Do the current metrics, volume, users, transactions etc justify this? Is this comparable to similar seed round raises in the current climate for a new project <7 months old?

There are lots of metrics in the provided dashboards, but I would add that there must be a premium for this proposal to make sense for the following reasons:

• The investment is made in UNI tokens as opposed to dollars (consider current liquidity, price risk and management overhead)
• The arrangement is nonstandard and will require additional legal support
• Ekubo, Inc. will become a core contributor to Uniswap protocol

Would it make more sense to have the UNI tokens tied to milestones from Ekubo over a 3-5 year period?

The costs to grow the business are largely upfront, which is where upside comes from in early stage investing. This deal would not make sense to us with milestones unless either party could terminate it at any point, which limits the potential upside for the DAO. It would also not account for the immediate benefits of our code contributions to V4. But above all, defining milestones for a 3-5 year time horizon is impossible, and a startup needs to manage rapidly shifting priorities. For these reasons we would not advance a proposal with milestones.

Does Ekubo’s extension architecture fit with hooks? Would these Ekubo extensions be able to be used as Uniswap Hooks on other chains? Is this covered in the standard contributor license agreement?

The idea for Ekubo extensions is mostly the same as hooks, but the implementations differ in some ways that we would encourage the Uniswap Labs team to adopt and in other ways that are more philosophical.

Extensions are written for a different execution environment, so not all of the extensions will make sense as hooks and vice versa. The collaboration on extensions and hooks would be limited to sharing of ideas, not copyright protected code.

After my first read through I came away positive from this proposal. Expanding the team to another ecosystem and Cairo language specialisation makes sense. It mitigates the risks of a Uniswap rewrite in Cairo.

I do have a few clarifying compound questions:

Is this proposal indicating that Uniswap would not launch on Starknet? How is it beneficial to the Uniswap v4 ecosystem by funding developers for a similar product on an alternative L2? Could Uniswap not just launch on Starknet in the future? Would Uniswap launching on Starknet cause an alignment issue, i.e. how would Ekubo and Uniswap cohabitate on Starknet?

Does Ekubo plan on being Starknet centric or move to other L2 chains, such as Optimism, and Arbitrum?

How is the valuation of $12 million for 20% of the company derived? That would put the project at around $60 million FDV? Do the current metrics, volume, users, transactions etc justify this? Is this comparable to similar seed round raises in the current climate for a new project <7 months old?

Would it make more sense to have the UNI tokens tied to milestones from Ekubo over a 3-5 year period?

Does Ekubo's extension architecture fit with hooks? Would these Ekubo extensions be able to be used as Uniswap Hooks on other chains? Is this covered in the standard contributor license agreement?

Looking forward to seeing how this proposal develops

We are generally supportive of such experiments and appreciate having this opportunity presented to the DAO. However, in its current state, we cannot support this proposal based on the requested funding amount of $12M and the implied valuation of $60M.

Taking into account the above:

• There is little to no information about the Ekubo token, its intended use outside of a governance token, plans for the remaining 80% of the token supply, etc.
• The Uniswap DAO has not established a framework for both treasury diversification and investment decisions. Which is unfortunate given this opportunity.
• The above is further amplified by the size of the investment which ranks Ekubo above the likes of Paraswap, IDEX, and QuickSwap by FDV. Which are protocols that exist on highly active chains and have done significant volume numbers. (We don’t agree that directly comparing Ekubo to these protocols is the correct approach, but it helps with determining a rough heuristic of market pricing).
• Starknet’s TVL sits at $152.8M ~ 2.5x the implied FDV of Ekubo.

Ekubo looks like an amazing DEX which has already proven to capture the majority of the DEX trading volume market share on Starknet. However, this decision requires the DAO to take a bet on both Ekubo and Starknet which at the implied FDV and lack of information is rather optimistic and forward-looking.

Even in traditional investment side, an investor with 20% share will likely at least bring their opinions to it, so if you literally just want funding but don't want DAO to be involved in it, the team should just raise from other ways, which you have noted as very easy.

@eek637 respectfully, is there anyway to enforce the following promise if it's passed? Previously we have seen many that said they will keep the promise because of their reputation and so far only few of them have kept from our understanding. Like if one of the objectives of Uniswap Foundation is to protect against legal issues, shouldn't it be also willing to step in to protect the Uniswap community?

Although the DAO seems to have significant reservations around VC-type investments, I am of the opinion that an effective treasury distribution is only proper if capital is allotted across various strategies with differing risk profiles. But the issue here is primarily a lack of structure and roadmap in regards to how the DAO should utilize the treasury. If we were to create a more comprehensive outline regarding the goals of how the "unissued" $UNI ought to be used, then analyzing this proposal would be a lot easier. Ideally, we should have a committee in place that conducts due diligence on behalf of the DAO, in concert with the musings that already occur on the forums. Just because we are a DAO does not mean that the level of DD we conduct should be less thorough than that of a typical VC.

Although I respect your intention to stay connected to the Uniswap protocol and take a more unorthodox route towards funding, the roadblocks in receiving that funding are still too impeding. Hopefully, within the next year or so, a system will be in place that will allow for funding like this to take place more effectively.

Most Important Reason for Rejecting the Proposal Beyond the DAO's organizational issues, another issue here is that the post-money valuation is simply too high relative to other DEXs, as highlighted by numerous delegates. That, coupled with the current market environment, makes it even tougher to get this proposal across the finish line.

The high valuation is the primary reason for why we will be voting against this proposal. If this were to be brought lower, we would reconsider--and I think many of the other delegates would too. Since the FDV seems to be the largest sticking point noted by the conversation so far, moving forward with a temp check at a $60M FDV, while most all delegates are advising against this, is not the best move.

Quick interjection for delegates: this proposal should be a point of reflection on the previous VC-type proposal created by the Retro/Zero team. They were not asking for any funding directly from the DAO; all they wanted was an endorsement, something that's costless as setting up a new subdomain for endorsed friendly-forks. Given that their protocol was also being actively supported by the Polygon team, I believe that we missed out on a financially FREE VC investment. If the protocol we endorsed failed, so what? It's a part of the VC process--and the risk to reward ratio was by and large favorable.

Now, if the DAO hesitated to endorse a proposal that was offering 10% of its tokens for free, I find it hard to see this proposal, asking for $12M, passing (and no, I am in no way equating or putting Retro/Zero and Ekubo on the same plane...I'm merely highlighting the DAO's conservative approach even when the risk to reward is clearly positive).

Hi all. Some good back and forth here. I’ve spoken to @moody and a few delegates to ask some clarifying questions. I thought it might be useful to post my understanding of the proposed transaction to help define the costs and benefits to both parties.

If this proposal were to pass, the following things would happen:

• 3m UNI would be transferred from the Timelock to Ekubo Inc.
• The v4-core-license-grants.uniswap.eth subname would be created
• An additional use grant text record for Ekubo Inc. would be created on that subname
• A new Franchiser contract would be deployed and funded with 2.5m UNI. That Franchiser instance’s owner would be the Timelock, and the delegatee would be Ekubo Inc.
• Ekubo Inc. would promise to transfer 20% of Ekubo’s native token to the Timelock’s proxy address on Starknet at some date in the near future
• Ekubo Inc. would promise to raise issues, participate in discussions, and make pull requests on the core and periphery repositories of the Uniswap V4 code prior to its freeze in the coming months. Such collaboration would be valuable given Moody’s experience in both architecting V4 and putting Ekubo into production on Starknet.

Moody has clarified above, but it is worth restating that the long-term alignment of Ekubo and Uniswap is financial in nature, not formally collaborative. Put more plainly, following the contributions Ekubo Inc. will make to V4, Uniswap governance can expect to benefit from their work via the potential increased value of its Ekubo token allocation rather than, for example, help building Uniswap V5. The Ekubo code base is and will continue to be closed source.

The idea of additional core contributors to the Uniswap protocol is certainly one that is worth exploring. There’s no strict definition of what the term means, and indeed a strict definition could limit the proliferation of teams that we ultimately consider to be core contributors. With that in mind, I suggest that delegates consider this proposal on the merits of the transaction itself, rather than the labels that might be applied to Ekubo Inc.

Agree with the other points but just wanted to mention that Zero team set up planned public sale right start right after the Uniswap voting for them ended. And they had to drop many requirements later and extend public fundraising twice already (end was supposed to Oct 4th, which they extended to Oct 12th, and now again extended till indefinite time till Chainlink oracle issue is fixed).

So while I hope the best of for Zero or any partners that approach Uniswap governance, it's important to think about partners we work with even if it's 10% of its tokens for "free".

1. Currently, Starknet only has 37 millon USD in TVL based on DeFi llama. Sure, it's partly that Starknet's token itself is not out yet, but if it's launched, and TVL increases, there will be also many similar AMM that are competing. It's very risky and early for Uniswap community to take such.

For example, Velodrome Finance is the most used AMM on Arbitrum and its marketcap based on Coinmarketcap is less than 5 million USD

2. Another issue is this might become a situation where Uniswap community doesn't benefit from the investment while the cost is still happening

3. I believe it makes more strategic sense for Uniswap community to work with Starknet and secure grant from Starknet and use the portion to potentially invest in dApps like Ekubo. The role of Uniswap governance should be minimizing the risk to UNI holders and Uniswap DAO while having sustainable and resilient growth.

I'm conflicted about this proposal.

It's interesting to compare it against the recent Zero protocol's proposal and see the contrast.

• Moody and the team have demonstrated their competence through track record of contributions to Uniswap and building an innovative DEX in a new programming language
• getting the to contribute to Uniswap v4 could be beneficial for both sides
• Ekubo is already a leading DEX on Starknet, already getting revenue & income
• there are no plans to rewrite & deploy Uniswap on Starknet AFAIK, so potential conflicts of interests are reduced
• there's clear potential upside in the investment.

On the other hand, Ekubo is an very eary stage, a few months old, no audits, not open source, no information about the token and its distribution, the expected oversight from the DAO is very limited.

It would be good to diversify the DAO treasury, but it can be done in less risky ways. It also could be a good unclear if the DAO should engage in VC-style funding. VCs take many shots and can afford higher-risk bets.

Question — when you say development teams of Uniswap and Ekubo to collaborate, do you mean Uniswap Labs? Hooks decentralize the development a lot, but the Labs surely remain a key contributor. Others here have already raised the question on how the collaboration will happen. It would be helpful to understand what Labs think about these plans.

We are generally supportive of such experiments and appreciate having this opportunity presented to the DAO. However, in its current state, we cannot support this proposal based on the requested funding amount of $12M and the implied valuation of $60M.

Taking into account the above:

• There is little to no information about the Ekubo token, its intended use outside of a governance token, plans for the remaining 80% of the token supply, etc.
• The Uniswap DAO has not established a framework for both treasury diversification and investment decisions. Which is unfortunate given this opportunity.
• The above is further amplified by the size of the investment which ranks Ekubo above the likes of Paraswap, IDEX, and QuickSwap by FDV. Which are protocols that exist on highly active chains and have done significant volume numbers. (We don’t agree that directly comparing Ekubo to these protocols is the correct approach, but it helps with determining a rough heuristic of market pricing).
• Starknet’s TVL sits at $152.8M ~ 2.5x the implied FDV of Ekubo.

Ekubo looks like an amazing DEX which has already proven to capture the majority of the DEX trading volume market share on Starknet. However, this decision requires the DAO to take a bet on both Ekubo and Starknet which at the implied FDV and lack of information is rather optimistic and forward-looking.

Even in traditional investment side, an investor with 20% share will likely at least bring their opinions to it, so if you literally just want funding but don't want DAO to be involved in it, the team should just raise from other ways, which you have noted as very easy.

@eek637 respectfully, is there anyway to enforce the following promise if it's passed? Previously we have seen many that said they will keep the promise because of their reputation and so far only few of them have kept from our understanding. Like if one of the objectives of Uniswap Foundation is to protect against legal issues, shouldn't it be also willing to step in to protect the Uniswap community?

Although the DAO seems to have significant reservations around VC-type investments, I am of the opinion that an effective treasury distribution is only proper if capital is allotted across various strategies with differing risk profiles. But the issue here is primarily a lack of structure and roadmap in regards to how the DAO should utilize the treasury. If we were to create a more comprehensive outline regarding the goals of how the "unissued" $UNI ought to be used, then analyzing this proposal would be a lot easier. Ideally, we should have a committee in place that conducts due diligence on behalf of the DAO, in concert with the musings that already occur on the forums. Just because we are a DAO does not mean that the level of DD we conduct should be less thorough than that of a typical VC.

Although I respect your intention to stay connected to the Uniswap protocol and take a more unorthodox route towards funding, the roadblocks in receiving that funding are still too impeding. Hopefully, within the next year or so, a system will be in place that will allow for funding like this to take place more effectively.

Most Important Reason for Rejecting the Proposal Beyond the DAO's organizational issues, another issue here is that the post-money valuation is simply too high relative to other DEXs, as highlighted by numerous delegates. That, coupled with the current market environment, makes it even tougher to get this proposal across the finish line.

The high valuation is the primary reason for why we will be voting against this proposal. If this were to be brought lower, we would reconsider--and I think many of the other delegates would too. Since the FDV seems to be the largest sticking point noted by the conversation so far, moving forward with a temp check at a $60M FDV, while most all delegates are advising against this, is not the best move.

Quick interjection for delegates: this proposal should be a point of reflection on the previous VC-type proposal created by the Retro/Zero team. They were not asking for any funding directly from the DAO; all they wanted was an endorsement, something that's costless as setting up a new subdomain for endorsed friendly-forks. Given that their protocol was also being actively supported by the Polygon team, I believe that we missed out on a financially FREE VC investment. If the protocol we endorsed failed, so what? It's a part of the VC process--and the risk to reward ratio was by and large favorable.

Now, if the DAO hesitated to endorse a proposal that was offering 10% of its tokens for free, I find it hard to see this proposal, asking for $12M, passing (and no, I am in no way equating or putting Retro/Zero and Ekubo on the same plane...I'm merely highlighting the DAO's conservative approach even when the risk to reward is clearly positive).

Hi all. Some good back and forth here. I’ve spoken to @moody and a few delegates to ask some clarifying questions. I thought it might be useful to post my understanding of the proposed transaction to help define the costs and benefits to both parties.

If this proposal were to pass, the following things would happen:

• 3m UNI would be transferred from the Timelock to Ekubo Inc.
• The v4-core-license-grants.uniswap.eth subname would be created
• An additional use grant text record for Ekubo Inc. would be created on that subname
• A new Franchiser contract would be deployed and funded with 2.5m UNI. That Franchiser instance’s owner would be the Timelock, and the delegatee would be Ekubo Inc.
• Ekubo Inc. would promise to transfer 20% of Ekubo’s native token to the Timelock’s proxy address on Starknet at some date in the near future
• Ekubo Inc. would promise to raise issues, participate in discussions, and make pull requests on the core and periphery repositories of the Uniswap V4 code prior to its freeze in the coming months. Such collaboration would be valuable given Moody’s experience in both architecting V4 and putting Ekubo into production on Starknet.

Moody has clarified above, but it is worth restating that the long-term alignment of Ekubo and Uniswap is financial in nature, not formally collaborative. Put more plainly, following the contributions Ekubo Inc. will make to V4, Uniswap governance can expect to benefit from their work via the potential increased value of its Ekubo token allocation rather than, for example, help building Uniswap V5. The Ekubo code base is and will continue to be closed source.

The idea of additional core contributors to the Uniswap protocol is certainly one that is worth exploring. There’s no strict definition of what the term means, and indeed a strict definition could limit the proliferation of teams that we ultimately consider to be core contributors. With that in mind, I suggest that delegates consider this proposal on the merits of the transaction itself, rather than the labels that might be applied to Ekubo Inc.

Agree with the other points but just wanted to mention that Zero team set up planned public sale right start right after the Uniswap voting for them ended. And they had to drop many requirements later and extend public fundraising twice already (end was supposed to Oct 4th, which they extended to Oct 12th, and now again extended till indefinite time till Chainlink oracle issue is fixed).

So while I hope the best of for Zero or any partners that approach Uniswap governance, it's important to think about partners we work with even if it's 10% of its tokens for "free".

1. Currently, Starknet only has 37 millon USD in TVL based on DeFi llama. Sure, it's partly that Starknet's token itself is not out yet, but if it's launched, and TVL increases, there will be also many similar AMM that are competing. It's very risky and early for Uniswap community to take such.

For example, Velodrome Finance is the most used AMM on Arbitrum and its marketcap based on Coinmarketcap is less than 5 million USD

2. Another issue is this might become a situation where Uniswap community doesn't benefit from the investment while the cost is still happening

3. I believe it makes more strategic sense for Uniswap community to work with Starknet and secure grant from Starknet and use the portion to potentially invest in dApps like Ekubo. The role of Uniswap governance should be minimizing the risk to UNI holders and Uniswap DAO while having sustainable and resilient growth.

I'm conflicted about this proposal.

It's interesting to compare it against the recent Zero protocol's proposal and see the contrast.

• Moody and the team have demonstrated their competence through track record of contributions to Uniswap and building an innovative DEX in a new programming language
• getting the to contribute to Uniswap v4 could be beneficial for both sides
• Ekubo is already a leading DEX on Starknet, already getting revenue & income
• there are no plans to rewrite & deploy Uniswap on Starknet AFAIK, so potential conflicts of interests are reduced
• there's clear potential upside in the investment.

On the other hand, Ekubo is an very eary stage, a few months old, no audits, not open source, no information about the token and its distribution, the expected oversight from the DAO is very limited.

It would be good to diversify the DAO treasury, but it can be done in less risky ways. It also could be a good unclear if the DAO should engage in VC-style funding. VCs take many shots and can afford higher-risk bets.

Question — when you say development teams of Uniswap and Ekubo to collaborate, do you mean Uniswap Labs? Hooks decentralize the development a lot, but the Labs surely remain a key contributor. Others here have already raised the question on how the collaboration will happen. It would be helpful to understand what Labs think about these plans.