Authors: @monet-supply @coopahtroopa
Reference: https://uniswap.org/blog/uni/
This proposal offers the continuation of UNI Liquidity Mining, with reduced incentives to the same four liquidity pools as the genesis program.
This proposal aims to maintain the status quo, as suggested by @rleshner during the first ‘unofficial’ community call. (See 1:00)
The thought process behind ongoing liquidity mining is as follow:
To maintain the status quo, we propose to incentivize the same liquidity pools.
However, the biggest change to this proposal is to reduce the total monthly UNI allocation by half from 10M UNI per month to 5M UNI per month.
In its current form, 10M UNI was distributed each month for a total of two months.
This meant that 20M UNI was allocated from September 18th to November 17th. The four pools include in the genesis liquidity mining program included:
This breaks down to each pool receiving roughly 83,333 UNI per day or 13.5 UNI per block.
We propose to reduce the liquidity allocation to 5M UNI per month, for another two months.
These tokens should be allocated across the same four pools, meaning 10M UNI would be distributed in total as follows:
This means each pool would receive 41,666 UNI per day or 6.75 UNI per block.
The new Liquidity Mining incentives should begin from the day this proposal is executed, marked by passing an onchain governance vote subject to the UNI governance standards.
Initially, this proposal will be reviewed by the community via the temperature check process. A 3 day Snapshot poll will be created for UNI holders, and if the poll passes with a minimum 25,000 UNI support it can move on to the next step.
After receiving soft consensus via the temperature check process, this proposal will be posted on Snapshot for off-chain voting in a consensus check poll. Should the proposal pass with more than 50,000 UNI worth of voting weight, it will be moved to an onchain proposal.
Ongoing liquidity mining incentives allows UNI to be allocated to the community while we search for optimizations to distribution, including vesting and redirection towards other pools and programs like grants, governance participation and third-party integrations.
As more UNI enters the circulating supply, the potential for governance votes to pass quorum thresholds becomes more realistic, allowing the community to have a greater impact on the future evolution of Uniswap and the UNI token.
There is no need to drastically change the structure of the liquidity program, especially given the timing around incentives ending and the intent to start the next cycle as close to Nov 17th as possible.
We recognize that parties feel strongly on increasing and decreasing incentives, and view this proposal as a happy medium to maintain the status quo in lieu of more detailed incentive programs in the near future.
Benefits:
Drawbacks:
The specifications for this proposal should be updated in line with development support. We are currently looking for a party to lead the development of this proposal, and are open to researching different iterations of its implementation. General Requirements of Liquidity Mining include:
We invite those interested in leading development to comment on the proposal below or to reach out on Twitter.
This section will be updated with details of implementation when available.
We’ll try to hew as closely as possible to the proposed governance process posted here. However, with the imminent ending of the first liquidity incentive program we feel that it will benefit the community to take action sooner rather than later.
Given the timeframe around the incentives ending on November 17th, we’ve decided to pull the following pieces:
This timeline is tentative and subject to change
16 Nov 2020 -
17 Nov 2020 -
19 Nov 2020 -
23 Nov 2020 -
28 Nov 2020 -
TBD -
7 days later -
2 days later -
60 days later -
17 Nov 2020 -
20 Nov 2020 -
27 Nov 2020 -
TBD -
Governance would benefit from a more flexible distribution method for liquidity mining. Ideally, governance should be able to increase or reduce distribution speed, and change covered liquidity pools, without needing to deploy a new distributor contract each time. However, this would likely require substantially more development and review work. For this reason, we’re proposing to use a simpler distribution mechanism for the new 2 month incentive program, which will give the community time to build consensus around a long term solution.
19 Nov 2020 - Updated timeline
22 Nov 2020 - Change to proposed distribution:
28 Nov 2020 - Updated timeline
29 Nov 2020 - Updated timeline
Authors: @monet-supply @coopahtroopa
Reference: https://uniswap.org/blog/uni/
This proposal offers the continuation of UNI Liquidity Mining, with reduced incentives to the same four liquidity pools as the genesis program.
This proposal aims to maintain the status quo, as suggested by @rleshner during the first ‘unofficial’ community call. (See 1:00)
The thought process behind ongoing liquidity mining is as follow:
To maintain the status quo, we propose to incentivize the same liquidity pools.
However, the biggest change to this proposal is to reduce the total monthly UNI allocation by half from 10M UNI per month to 5M UNI per month.
In its current form, 10M UNI was distributed each month for a total of two months.
This meant that 20M UNI was allocated from September 18th to November 17th. The four pools include in the genesis liquidity mining program included:
This breaks down to each pool receiving roughly 83,333 UNI per day or 13.5 UNI per block.
We propose to reduce the liquidity allocation to 5M UNI per month, for another two months.
These tokens should be allocated across the same four pools, meaning 10M UNI would be distributed in total as follows:
This means each pool would receive 41,666 UNI per day or 6.75 UNI per block.
The new Liquidity Mining incentives should begin from the day this proposal is executed, marked by passing an onchain governance vote subject to the UNI governance standards.
Initially, this proposal will be reviewed by the community via the temperature check process. A 3 day Snapshot poll will be created for UNI holders, and if the poll passes with a minimum 25,000 UNI support it can move on to the next step.
After receiving soft consensus via the temperature check process, this proposal will be posted on Snapshot for off-chain voting in a consensus check poll. Should the proposal pass with more than 50,000 UNI worth of voting weight, it will be moved to an onchain proposal.
Ongoing liquidity mining incentives allows UNI to be allocated to the community while we search for optimizations to distribution, including vesting and redirection towards other pools and programs like grants, governance participation and third-party integrations.
As more UNI enters the circulating supply, the potential for governance votes to pass quorum thresholds becomes more realistic, allowing the community to have a greater impact on the future evolution of Uniswap and the UNI token.
There is no need to drastically change the structure of the liquidity program, especially given the timing around incentives ending and the intent to start the next cycle as close to Nov 17th as possible.
We recognize that parties feel strongly on increasing and decreasing incentives, and view this proposal as a happy medium to maintain the status quo in lieu of more detailed incentive programs in the near future.
Benefits:
Drawbacks:
The specifications for this proposal should be updated in line with development support. We are currently looking for a party to lead the development of this proposal, and are open to researching different iterations of its implementation. General Requirements of Liquidity Mining include:
We invite those interested in leading development to comment on the proposal below or to reach out on Twitter.
This section will be updated with details of implementation when available.
We’ll try to hew as closely as possible to the proposed governance process posted here. However, with the imminent ending of the first liquidity incentive program we feel that it will benefit the community to take action sooner rather than later.
Given the timeframe around the incentives ending on November 17th, we’ve decided to pull the following pieces:
This timeline is tentative and subject to change
16 Nov 2020 -
17 Nov 2020 -
19 Nov 2020 -
23 Nov 2020 -
28 Nov 2020 -
TBD -
7 days later -
2 days later -
60 days later -
17 Nov 2020 -
20 Nov 2020 -
27 Nov 2020 -
TBD -
Governance would benefit from a more flexible distribution method for liquidity mining. Ideally, governance should be able to increase or reduce distribution speed, and change covered liquidity pools, without needing to deploy a new distributor contract each time. However, this would likely require substantially more development and review work. For this reason, we’re proposing to use a simpler distribution mechanism for the new 2 month incentive program, which will give the community time to build consensus around a long term solution.
19 Nov 2020 - Updated timeline
22 Nov 2020 - Change to proposed distribution:
28 Nov 2020 - Updated timeline
29 Nov 2020 - Updated timeline
The price of UNI did a 10x and no fees were paid to holder. I don't see why it will fall especially as Monet-supply explained with TSLA that there is no obvious correlation between payouts and capital appreciation, especially nowadays
The price of UNI did a 10x and no fees were paid to holder. I don't see why it will fall especially as Monet-supply explained with TSLA that there is no obvious correlation between payouts and capital appreciation, especially nowadays
I think the same. I provide LP on uniswap because my fees are paid in tangible token, not a farmable sushi token that will crash because no sane mind will buy a farmable and stackable token in a bear market. I'd rather get paid in ETH and USDC.
Currently the fee switch is just a way to steal fees from LP nothing else. All the reasons to turn it on are to pump UNI bags.
I think the same. I provide LP on uniswap because my fees are paid in tangible token, not a farmable sushi token that will crash because no sane mind will buy a farmable and stackable token in a bear market. I'd rather get paid in ETH and USDC.
Currently the fee switch is just a way to steal fees from LP nothing else. All the reasons to turn it on are to pump UNI bags.
Among growth companies, buybacks are popular. "Growth companies" includes but is not limited to Tesla. Feel free to debate this factoid into the ground instead of the larger issue. lmao
Obviously you are of the opinion that Uniswap has many fundamental elements which make it similar to Tesla. Care to elaborate on why we should forgo profit and wait? Wait for what? I have no idea, it seems that the main product/service this protocol brings is complete.
Among growth companies, buybacks are popular. "Growth companies" includes but is not limited to Tesla. Feel free to debate this factoid into the ground instead of the larger issue. lmao
Obviously you are of the opinion that Uniswap has many fundamental elements which make it similar to Tesla. Care to elaborate on why we should forgo profit and wait? Wait for what? I have no idea, it seems that the main product/service this protocol brings is complete.
Reading this thread, it appears that people changed their minds because "Uniswap needs to be like Tesla." What fundamental similarities do a tech/auto maker and a DEX have?
I never explicitly said Tesla was doing buybacks but its only done by; Apple, Google, Berkshire etc. Warren Buffet's own advice, do you believe your asset is worth more than the market price?
Since Uniswap needs to operate like Tesla in your opinion, why not codify that philosophy into the rules? Or do you expect that your ultra-growth focused vision will be the majority consensus as more investors enter the space? I agree that Uni should focus on long term growth, but incentivizing future governance to that end seems extremely logical and offers more guarantees.
I never explicitly said Tesla was doing buybacks but its only done by; Apple, Google, Berkshire etc. Warren Buffet's own advice, do you believe your asset is worth more than the market price?
Since Uniswap needs to operate like Tesla in your opinion, why not codify that philosophy into the rules? Or do you expect that your ultra-growth focused vision will be the majority consensus as more investors enter the space? I agree that Uni should focus on long term growth, but incentivizing future governance to that end seems extremely logical and offers more guarantees.
Ultimately this is a lot of individual's money, and reducing risk in the protocol by letting holders realize a ROI has merits. It's something I would like to discuss more (both pros and cons, willing to change my mind) and ultimately see resolution through a vote.
:man_shrugging: Sorry, you lost me there.
The longer Uniswap keeps the fee switch off, the more this costs our competitors who need to run liquidity mining programs just to keep up. Time is on our side.
The longer Uniswap keeps the fee switch off, the more this costs our competitors who need to run liquidity mining programs just to keep up. Time is on our side.
When you're saying "our side" you're referring to those who can afford exposure to risk, for instance, that Ethereum fees won't sink the ship so to speak. Now, I don't like being controversial in that speculation, but to many smallholders, the short-term anguish caused by high fees is threatening and stagnating a lot of projects and pushing away a lot, if not all, of new low equity users. I hope this conjecture can be seen as uncontroversial.
The people who have enough tolerance for risk can also probably afford to accumulate the UNI that gets sold, they're also more likely to have the disposable income and the freedom to do their due diligence full-time, with minimal dependence on a job, to ensure their investment is going to bring a return.
I raised this question:
Do you think there’s another way to incentivise small Uni holders to maintain a position in governance, or do you think it’s unimportant/ they should just wait for an indeterminate amount of time?
I haven't really received a clear answer. I think this might be an interesting question for a lot of people. This fee switch will incentivize people with small amounts of UNI to hold but if we're not going to do the fee switch are there any contingencies that will help the DAO hold on to users who'd otherwise leave?
The only approximate response I got was this.
A very unfavourable take, I think. Wealthy people (who can afford the exposure to risk) don't care about one or the other, they care about both. Less wealthy people are more likely to be in a position where they can only really care about one, profit.
Is this forum going to end up littered with accounts that disengage and likely sell out? ie. https://gov.uniswap.org/t/how-to-tell-my-friends-why-lp-and-governance-is-important/8309/2?u=oblomov
The airdrop probably only enticed middle-class people, who could afford to experiment on uniswap in the eligibility period. There may be ways to entice or invite people from low socio-economic backgrounds which I think should also be explored.
People from all walks of life will help ensure Uniswap, as a platform, can be as neutral (and hopefully as a result, as universal) as possible in who it appeals to.
Here's a cheeky poll, which I hope might help everyone see what kind of DAO uniswap will have in the future.
[poll name=poll2 type=regular results=on_vote chartType=pie]
To expand on your comparison to Tesla: The price of Tesla went up because of the expectation of future profits from a near monopoly on electric cars ready to market, along with EV regulations. The price of a share represents the expected potential future earnings of Tesla. This method of valuation was first done by Goldman Sachs in the early 1900s. Stock buy backs are popular among "Growth" companies like Tesla because they function as a dividend for growth sectors.
In the case of the token we own the exchange to a small degree. Profits should be distributed to Uni holders. A dividend is only one way of providing value to company stock owners. Likewise, Uni should provide value to all of it's owners through a staking mechanism, hopefully tied to voting. This will incentivize voting to create growth and expand volume. As the reward would be directly proportional to the volume on the exchange. Even if the reward is small now, the price of Uni will increase dramatically because of the future potential earnings from higher volume. Similar to Tesla.
I don't see how giving fees to UNI holder will "keep small Uni holders engaged" either you care about governance or you care about profit. Pretending to care about governance and asking "rewards" for "loyalty" as many others claims is bs. Whales will be whales and there is already solution to delegate your vote so small holders can influence through delegated people.
Having a paid participation will only bring whales and greed, not people that care about the governance and the project. I loved (still love in fact) Uniswap because it had no bs token but sadly Uniswap clones created this mechanism with incentives that are not required to make a success like Uniswap did and Aave still does.
I don't see how giving fees to UNI holder will "keep small Uni holders engaged" either you care about governance or you care about profit. Pretending to care about governance and asking "rewards" for "loyalty" as many others claims is bs. Whales will be whales and there is already solution to delegate your vote so small holders can influence through delegated people.
Having a paid participation will only bring whales and greed, not people that care about the governance and the project. I loved (still love in fact) Uniswap because it had no bs token but sadly Uniswap clones created this mechanism with incentives that are not required to make a success like Uniswap did and Aave still does.
This are just my opinion against this fees redistribution.
It goes up because the baseline expectation is that the fee switch will be turned on. Just the utility of governance won’t worth $25bn fully diluted market cap. Imagine if Elon announces that Tesla shareholders will never ever get any dividend from the Tesla company nor will they do any buy back, Tesla shares will be worthless.
Is this proposal dead? Almost a month now since @monet-supply signalled the technical implementation of the proposal was ongoing. I know a lot of things may have changed in the space since then, but it would be helpful to know if the work on that implementation has been abandoned.
Among growth companies, buybacks are popular. "Growth companies" includes but is not limited to Tesla. Feel free to debate this factoid into the ground instead of the larger issue. lmao
Obviously you are of the opinion that Uniswap has many fundamental elements which make it similar to Tesla. Care to elaborate on why we should forgo profit and wait? Wait for what? I have no idea, it seems that the main product/service this protocol brings is complete.
Among growth companies, buybacks are popular. "Growth companies" includes but is not limited to Tesla. Feel free to debate this factoid into the ground instead of the larger issue. lmao
Obviously you are of the opinion that Uniswap has many fundamental elements which make it similar to Tesla. Care to elaborate on why we should forgo profit and wait? Wait for what? I have no idea, it seems that the main product/service this protocol brings is complete.
Reading this thread, it appears that people changed their minds because "Uniswap needs to be like Tesla." What fundamental similarities do a tech/auto maker and a DEX have?
I never explicitly said Tesla was doing buybacks but its only done by; Apple, Google, Berkshire etc. Warren Buffet's own advice, do you believe your asset is worth more than the market price?
Since Uniswap needs to operate like Tesla in your opinion, why not codify that philosophy into the rules? Or do you expect that your ultra-growth focused vision will be the majority consensus as more investors enter the space? I agree that Uni should focus on long term growth, but incentivizing future governance to that end seems extremely logical and offers more guarantees.
I never explicitly said Tesla was doing buybacks but its only done by; Apple, Google, Berkshire etc. Warren Buffet's own advice, do you believe your asset is worth more than the market price?
Since Uniswap needs to operate like Tesla in your opinion, why not codify that philosophy into the rules? Or do you expect that your ultra-growth focused vision will be the majority consensus as more investors enter the space? I agree that Uni should focus on long term growth, but incentivizing future governance to that end seems extremely logical and offers more guarantees.
Ultimately this is a lot of individual's money, and reducing risk in the protocol by letting holders realize a ROI has merits. It's something I would like to discuss more (both pros and cons, willing to change my mind) and ultimately see resolution through a vote.
:man_shrugging: Sorry, you lost me there.
The longer Uniswap keeps the fee switch off, the more this costs our competitors who need to run liquidity mining programs just to keep up. Time is on our side.
The longer Uniswap keeps the fee switch off, the more this costs our competitors who need to run liquidity mining programs just to keep up. Time is on our side.
When you're saying "our side" you're referring to those who can afford exposure to risk, for instance, that Ethereum fees won't sink the ship so to speak. Now, I don't like being controversial in that speculation, but to many smallholders, the short-term anguish caused by high fees is threatening and stagnating a lot of projects and pushing away a lot, if not all, of new low equity users. I hope this conjecture can be seen as uncontroversial.
The people who have enough tolerance for risk can also probably afford to accumulate the UNI that gets sold, they're also more likely to have the disposable income and the freedom to do their due diligence full-time, with minimal dependence on a job, to ensure their investment is going to bring a return.
I raised this question:
Do you think there’s another way to incentivise small Uni holders to maintain a position in governance, or do you think it’s unimportant/ they should just wait for an indeterminate amount of time?
I haven't really received a clear answer. I think this might be an interesting question for a lot of people. This fee switch will incentivize people with small amounts of UNI to hold but if we're not going to do the fee switch are there any contingencies that will help the DAO hold on to users who'd otherwise leave?
The only approximate response I got was this.
A very unfavourable take, I think. Wealthy people (who can afford the exposure to risk) don't care about one or the other, they care about both. Less wealthy people are more likely to be in a position where they can only really care about one, profit.
Is this forum going to end up littered with accounts that disengage and likely sell out? ie. https://gov.uniswap.org/t/how-to-tell-my-friends-why-lp-and-governance-is-important/8309/2?u=oblomov
The airdrop probably only enticed middle-class people, who could afford to experiment on uniswap in the eligibility period. There may be ways to entice or invite people from low socio-economic backgrounds which I think should also be explored.
People from all walks of life will help ensure Uniswap, as a platform, can be as neutral (and hopefully as a result, as universal) as possible in who it appeals to.
Here's a cheeky poll, which I hope might help everyone see what kind of DAO uniswap will have in the future.
[poll name=poll2 type=regular results=on_vote chartType=pie]
To expand on your comparison to Tesla: The price of Tesla went up because of the expectation of future profits from a near monopoly on electric cars ready to market, along with EV regulations. The price of a share represents the expected potential future earnings of Tesla. This method of valuation was first done by Goldman Sachs in the early 1900s. Stock buy backs are popular among "Growth" companies like Tesla because they function as a dividend for growth sectors.
In the case of the token we own the exchange to a small degree. Profits should be distributed to Uni holders. A dividend is only one way of providing value to company stock owners. Likewise, Uni should provide value to all of it's owners through a staking mechanism, hopefully tied to voting. This will incentivize voting to create growth and expand volume. As the reward would be directly proportional to the volume on the exchange. Even if the reward is small now, the price of Uni will increase dramatically because of the future potential earnings from higher volume. Similar to Tesla.
I don't see how giving fees to UNI holder will "keep small Uni holders engaged" either you care about governance or you care about profit. Pretending to care about governance and asking "rewards" for "loyalty" as many others claims is bs. Whales will be whales and there is already solution to delegate your vote so small holders can influence through delegated people.
Having a paid participation will only bring whales and greed, not people that care about the governance and the project. I loved (still love in fact) Uniswap because it had no bs token but sadly Uniswap clones created this mechanism with incentives that are not required to make a success like Uniswap did and Aave still does.
I don't see how giving fees to UNI holder will "keep small Uni holders engaged" either you care about governance or you care about profit. Pretending to care about governance and asking "rewards" for "loyalty" as many others claims is bs. Whales will be whales and there is already solution to delegate your vote so small holders can influence through delegated people.
Having a paid participation will only bring whales and greed, not people that care about the governance and the project. I loved (still love in fact) Uniswap because it had no bs token but sadly Uniswap clones created this mechanism with incentives that are not required to make a success like Uniswap did and Aave still does.
This are just my opinion against this fees redistribution.
It goes up because the baseline expectation is that the fee switch will be turned on. Just the utility of governance won’t worth $25bn fully diluted market cap. Imagine if Elon announces that Tesla shareholders will never ever get any dividend from the Tesla company nor will they do any buy back, Tesla shares will be worthless.
Is this proposal dead? Almost a month now since @monet-supply signalled the technical implementation of the proposal was ongoing. I know a lot of things may have changed in the space since then, but it would be helpful to know if the work on that implementation has been abandoned.
While the point about tesla and uni is a good one, not activating the fee switch will cause the uni price to go down. People are expecting it and holding it with that anticipation. Personally, if there is no fee switch id rather hold thousands of sushi that I can stake than hold thousands of uni that have 0 impact on any votes. Im sure others will do the same.
Similar to others here I have real concerns about the length of time this governance cycle has taken relative to other governance cycles in other ecosystems (ie. Compound).
While I appreciate this is a non trivial decision - it shouldn't take two months+ to reach an executable consensus for the adjustment of distribution parameters on a pre-existing distribution contract.
Similar to others here I have real concerns about the length of time this governance cycle has taken relative to other governance cycles in other ecosystems (ie. Compound).
While I appreciate this is a non trivial decision - it shouldn't take two months+ to reach an executable consensus for the adjustment of distribution parameters on a pre-existing distribution contract.
What am I missing here - please correct me if I've over simplifying this process.
A proposal that is developed collectively by the active part of the community and is somewhat consensually approved by it could be less contentious. A lot of details could be decided by simple votes.
Regarding "consensually approved": The proposal already went through Temperature Check and Consensus Check Snapshot polls, with ample time for community to discuss and vote. There was a clear majority meeting participation thresholds in both cases.
A proposal that is developed collectively by the active part of the community and is somewhat consensually approved by it could be less contentious. A lot of details could be decided by simple votes.
Regarding "consensually approved": The proposal already went through Temperature Check and Consensus Check Snapshot polls, with ample time for community to discuss and vote. There was a clear majority meeting participation thresholds in both cases.
The forum / snapshot method is more transparent than a Discord channel where you don't establish a readily accessible record and cannot enforce that participants are UNI holders.
I think discord group sounds a great idea. I feel Uniswap's discord is relatively under-utilized comparing to other projects.
Do you want to take a lead on starting that? I feel at least several active members would be willing to support there.
While the point about tesla and uni is a good one, not activating the fee switch will cause the uni price to go down. People are expecting it and holding it with that anticipation. Personally, if there is no fee switch id rather hold thousands of sushi that I can stake than hold thousands of uni that have 0 impact on any votes. Im sure others will do the same.
Similar to others here I have real concerns about the length of time this governance cycle has taken relative to other governance cycles in other ecosystems (ie. Compound).
While I appreciate this is a non trivial decision - it shouldn't take two months+ to reach an executable consensus for the adjustment of distribution parameters on a pre-existing distribution contract.
Similar to others here I have real concerns about the length of time this governance cycle has taken relative to other governance cycles in other ecosystems (ie. Compound).
While I appreciate this is a non trivial decision - it shouldn't take two months+ to reach an executable consensus for the adjustment of distribution parameters on a pre-existing distribution contract.
What am I missing here - please correct me if I've over simplifying this process.
A proposal that is developed collectively by the active part of the community and is somewhat consensually approved by it could be less contentious. A lot of details could be decided by simple votes.
Regarding "consensually approved": The proposal already went through Temperature Check and Consensus Check Snapshot polls, with ample time for community to discuss and vote. There was a clear majority meeting participation thresholds in both cases.
A proposal that is developed collectively by the active part of the community and is somewhat consensually approved by it could be less contentious. A lot of details could be decided by simple votes.
Regarding "consensually approved": The proposal already went through Temperature Check and Consensus Check Snapshot polls, with ample time for community to discuss and vote. There was a clear majority meeting participation thresholds in both cases.
The forum / snapshot method is more transparent than a Discord channel where you don't establish a readily accessible record and cannot enforce that participants are UNI holders.
I think discord group sounds a great idea. I feel Uniswap's discord is relatively under-utilized comparing to other projects.
Do you want to take a lead on starting that? I feel at least several active members would be willing to support there.
Thank you @monet-supply !!!
Thank you @monet-supply !!!
I'm okay losing ground on the WBTC-ETH pair because to be honest those LPs have very limited IL risk compared with the fiat pools, so giving them too much is a mistake. But the fiat/ETH pools are extremely important and those LPs face serious IL risks.
Even a modest mining program would demonstrate that the governance here isn't broken. Holding UNI should be a growth investment, and done in conjunction with providing liquidity. If you are just HODLing UNI market bought, never providing liquidity in other key pairs, and making your game plan that no new UNI is ever issued and you can just take that 0.05% that seems like the completely wrong approach. This early in the stage protocol inflation is necessary to capture and retain market share. You can provide liquidity in the incentivized pools to keep your UNI % of the network strong. But having zero UNI emissions will kill this protocol and make the 0.05% meaningless.
If you want buy backs and dividends and no growth just buy a cigarette stock like MO or PM.
Even a modest mining program would demonstrate that the governance here isn't broken. Holding UNI should be a growth investment, and done in conjunction with providing liquidity. If you are just HODLing UNI market bought, never providing liquidity in other key pairs, and making your game plan that no new UNI is ever issued and you can just take that 0.05% that seems like the completely wrong approach. This early in the stage protocol inflation is necessary to capture and retain market share. You can provide liquidity in the incentivized pools to keep your UNI % of the network strong. But having zero UNI emissions will kill this protocol and make the 0.05% meaningless.
If you want buy backs and dividends and no growth just buy a cigarette stock like MO or PM.
If UNI hodlers want an inflation shield we should subsidize an UNI/ETH pool. This is how every other farm does it. I know some at UNI like to think we are 'better' than 'degen' farms but ignoring the basic principle of subsidizing liquidity in the inflated coin is a massive mistake and is part of what is creating this rift in the community leading to zero emissions.
Can someone explain to me where we're at in this process? Personally I'm against adding liquidity incentives to the four main pairs but it's kinda crazy how slow this process has been. I'd rather see action that I disagree with than nothing at all. There are a few whales that control voting anyway right now so what's the hold up?
I don't think reinstating UNI rewards accomplishes anything significant enough to justify the massive inflation and devaluing of the UNI token.
I don't think reinstating UNI rewards accomplishes anything significant enough to justify the massive inflation and devaluing of the UNI token.
The damage these additional 5M/month UNI rewards causes is tremendous. I hope when it comes time to vote, there is a silent majority who comes out to vote AGAINST the continuing of UNI LP rewards.
Let's wait until liquidity hints at becoming a problem before throwing more UNI around in a way I'd consider wreckless.
In light of Uniswap’s liquidity mining program, here’s some research on how centralized exchanges incentivize liquidity. Granted CEXs tend to have central order limit books (CLOBs) rather than an AMM design, so the mapping isn’t perfect.
Here is the write-up, with the highlights below:
In light of Uniswap’s liquidity mining program, here’s some research on how centralized exchanges incentivize liquidity. Granted CEXs tend to have central order limit books (CLOBs) rather than an AMM design, so the mapping isn’t perfect.
Here is the write-up, with the highlights below:
In a simplified exchange model, they compete for liquidity - each one wants deeper order books and tighter spreads to get more volume. No one wants to trade on an exchange with lots of slippage. It turns out you can modify the fee model to incentivize particular behavior. Most exchanges today use a “maker-taker” model, where the taker of liquidity (market orders) pays the maker of liquidity (the limit order creator). Ex: taking a share off the exchange costs 0.3 cents and the trader who added that share gets 0.25 cents as cashback. This incentivizes traders to put a lot of limit orders on exchanges instead of market orders.
In a sense, Uniswap is the epitome of a maker-taker exchange as currently, all the 30 bps fee goes to the liquidity provider. This contrasts significantly with CLOB DEXs, who give meager < 2 bps rebates to market makers. We know that increasing rebates (via liquidity mining) will increase total liquidity, but the lower slippage did not lead to a meaningful increase in volume. Therefore the total fees (ignoring UNI bonus) to LPs per dollar went down.
This dynamic makes rebates complicated for AMMs. If fees/rebate increases by 50% and pool size doubles, but volumes are flat - the rebate per dollar goes down. Knowing this, new LPs will always be wary of deploying capital b/c their yield will vary. Therefore whenever there is a rebate increase, there has to be a push to also increase volumes, potentially through payment for order flow (PFOF) - but more on this later.
I think maybe we should pause this proposal and rethink about a new one
Sushiswap is chipping away at our liquidity once again. It will be much cheaper to do modest mining rewards for key pairs now rather than waiting until we need to do something drastic later. The business we are in is highly competitive and inflation rewards are just the reality of how we will have to defend the liquidity we have.
I'm okay losing ground on the WBTC-ETH pair because to be honest those LPs have very limited IL risk compared with the fiat pools, so giving them too much is a mistake. But the fiat/ETH pools are extremely important and those LPs face serious IL risks.
Even a modest mining program would demonstrate that the governance here isn't broken. Holding UNI should be a growth investment, and done in conjunction with providing liquidity. If you are just HODLing UNI market bought, never providing liquidity in other key pairs, and making your game plan that no new UNI is ever issued and you can just take that 0.05% that seems like the completely wrong approach. This early in the stage protocol inflation is necessary to capture and retain market share. You can provide liquidity in the incentivized pools to keep your UNI % of the network strong. But having zero UNI emissions will kill this protocol and make the 0.05% meaningless.
If you want buy backs and dividends and no growth just buy a cigarette stock like MO or PM.
Even a modest mining program would demonstrate that the governance here isn't broken. Holding UNI should be a growth investment, and done in conjunction with providing liquidity. If you are just HODLing UNI market bought, never providing liquidity in other key pairs, and making your game plan that no new UNI is ever issued and you can just take that 0.05% that seems like the completely wrong approach. This early in the stage protocol inflation is necessary to capture and retain market share. You can provide liquidity in the incentivized pools to keep your UNI % of the network strong. But having zero UNI emissions will kill this protocol and make the 0.05% meaningless.
If you want buy backs and dividends and no growth just buy a cigarette stock like MO or PM.
If UNI hodlers want an inflation shield we should subsidize an UNI/ETH pool. This is how every other farm does it. I know some at UNI like to think we are 'better' than 'degen' farms but ignoring the basic principle of subsidizing liquidity in the inflated coin is a massive mistake and is part of what is creating this rift in the community leading to zero emissions.
Can someone explain to me where we're at in this process? Personally I'm against adding liquidity incentives to the four main pairs but it's kinda crazy how slow this process has been. I'd rather see action that I disagree with than nothing at all. There are a few whales that control voting anyway right now so what's the hold up?
I don't think reinstating UNI rewards accomplishes anything significant enough to justify the massive inflation and devaluing of the UNI token.
I don't think reinstating UNI rewards accomplishes anything significant enough to justify the massive inflation and devaluing of the UNI token.
The damage these additional 5M/month UNI rewards causes is tremendous. I hope when it comes time to vote, there is a silent majority who comes out to vote AGAINST the continuing of UNI LP rewards.
Let's wait until liquidity hints at becoming a problem before throwing more UNI around in a way I'd consider wreckless.
In light of Uniswap’s liquidity mining program, here’s some research on how centralized exchanges incentivize liquidity. Granted CEXs tend to have central order limit books (CLOBs) rather than an AMM design, so the mapping isn’t perfect.
Here is the write-up, with the highlights below:
In light of Uniswap’s liquidity mining program, here’s some research on how centralized exchanges incentivize liquidity. Granted CEXs tend to have central order limit books (CLOBs) rather than an AMM design, so the mapping isn’t perfect.
Here is the write-up, with the highlights below:
In a simplified exchange model, they compete for liquidity - each one wants deeper order books and tighter spreads to get more volume. No one wants to trade on an exchange with lots of slippage. It turns out you can modify the fee model to incentivize particular behavior. Most exchanges today use a “maker-taker” model, where the taker of liquidity (market orders) pays the maker of liquidity (the limit order creator). Ex: taking a share off the exchange costs 0.3 cents and the trader who added that share gets 0.25 cents as cashback. This incentivizes traders to put a lot of limit orders on exchanges instead of market orders.
In a sense, Uniswap is the epitome of a maker-taker exchange as currently, all the 30 bps fee goes to the liquidity provider. This contrasts significantly with CLOB DEXs, who give meager < 2 bps rebates to market makers. We know that increasing rebates (via liquidity mining) will increase total liquidity, but the lower slippage did not lead to a meaningful increase in volume. Therefore the total fees (ignoring UNI bonus) to LPs per dollar went down.
This dynamic makes rebates complicated for AMMs. If fees/rebate increases by 50% and pool size doubles, but volumes are flat - the rebate per dollar goes down. Knowing this, new LPs will always be wary of deploying capital b/c their yield will vary. Therefore whenever there is a rebate increase, there has to be a push to also increase volumes, potentially through payment for order flow (PFOF) - but more on this later.
I think maybe we should pause this proposal and rethink about a new one
Sushiswap is chipping away at our liquidity once again. It will be much cheaper to do modest mining rewards for key pairs now rather than waiting until we need to do something drastic later. The business we are in is highly competitive and inflation rewards are just the reality of how we will have to defend the liquidity we have.
I think maybe we should pause this proposal and rethink about a new one
Thoughts?
Let's not waste our time on this unnecessary argument. Please push this proposal forward. This community really needs to see the governance on Uniswap can actually work.
Hey, when will the proposal be submitted since we already passed the temperature check.
I think maybe we should pause this proposal and rethink about a new one
Thoughts?
Let's not waste our time on this unnecessary argument. Please push this proposal forward. This community really needs to see the governance on Uniswap can actually work.
Hey, when will the proposal be submitted since we already passed the temperature check.
This just hurts UNI holders. Volume has stayed the same, so the pools are even more profitable now for liquidity stakers without taking incentivization into consideration. Incentivizing LPs dilutes supply. UNI should be used to either incentivize new tech, or get sent to UNI holders. If instead of rewarding liquidity providers you distribute UNI from treasure proportionally to UNI holders, then UNI holders maintain their current ratio (to overcome minting that will be sent to devs) and no riders get to leech off the protocol.
This just hurts UNI holders. Volume has stayed the same, so the pools are even more profitable now for liquidity stakers without taking incentivization into consideration. Incentivizing LPs dilutes supply. UNI should be used to either incentivize new tech, or get sent to UNI holders. If instead of rewarding liquidity providers you distribute UNI from treasure proportionally to UNI holders, then UNI holders maintain their current ratio (to overcome minting that will be sent to devs) and no riders get to leech off the protocol.
Regarding the argument that we need to distribute more UNI to reach quorum in governance, https://explore.duneanalytics.com/public/dashboards/vYaXFE9DynDqNNE0WE3k5iFQJ5mgTVq5aD1OF9Ji shows that there are almost 90M UNI delegated. I don't think the problem is circulating supply. I think the problem is finding a proposal the majority agrees on. So in this sense governance is functioning exactly as it should, rejecting proposals that a lot of people don't like.
Thank you Monet! I wanted to echo what I previously brought up on the community call; I think deep bitcoin liquidity is very important for Uniswap’s growth.
I believe that the DeFi summer, including Uniswap’s own liquidity incentive program combined with the current market conditions has created a very unique and valuable growth opportunity for Uniswap. This is an opportunity to attract new types of users in large numbers to the protocol and the greater DeFi ecosystem.
Thank you Monet! I wanted to echo what I previously brought up on the community call; I think deep bitcoin liquidity is very important for Uniswap’s growth.
I believe that the DeFi summer, including Uniswap’s own liquidity incentive program combined with the current market conditions has created a very unique and valuable growth opportunity for Uniswap. This is an opportunity to attract new types of users in large numbers to the protocol and the greater DeFi ecosystem.
The goal of most liquidity incentive programs is to attract new users by making the app more useful (or useful to more people). So far, the UNI program has been very successful at achieving this goal, evident by the amount of new capital that has flown into the space in the past two months.
My argument is that this window of opportunity to attract new users to Uniswap has only just opened and we’ve yet to see the delayed user acquisition response to the liquidity program. I sense a growing interest in Uniswap as a trading venue outside of the traditional DeFi demographic and this interest hasn’t yet fully translated to active users; infrastructural delay being only one reason.
Creating liquidity depth has an inherent causality dilemma that is most conveniently resolved by liquidity injection via incentives but, due to the tech barrier between Web 3.0 and the rest of the market, the effects won’t always immediately translate. It’s important to note that significant reduction in liquidity will certainly erode this momentum, thus governance should take action. It’s fallacious to assume that the current state will remain as status quo if no further action is taken.
If there were to be a sense of urgency in returning the incentive program then, the importance of not losing this growth momentum should certainly be a major consideration.
Our goal should be to grow Uniswap and we should be cognizant that growing outside the current DeFi user demographic will have an increasing reliance on bitcoin liquidity.
Exchange rebates (aka liquidity mining) are a great mechanism to increase market depth, which reduces slippage and drives more volume to Uniswap instead of competitors. Instead of looking to have xx% slippage for yy% of users, an alternative approach would be to maintain Uniswap's current market position. (Granted, this is a trailing indicator)
Observations from the 4 pools
Exchange rebates (aka liquidity mining) are a great mechanism to increase market depth, which reduces slippage and drives more volume to Uniswap instead of competitors. Instead of looking to have xx% slippage for yy% of users, an alternative approach would be to maintain Uniswap's current market position. (Granted, this is a trailing indicator)
Observations from the 4 pools
My suggestion is to reinstate exchange rebates for the ETH-WBTC pool. (This is under the assumption that the reason why volume is shifting away from Uniswap is due to decreased liquidity / increased slippage)
Hi all,
Thanks @monet-supply for putting together the call, was valuable to hear what others in the community are thinking and good to have a place to discuss outside of forums/discord.
Just wanted to post this here: https://twitter.com/tokenterminal/status/1331552128813461507
Think it quickly sums up the situation and makes a concise data-driven argument for NOT continuing liquidity incentives.
Final point here, this proposal is probably too far gone anyway(?) as most users will not vote against free money. But want to put a small thought experiment out there.
What if we used the 10M UNI ($32m at current writing) to:
Final point here, this proposal is probably too far gone anyway(?) as most users will not vote against free money. But want to put a small thought experiment out there.
What if we used the 10M UNI ($32m at current writing) to:
#1 this seems like an obvious homerun, think @mikedemarais floated this as well in the gov call. if we want to burn money, let's do it in a way that supports developers and the ecosystem (which obviously returns value as well)
#2 not suggesting that this is brilliant, but it does prove a point. We 1) provide liquidity, 2) the capital remains in the "treasury," and 3) shareholder dilution is basically the same as it would be under the current proposal (we should assume all the 10m UNI will be sold). It's not hundreds of millions, yes, but that liquidity would actually stay there until governance decides otherwise. Unlike under a liquidity incentives program.
Sure there's plenty of other great ideas for a spare $32,000,000.
Regarding the argument that we need to distribute more UNI to reach quorum in governance, https://explore.duneanalytics.com/public/dashboards/vYaXFE9DynDqNNE0WE3k5iFQJ5mgTVq5aD1OF9Ji shows that there are almost 90M UNI delegated. I don't think the problem is circulating supply. I think the problem is finding a proposal the majority agrees on. So in this sense governance is functioning exactly as it should, rejecting proposals that a lot of people don't like.
Thank you Monet! I wanted to echo what I previously brought up on the community call; I think deep bitcoin liquidity is very important for Uniswap’s growth.
I believe that the DeFi summer, including Uniswap’s own liquidity incentive program combined with the current market conditions has created a very unique and valuable growth opportunity for Uniswap. This is an opportunity to attract new types of users in large numbers to the protocol and the greater DeFi ecosystem.
Thank you Monet! I wanted to echo what I previously brought up on the community call; I think deep bitcoin liquidity is very important for Uniswap’s growth.
I believe that the DeFi summer, including Uniswap’s own liquidity incentive program combined with the current market conditions has created a very unique and valuable growth opportunity for Uniswap. This is an opportunity to attract new types of users in large numbers to the protocol and the greater DeFi ecosystem.
The goal of most liquidity incentive programs is to attract new users by making the app more useful (or useful to more people). So far, the UNI program has been very successful at achieving this goal, evident by the amount of new capital that has flown into the space in the past two months.
My argument is that this window of opportunity to attract new users to Uniswap has only just opened and we’ve yet to see the delayed user acquisition response to the liquidity program. I sense a growing interest in Uniswap as a trading venue outside of the traditional DeFi demographic and this interest hasn’t yet fully translated to active users; infrastructural delay being only one reason.
Creating liquidity depth has an inherent causality dilemma that is most conveniently resolved by liquidity injection via incentives but, due to the tech barrier between Web 3.0 and the rest of the market, the effects won’t always immediately translate. It’s important to note that significant reduction in liquidity will certainly erode this momentum, thus governance should take action. It’s fallacious to assume that the current state will remain as status quo if no further action is taken.
If there were to be a sense of urgency in returning the incentive program then, the importance of not losing this growth momentum should certainly be a major consideration.
Our goal should be to grow Uniswap and we should be cognizant that growing outside the current DeFi user demographic will have an increasing reliance on bitcoin liquidity.
Exchange rebates (aka liquidity mining) are a great mechanism to increase market depth, which reduces slippage and drives more volume to Uniswap instead of competitors. Instead of looking to have xx% slippage for yy% of users, an alternative approach would be to maintain Uniswap's current market position. (Granted, this is a trailing indicator)
Observations from the 4 pools
Exchange rebates (aka liquidity mining) are a great mechanism to increase market depth, which reduces slippage and drives more volume to Uniswap instead of competitors. Instead of looking to have xx% slippage for yy% of users, an alternative approach would be to maintain Uniswap's current market position. (Granted, this is a trailing indicator)
Observations from the 4 pools
My suggestion is to reinstate exchange rebates for the ETH-WBTC pool. (This is under the assumption that the reason why volume is shifting away from Uniswap is due to decreased liquidity / increased slippage)
Hi all,
Thanks @monet-supply for putting together the call, was valuable to hear what others in the community are thinking and good to have a place to discuss outside of forums/discord.
Just wanted to post this here: https://twitter.com/tokenterminal/status/1331552128813461507
Think it quickly sums up the situation and makes a concise data-driven argument for NOT continuing liquidity incentives.
Final point here, this proposal is probably too far gone anyway(?) as most users will not vote against free money. But want to put a small thought experiment out there.
What if we used the 10M UNI ($32m at current writing) to:
Final point here, this proposal is probably too far gone anyway(?) as most users will not vote against free money. But want to put a small thought experiment out there.
What if we used the 10M UNI ($32m at current writing) to:
#1 this seems like an obvious homerun, think @mikedemarais floated this as well in the gov call. if we want to burn money, let's do it in a way that supports developers and the ecosystem (which obviously returns value as well)
#2 not suggesting that this is brilliant, but it does prove a point. We 1) provide liquidity, 2) the capital remains in the "treasury," and 3) shareholder dilution is basically the same as it would be under the current proposal (we should assume all the 10m UNI will be sold). It's not hundreds of millions, yes, but that liquidity would actually stay there until governance decides otherwise. Unlike under a liquidity incentives program.
Sure there's plenty of other great ideas for a spare $32,000,000.
There is a combined $650M in liquidity for the 4 pairs we are signaling to incentivize. The original liquidity incentives created liquidity far beyond what was needed. Those pairs have sufficient liquidity without incentives. Why create significant inflation, devaluing UNI, to achieve a goal that we are already achieving?
I understand we would be cutting those rewards in half, but it still seems unnecessary.
Disagree with continuing the distribution. Spending another 10 million UNI (=$40 million) from the treasury should be done with more supporting data, strategically, and with an eye towards long-term growth.
Consider how much money that is, and what it could potentially be used for to create sustainable NFX around Uniswap. The due diligence a regular company of Uniswap's valuation would do before spending $40 million in stock options is on a complete different level from what is happening here. This should give people pause.
Disagree with continuing the distribution. Spending another 10 million UNI (=$40 million) from the treasury should be done with more supporting data, strategically, and with an eye towards long-term growth.
Consider how much money that is, and what it could potentially be used for to create sustainable NFX around Uniswap. The due diligence a regular company of Uniswap's valuation would do before spending $40 million in stock options is on a complete different level from what is happening here. This should give people pause.
The first important issue is that liquidity mining does not create a sustainable NFX for protocols. This is shown by how liquidity immediately migrates away immediately when the incentives end. Playing an endless game of distributing tokens and fighting with competitors that way, is fundamentally a losing proposition.
Liquidity mining seems to have zero effect on creating a DEX people will want to use. If you take a look at Uniswap's market share among DEXs, it has not taken a hit since the liquidity mining ended.
Second, it's likely that the incentive should be distributed more uniformly across many pairs. We should try to pick out pools based on the demand, and have data that supports that in what pairs traders are experiencing slippage. This is roughly approximated by the following chart.
There's no reason to anchor ourselves to these 4 pairs.
Overall, the Uniswap treasury should be spent with tremendous care. This is a multi-decade race, and we don't want to use all our ammo in the 1st inning (to draw liquidity that immediately leaves without those incentives).
There are too many tokens hovering around, this makes the whales to control the price movement,. Buy back few % of total circulation is important, with the fees generated.
Additionally, wanted to address the notion of "decentralization via distribution" @monet-supply.
I think this makes sense, but regardless of how much you agree with the desired goal, I think this would favor slowing down the distribution too.
Additionally, wanted to address the notion of "decentralization via distribution" @monet-supply.
I think this makes sense, but regardless of how much you agree with the desired goal, I think this would favor slowing down the distribution too.
Right now, it's a small group of DeFi users, but it's likely that in 1-2 years we will see massive inflows of more (to a degree) of mainstream users. We want to have tokens to distribute then, and that distribution will make the protocol far more decentralized than any distribution today (to a small user base).
When does the Consensus Check begin?
You do not need to do anything, as an LP, you were collecting fees during the UNI reward program and you will continue to do so as long as your an LP.
There is a combined $650M in liquidity for the 4 pairs we are signaling to incentivize. The original liquidity incentives created liquidity far beyond what was needed. Those pairs have sufficient liquidity without incentives. Why create significant inflation, devaluing UNI, to achieve a goal that we are already achieving?
I understand we would be cutting those rewards in half, but it still seems unnecessary.
Disagree with continuing the distribution. Spending another 10 million UNI (=$40 million) from the treasury should be done with more supporting data, strategically, and with an eye towards long-term growth.
Consider how much money that is, and what it could potentially be used for to create sustainable NFX around Uniswap. The due diligence a regular company of Uniswap's valuation would do before spending $40 million in stock options is on a complete different level from what is happening here. This should give people pause.
Disagree with continuing the distribution. Spending another 10 million UNI (=$40 million) from the treasury should be done with more supporting data, strategically, and with an eye towards long-term growth.
Consider how much money that is, and what it could potentially be used for to create sustainable NFX around Uniswap. The due diligence a regular company of Uniswap's valuation would do before spending $40 million in stock options is on a complete different level from what is happening here. This should give people pause.
The first important issue is that liquidity mining does not create a sustainable NFX for protocols. This is shown by how liquidity immediately migrates away immediately when the incentives end. Playing an endless game of distributing tokens and fighting with competitors that way, is fundamentally a losing proposition.
Liquidity mining seems to have zero effect on creating a DEX people will want to use. If you take a look at Uniswap's market share among DEXs, it has not taken a hit since the liquidity mining ended.
Second, it's likely that the incentive should be distributed more uniformly across many pairs. We should try to pick out pools based on the demand, and have data that supports that in what pairs traders are experiencing slippage. This is roughly approximated by the following chart.
There's no reason to anchor ourselves to these 4 pairs.
Overall, the Uniswap treasury should be spent with tremendous care. This is a multi-decade race, and we don't want to use all our ammo in the 1st inning (to draw liquidity that immediately leaves without those incentives).
There are too many tokens hovering around, this makes the whales to control the price movement,. Buy back few % of total circulation is important, with the fees generated.
Additionally, wanted to address the notion of "decentralization via distribution" @monet-supply.
I think this makes sense, but regardless of how much you agree with the desired goal, I think this would favor slowing down the distribution too.
Additionally, wanted to address the notion of "decentralization via distribution" @monet-supply.
I think this makes sense, but regardless of how much you agree with the desired goal, I think this would favor slowing down the distribution too.
Right now, it's a small group of DeFi users, but it's likely that in 1-2 years we will see massive inflows of more (to a degree) of mainstream users. We want to have tokens to distribute then, and that distribution will make the protocol far more decentralized than any distribution today (to a small user base).
When does the Consensus Check begin?
You do not need to do anything, as an LP, you were collecting fees during the UNI reward program and you will continue to do so as long as your an LP.
Just no need of new tokens as it will only get dumped. Just spread the fees to LPs
tBTC might be the better option than wBTC, but I think we should focus on the incentivized liquidity subject matter first, put too much discussion on the mix and this quorum will be even harder to reach.
Just no need of new tokens as it will only get dumped. Just spread the fees to LPs
tBTC might be the better option than wBTC, but I think we should focus on the incentivized liquidity subject matter first, put too much discussion on the mix and this quorum will be even harder to reach.
As a small LP, I don't really want to move my liquidity around all the time(gas fees)
Is there a technical reason that regular LP pool fees(from the 0.3 fee on all transactions) aren't resumed on my liquidity when the UNI rewards end?
As a small LP, I don't really want to move my liquidity around all the time(gas fees)
Is there a technical reason that regular LP pool fees(from the 0.3 fee on all transactions) aren't resumed on my liquidity when the UNI rewards end?
I'd love to just leave my liquidity on Uniswap permanently, collect UNI when they're being given out, but then automatically collect regular fees when they're not. As it stands right now I would have to move it manually, which on my scale makes it essentially cost prohibitive.
I'm fairly new to this but am I missing something?
Favoring WBTC makes a lot of sense to me. To reiterate what this change suggests:
Over a longer-time frame this breaks down to roughly:
I am in favor of this distribution!
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The simplest, most equitable criteria for liquidity incentives is that the same amount of money is paid per $1M of liquidity in each rewarded pool. There are a number of ways to measure this, whether it be via the relative amounts of slippage or impermanent loss or strictly by the amount of UNI paid out in dollar terms for liquidity. The latter term is more intuitive and will be easier to consider for a heuristic Snapshot vote, while the former is more accurate but requires more data processing and cleaning. For this vote, I suggest we use the latter and do the following:
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The simplest, most equitable criteria for liquidity incentives is that the same amount of money is paid per $1M of liquidity in each rewarded pool. There are a number of ways to measure this, whether it be via the relative amounts of slippage or impermanent loss or strictly by the amount of UNI paid out in dollar terms for liquidity. The latter term is more intuitive and will be easier to consider for a heuristic Snapshot vote, while the former is more accurate but requires more data processing and cleaning. For this vote, I suggest we use the latter and do the following:
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Thanks for sharing here @Mr_Po - this is the first I had seen the survey and it definitely shines some light on where forum participants minds are at.
https://gov.uniswap.org/t/survey-liquidity-mining-program-continuation-and-restructuring/6573
I especially found this line to be interesting.
Thanks for sharing here @Mr_Po - this is the first I had seen the survey and it definitely shines some light on where forum participants minds are at.
https://gov.uniswap.org/t/survey-liquidity-mining-program-continuation-and-restructuring/6573
I especially found this line to be interesting.
Still, seeing as the other three pools are all stablecoins, you could almost view the rewards as BTC & stablecoins, rather than WBTC, DAI, USDC and USDT.
I personally don't feel too strongly about how the rewards are distributed among these pools, so long as we can agree to only include (at most) these four pools for the next chapter as we consider other pools and incentive structures.
Stop the incentives. Let's come up with alternatives ways to incentivize liquidity.
As a small LP, I don't really want to move my liquidity around all the time(gas fees)
Is there a technical reason that regular LP pool fees(from the 0.3 fee on all transactions) aren't resumed on my liquidity when the UNI rewards end?
As a small LP, I don't really want to move my liquidity around all the time(gas fees)
Is there a technical reason that regular LP pool fees(from the 0.3 fee on all transactions) aren't resumed on my liquidity when the UNI rewards end?
I'd love to just leave my liquidity on Uniswap permanently, collect UNI when they're being given out, but then automatically collect regular fees when they're not. As it stands right now I would have to move it manually, which on my scale makes it essentially cost prohibitive.
I'm fairly new to this but am I missing something?
Favoring WBTC makes a lot of sense to me. To reiterate what this change suggests:
Over a longer-time frame this breaks down to roughly:
I am in favor of this distribution!
-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA256
The simplest, most equitable criteria for liquidity incentives is that the same amount of money is paid per $1M of liquidity in each rewarded pool. There are a number of ways to measure this, whether it be via the relative amounts of slippage or impermanent loss or strictly by the amount of UNI paid out in dollar terms for liquidity. The latter term is more intuitive and will be easier to consider for a heuristic Snapshot vote, while the former is more accurate but requires more data processing and cleaning. For this vote, I suggest we use the latter and do the following:
-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA256
The simplest, most equitable criteria for liquidity incentives is that the same amount of money is paid per $1M of liquidity in each rewarded pool. There are a number of ways to measure this, whether it be via the relative amounts of slippage or impermanent loss or strictly by the amount of UNI paid out in dollar terms for liquidity. The latter term is more intuitive and will be easier to consider for a heuristic Snapshot vote, while the former is more accurate but requires more data processing and cleaning. For this vote, I suggest we use the latter and do the following:
iQIzBAEBCAAdFiEEEJAuhmVduSEVN8uPKIPJySxksQ8FAl+5cvkACgkQKIPJySxk
sQ9UthAAmWYTMONKAdmmMQ34PzNbjbAvdzysM7suMkbkg0cv5RS6n4ICaVoeU8Sq
N5+FYWr05aR3Odp3JS+VrGptnKZsnupx+89+7nCOuvKNjREq4thV38gilnK6izXz
SNVDnqccTqiCACI2IQOnjW+b6JhblYZa6f+JoFjr6s5ml/4GiAS8rZ9yDyMiN9jh
neBBPYizTdk5u60/LTT+g1h2lELw5BMe6T4ohYz39i92lu67MXru+ul91FXjG3ji
/cr7raDdTi5C/IO56AdT9JANBWLzjEoQ/E1UR4NKPg4OJ7UJwOviN0Z+MZOfiKN/
6S5svBPmznBRhV34vqrTpHCVaFqhP9Br6+/H9ZFiZWbMGFORf8D26bUxLlHxCqXa
wO5jP2ThWVXzSOMKxZUSrPrJbQWE82djSLGQ2+Lsn/Iwbp6mpx2qK6T37IATIfyE
JdiSs4Ppwhp7H4xpBQoawQztMhP3eTUY68jkGC58zX1csCWzF1n2lsnRRnk4mLo5
/DpqWoMrxjJrt46ARzTOrsDsGx2tSEomWf8Nsci7btEpZDT5KwIufA+v+O+7+FMR
/hNvFLVm+Mpe2FbLnpY6zcgXXhhjRrS5Gba5oxTe25cndNU3J3dNKcMuZVbf3I1G
cO6KDblXQwyheWm6tY3gds6OG7RtCBFsnkiC62LedPdKWULSDgU=
=axi/
-----END PGP SIGNATURE-----
Thanks for sharing here @Mr_Po - this is the first I had seen the survey and it definitely shines some light on where forum participants minds are at.
https://gov.uniswap.org/t/survey-liquidity-mining-program-continuation-and-restructuring/6573
I especially found this line to be interesting.
Thanks for sharing here @Mr_Po - this is the first I had seen the survey and it definitely shines some light on where forum participants minds are at.
https://gov.uniswap.org/t/survey-liquidity-mining-program-continuation-and-restructuring/6573
I especially found this line to be interesting.
Still, seeing as the other three pools are all stablecoins, you could almost view the rewards as BTC & stablecoins, rather than WBTC, DAI, USDC and USDT.
I personally don't feel too strongly about how the rewards are distributed among these pools, so long as we can agree to only include (at most) these four pools for the next chapter as we consider other pools and incentive structures.
Stop the incentives. Let's come up with alternatives ways to incentivize liquidity.
so i'm guessing that even though I deposited the liquidity, and have now withdrawn it, that because I did not stake at the time, I cannot now claim the UNI, is that right?
Help me out, I was a member of the ETH/DAI pool for over a month, and did not receive any UNI. why was that?
If the community decides that pools still need additional incentives, I like the idea that was mentioned not needing 3 redundant pools for stable coins. Someone mentioned mUSD being unappealing as a forced exposure to USDT. What if USDT Uni staking wasn't included and shifted to the other pools. A dollar is a dollar at the end of the day and the only difference between them is risk and compatibility. The USDT pool is already pretty large, why not promote others that have more universal trust instead?
I agree, we’ll gain useful data from the ending of the liquidity incentive program - how much money stays in the pools, what are the unsubsidized fee returns, how much will slippage increase, etc. But, it may take governance a while to process this information and agree on the ideal incentive program. This proposal is meant to be a stop-gap which will keep Uniswap humming and support the user experience while governance builds consensus on a long term solution.
I agree, we’ll gain useful data from the ending of the liquidity incentive program - how much money stays in the pools, what are the unsubsidized fee returns, how much will slippage increase, etc. But, it may take governance a while to process this information and agree on the ideal incentive program. This proposal is meant to be a stop-gap which will keep Uniswap humming and support the user experience while governance builds consensus on a long term solution.
Has Uniswap actually stopped humming without the UNI subsidies for the past few days? Is there really harm to the user experience from a $10,000 swap on ETH/USDT having 0.01% slippage instead of 0.004%?
I don't think it makes any sense to incentive a pair like mUSD/ETH as it doesn't generate any volume. If I have to chose a single stablecoin pool that will be DAI/ETH as it generates the most volume from all at the moment. I think DAI/ETH and WBTC/ETH pairs make perfect sense to be incentivized as they are generating large volume and seem to be important for the overall DeFi ecosystem.
Awesome ! I just created a temperature check. Here is the governance post: https://gov.uniswap.org/t/should-we-keep-only-1-incentivized-stablecoin-pair/8760 Here is the snapshot page: https://snapshot.page/#/uniswap/proposal/QmTdDJm7d81TTuHZ1ro7E6LCrFroT74gqdQn2ccc7c7uBU
To summarize a lot of what has been said previously...
There is a perceived need for UNI subsidies (LP rewarded with UNI) to stop a very real hemorrhage of the total value locked in Uniswap (from DEFI Pulse). This stated need has been resisted by some who hold the view that TVL is not as important as the volume of trades taking place on unicorn swapperino. There has been no data presented (in this forum post) about how trading volume has reacted to the lack of incentives in the liquidity pools; I think because it doesn't exist at the moment/ people are waiting for gauntlet's data, which according to @allo will show if it's worth keeping/reducing incentives.
To summarize a lot of what has been said previously...
There is a perceived need for UNI subsidies (LP rewarded with UNI) to stop a very real hemorrhage of the total value locked in Uniswap (from DEFI Pulse). This stated need has been resisted by some who hold the view that TVL is not as important as the volume of trades taking place on unicorn swapperino. There has been no data presented (in this forum post) about how trading volume has reacted to the lack of incentives in the liquidity pools; I think because it doesn't exist at the moment/ people are waiting for gauntlet's data, which according to @allo will show if it's worth keeping/reducing incentives.
Some people have also brought up the separate issue that the UNI in liquidity pools would have to be removed from those pools in order to vote on these proposals. Please direct some of your attention to that: https://gov.uniswap.org/t/allow-uni-tokens-locked-in-pools-to-vote/5559/11. To me this problem seems like one to solve quickly whether one supports this proposal about the LP rewards/incentives or not.
To draw a conclusion: I hope that the gauntlet data provides clarity on whether LP rewards are necessary to sustain UNI as a DEX, and I feel as though the TVL drop is not more than an indication of a potential problem, the potential problem being a potential semipermanent drop in trading volume. Additionally, while we wait for November 23rd to roll around please direct attention to the above link. To me, it seems like a complete failure of our decentralized democratic governance system that needs to be addressed.
P.S. It should be known that I'm new to DeFi and could be completely wrong in every way :upside_down_face:. I have done my best to do my due diligence and research. If you think I've overlooked something please do me the favor of responding or at the least messaging me.
Hi there,
I'm from the mStable team and we would love to see this happen for mUSD. I want to add that once our new AMM goes live, it will support even more underlying stablecoins, making the value proposition even stronger I would hope :muscle:
Thanks @Etienne1 for the shoutout and your clear headed analysis
This honestly seems like the way forward (this specific point was discussed on the community call last week). There's no real reason why we need 3 stable coin pools that are incentivised. The two proposed pools I think are hard to argue against:
While I can understand the sentiment about incentivizing a 'Pool2' for UNI (aka UNI/ETH, UNI/USDC), the only token this benefit is UNI.
If we're concerned about bad actors gaming the system to their advantage, using incentivized UNI pools will only make this 10x worse.
While I can understand the sentiment about incentivizing a 'Pool2' for UNI (aka UNI/ETH, UNI/USDC), the only token this benefit is UNI.
If we're concerned about bad actors gaming the system to their advantage, using incentivized UNI pools will only make this 10x worse.
To further iterate my thoughts here, this more about maintaining an ongoing distribution of UNI, giving the community more tokens to work with and a more accurate market valuation. Assuming governance is going to scale and evolve, its important for the supply to be democratized for effective governance.
I'd also like to emphasize that I'm well aware of strategies farming UNI to dump, and would view this next phase as a bridge to find a stronger program around rewards that may include vesting, whitelists or something in between.
For those commenting here, please make sure to make your voice heard here!
so i'm guessing that even though I deposited the liquidity, and have now withdrawn it, that because I did not stake at the time, I cannot now claim the UNI, is that right?
Help me out, I was a member of the ETH/DAI pool for over a month, and did not receive any UNI. why was that?
If the community decides that pools still need additional incentives, I like the idea that was mentioned not needing 3 redundant pools for stable coins. Someone mentioned mUSD being unappealing as a forced exposure to USDT. What if USDT Uni staking wasn't included and shifted to the other pools. A dollar is a dollar at the end of the day and the only difference between them is risk and compatibility. The USDT pool is already pretty large, why not promote others that have more universal trust instead?
I agree, we’ll gain useful data from the ending of the liquidity incentive program - how much money stays in the pools, what are the unsubsidized fee returns, how much will slippage increase, etc. But, it may take governance a while to process this information and agree on the ideal incentive program. This proposal is meant to be a stop-gap which will keep Uniswap humming and support the user experience while governance builds consensus on a long term solution.
I agree, we’ll gain useful data from the ending of the liquidity incentive program - how much money stays in the pools, what are the unsubsidized fee returns, how much will slippage increase, etc. But, it may take governance a while to process this information and agree on the ideal incentive program. This proposal is meant to be a stop-gap which will keep Uniswap humming and support the user experience while governance builds consensus on a long term solution.
Has Uniswap actually stopped humming without the UNI subsidies for the past few days? Is there really harm to the user experience from a $10,000 swap on ETH/USDT having 0.01% slippage instead of 0.004%?
I don't think it makes any sense to incentive a pair like mUSD/ETH as it doesn't generate any volume. If I have to chose a single stablecoin pool that will be DAI/ETH as it generates the most volume from all at the moment. I think DAI/ETH and WBTC/ETH pairs make perfect sense to be incentivized as they are generating large volume and seem to be important for the overall DeFi ecosystem.
Awesome ! I just created a temperature check. Here is the governance post: https://gov.uniswap.org/t/should-we-keep-only-1-incentivized-stablecoin-pair/8760 Here is the snapshot page: https://snapshot.page/#/uniswap/proposal/QmTdDJm7d81TTuHZ1ro7E6LCrFroT74gqdQn2ccc7c7uBU
To summarize a lot of what has been said previously...
There is a perceived need for UNI subsidies (LP rewarded with UNI) to stop a very real hemorrhage of the total value locked in Uniswap (from DEFI Pulse). This stated need has been resisted by some who hold the view that TVL is not as important as the volume of trades taking place on unicorn swapperino. There has been no data presented (in this forum post) about how trading volume has reacted to the lack of incentives in the liquidity pools; I think because it doesn't exist at the moment/ people are waiting for gauntlet's data, which according to @allo will show if it's worth keeping/reducing incentives.
To summarize a lot of what has been said previously...
There is a perceived need for UNI subsidies (LP rewarded with UNI) to stop a very real hemorrhage of the total value locked in Uniswap (from DEFI Pulse). This stated need has been resisted by some who hold the view that TVL is not as important as the volume of trades taking place on unicorn swapperino. There has been no data presented (in this forum post) about how trading volume has reacted to the lack of incentives in the liquidity pools; I think because it doesn't exist at the moment/ people are waiting for gauntlet's data, which according to @allo will show if it's worth keeping/reducing incentives.
Some people have also brought up the separate issue that the UNI in liquidity pools would have to be removed from those pools in order to vote on these proposals. Please direct some of your attention to that: https://gov.uniswap.org/t/allow-uni-tokens-locked-in-pools-to-vote/5559/11. To me this problem seems like one to solve quickly whether one supports this proposal about the LP rewards/incentives or not.
To draw a conclusion: I hope that the gauntlet data provides clarity on whether LP rewards are necessary to sustain UNI as a DEX, and I feel as though the TVL drop is not more than an indication of a potential problem, the potential problem being a potential semipermanent drop in trading volume. Additionally, while we wait for November 23rd to roll around please direct attention to the above link. To me, it seems like a complete failure of our decentralized democratic governance system that needs to be addressed.
P.S. It should be known that I'm new to DeFi and could be completely wrong in every way :upside_down_face:. I have done my best to do my due diligence and research. If you think I've overlooked something please do me the favor of responding or at the least messaging me.
Hi there,
I'm from the mStable team and we would love to see this happen for mUSD. I want to add that once our new AMM goes live, it will support even more underlying stablecoins, making the value proposition even stronger I would hope :muscle:
Thanks @Etienne1 for the shoutout and your clear headed analysis
This honestly seems like the way forward (this specific point was discussed on the community call last week). There's no real reason why we need 3 stable coin pools that are incentivised. The two proposed pools I think are hard to argue against:
While I can understand the sentiment about incentivizing a 'Pool2' for UNI (aka UNI/ETH, UNI/USDC), the only token this benefit is UNI.
If we're concerned about bad actors gaming the system to their advantage, using incentivized UNI pools will only make this 10x worse.
While I can understand the sentiment about incentivizing a 'Pool2' for UNI (aka UNI/ETH, UNI/USDC), the only token this benefit is UNI.
If we're concerned about bad actors gaming the system to their advantage, using incentivized UNI pools will only make this 10x worse.
To further iterate my thoughts here, this more about maintaining an ongoing distribution of UNI, giving the community more tokens to work with and a more accurate market valuation. Assuming governance is going to scale and evolve, its important for the supply to be democratized for effective governance.
I'd also like to emphasize that I'm well aware of strategies farming UNI to dump, and would view this next phase as a bridge to find a stronger program around rewards that may include vesting, whitelists or something in between.
For those commenting here, please make sure to make your voice heard here!
I like it. Create a temp check for this idea.
I don't think creating another liquidity pool UNI distribution program would have long term benefit to the protocol. Keeping LPs that are only looking for distribution of UNI in the protocol to stay in would not benefit the protocol.
I think the better way is to use the funds to advertising, teaching, paying for supporting users, fund development of new protocol built on top of uniswap, in order to increase the trading volume in uniswap which, first, create a higher trading fees in any pools that create an incentive for LPs to provide more liquidity which can lead back to decreasing the slippage. Second, it create a long term sustainable solution and not a solution that UNI holders pay for 2 month and then the liquidity drops and we have to pay for another 2 month.
I don't think creating another liquidity pool UNI distribution program would have long term benefit to the protocol. Keeping LPs that are only looking for distribution of UNI in the protocol to stay in would not benefit the protocol.
I think the better way is to use the funds to advertising, teaching, paying for supporting users, fund development of new protocol built on top of uniswap, in order to increase the trading volume in uniswap which, first, create a higher trading fees in any pools that create an incentive for LPs to provide more liquidity which can lead back to decreasing the slippage. Second, it create a long term sustainable solution and not a solution that UNI holders pay for 2 month and then the liquidity drops and we have to pay for another 2 month.
When UNI token is distributed initially there is 251,534 user addresses, now I believe there is more due to the initial launch also advertise the protocol. I think this is the main reason for the increase in volume is the increase in users.
Subsidizing UNI/ETH is a ponzinomics technique. It is something that degenerate farms are using to build liquidity for their shitcoins. UNI does not need such a thing, as it has enough liquidity for the token. The pools that are subsidized should be the pools that are getting a lot of trading fees, as these are the pools, which bring the most revenue.
First of all, thanks a lot for your proposal. It's clearly going in the right direction.
I think that we could do even better, by incentivizing only 2 pools instead of 4, thus increasing the overall liquidity of the ecosystem.
What you propose:
- WBTC/ETH - 1.25M UNI/month
- USDC/ETH - 1.25M UNI/month
- USDT/ETH - 1.25M UNI/month
- DAI/ETH - 1.25M UNI/month
What I propose:
First of all, thanks a lot for your proposal. It's clearly going in the right direction.
I think that we could do even better, by incentivizing only 2 pools instead of 4, thus increasing the overall liquidity of the ecosystem.
What you propose:
- WBTC/ETH - 1.25M UNI/month
- USDC/ETH - 1.25M UNI/month
- USDT/ETH - 1.25M UNI/month
- DAI/ETH - 1.25M UNI/month
What I propose:
- WBTC/ETH - 2.5M UNI/month
- mUSD/ETH - 2.5M UNI/month
What is mUSD ?
mUSD is backed by a basket of whitelisted stablecoins (USDC, TUSD,...). You can redeem at any time the constituents of the basket. You can also leverage the swap feature between any stablecoin of the basket to provide end users with 0 slippage between USDC and TUSD, for instance.
What are the benefits?
Long life to Uniswap :wink:
I support a second round of liquidity mining with 5M UNI during the pool period.
@Ezzy Id have to agree. Maybe rewarding smaller lp's to hold would be more beneficial. I.e. 10% rewards for 100 uni provided. 12% rewards for anything above 100. My only concern is whales providing liquidity in 100 uni increments.
I believe this plan is very good, has maintained liquidity, bought time for the development of uniswap 3.0, and I hope to see the community growth.
Probably a dumb question but if I use my uni to vote , I don’t get it back right ?
Why you don't look for UNI/USDC, UNI/ETH UNI/... etc! See the comment from drwx !!! FUND this pools UNI/ and the TVL will increase and the value of protocol / token value will increase! More users will use the protocol.
This is definitely not all the data we should be looking at. The volume is also important. If the liquidity drops 2x, but the volume stays the same, there will be much higher yield from fees for the LPs and that could cause the liquidity to come back.
I think we need 1-2 weeks of data to see how is this going to unfold.
This is definitely not all the data we should be looking at. The volume is also important. If the liquidity drops 2x, but the volume stays the same, there will be much higher yield from fees for the LPs and that could cause the liquidity to come back.
I think we need 1-2 weeks of data to see how is this going to unfold.
But, there is something important we need to keep in mind here: it is good for the UNI distribution to continue, because we need more UNI out there, which could be used for voting. As we see at the moment quorums can't be reached and no proposal has even been passed. As amount of circulating UNI increases, it should be easier to reach quorum.
Edit: spelling
good point... why this / to fund UNI pools (UNI/USDC, UNI/ETH etc) to motivate liquidity providers to actually hold and add more UNIs to pools / is not bring up to discussion? or to vote?
What is the point to bribe liquidity providers for yet another 2 months? There are few proven bad actors like Alameda Research who were shorting and market dumping UNI, these whales are moving billions of dollars in a matter of few transactions from Uniswap to Sushiswap and back.
The additional 2 months won't solve anything, this program doesn't permanently solve the liquidity problem, but only helps whales to manipulate and short the market.
What is the point to bribe liquidity providers for yet another 2 months? There are few proven bad actors like Alameda Research who were shorting and market dumping UNI, these whales are moving billions of dollars in a matter of few transactions from Uniswap to Sushiswap and back.
The additional 2 months won't solve anything, this program doesn't permanently solve the liquidity problem, but only helps whales to manipulate and short the market.
Instead, as already discussed in various topics in this forum, I think it's better to fund UNI pools (UNI/USDC, UNI/ETH etc) to motivate liquidity providers to actually hold and add more UNIs to pools, this will also help for distribution because traders will be able to buy UNI with a lower slippage.
For those having issues voting on Snapshot, please note that only self-delegated UNI is eligible.
If you have not done so already please visit the Voting tab to Unlock Voting on behalf of your UNI!
Glad to see someone taking the initiative! @monet-supply I know you may have had some doubts in bringing a proposal to the table yourself at the time of the community call, so I really welcome your decision to take the time to build such a comprehensive initial thread.
For anyone who hasn't listened to the recording of the first unofficial community call, I strongly recommend you to do that before coming to a decision on whether or not this is a good thing for the protocol.
Glad to see someone taking the initiative! @monet-supply I know you may have had some doubts in bringing a proposal to the table yourself at the time of the community call, so I really welcome your decision to take the time to build such a comprehensive initial thread.
For anyone who hasn't listened to the recording of the first unofficial community call, I strongly recommend you to do that before coming to a decision on whether or not this is a good thing for the protocol.
As mentioned in the call, some of the most important factors to the health and continued adoption of Uniswap is the reduction of slippage and the ease of use as far as Uniswap acting as an on-ramp/off-ramp between stablecoins and other tokens - these are good goals to have at this time.
Whilst I agree that the liquidity mining program cannot continue indefinitely, I feel that in the absence of another proposal for developer grants or other programs that add value to Uniswap, continuation of the program for the time being in order to achieve the above goals is a good idea.
I have a couple of questions:
First, I'd like to echo Chris' sentiment - what was reasoning used when making the decision to cut the rewards in half?
Second, was any thought given to the idea of reducing the number of incentivized pools? A couple of people raised the idea of dropping down to a single stablecoin-ETH pool along with maintaining the wBTC-ETH pool for the time being during the call, and I'm wondering what your thoughts were on this. If its indeed seen to be that the rate of distribution through this program is too high to be sustainable, could this be a reasonable alternative to cutting the per-pool rate in half?
Thanks again for taking the time to build such a comprehensive offering to the community!
I like it. Create a temp check for this idea.
I don't think creating another liquidity pool UNI distribution program would have long term benefit to the protocol. Keeping LPs that are only looking for distribution of UNI in the protocol to stay in would not benefit the protocol.
I think the better way is to use the funds to advertising, teaching, paying for supporting users, fund development of new protocol built on top of uniswap, in order to increase the trading volume in uniswap which, first, create a higher trading fees in any pools that create an incentive for LPs to provide more liquidity which can lead back to decreasing the slippage. Second, it create a long term sustainable solution and not a solution that UNI holders pay for 2 month and then the liquidity drops and we have to pay for another 2 month.
I don't think creating another liquidity pool UNI distribution program would have long term benefit to the protocol. Keeping LPs that are only looking for distribution of UNI in the protocol to stay in would not benefit the protocol.
I think the better way is to use the funds to advertising, teaching, paying for supporting users, fund development of new protocol built on top of uniswap, in order to increase the trading volume in uniswap which, first, create a higher trading fees in any pools that create an incentive for LPs to provide more liquidity which can lead back to decreasing the slippage. Second, it create a long term sustainable solution and not a solution that UNI holders pay for 2 month and then the liquidity drops and we have to pay for another 2 month.
When UNI token is distributed initially there is 251,534 user addresses, now I believe there is more due to the initial launch also advertise the protocol. I think this is the main reason for the increase in volume is the increase in users.
Subsidizing UNI/ETH is a ponzinomics technique. It is something that degenerate farms are using to build liquidity for their shitcoins. UNI does not need such a thing, as it has enough liquidity for the token. The pools that are subsidized should be the pools that are getting a lot of trading fees, as these are the pools, which bring the most revenue.
First of all, thanks a lot for your proposal. It's clearly going in the right direction.
I think that we could do even better, by incentivizing only 2 pools instead of 4, thus increasing the overall liquidity of the ecosystem.
What you propose:
- WBTC/ETH - 1.25M UNI/month
- USDC/ETH - 1.25M UNI/month
- USDT/ETH - 1.25M UNI/month
- DAI/ETH - 1.25M UNI/month
What I propose:
First of all, thanks a lot for your proposal. It's clearly going in the right direction.
I think that we could do even better, by incentivizing only 2 pools instead of 4, thus increasing the overall liquidity of the ecosystem.
What you propose:
- WBTC/ETH - 1.25M UNI/month
- USDC/ETH - 1.25M UNI/month
- USDT/ETH - 1.25M UNI/month
- DAI/ETH - 1.25M UNI/month
What I propose:
- WBTC/ETH - 2.5M UNI/month
- mUSD/ETH - 2.5M UNI/month
What is mUSD ?
mUSD is backed by a basket of whitelisted stablecoins (USDC, TUSD,...). You can redeem at any time the constituents of the basket. You can also leverage the swap feature between any stablecoin of the basket to provide end users with 0 slippage between USDC and TUSD, for instance.
What are the benefits?
Long life to Uniswap :wink:
I support a second round of liquidity mining with 5M UNI during the pool period.
@Ezzy Id have to agree. Maybe rewarding smaller lp's to hold would be more beneficial. I.e. 10% rewards for 100 uni provided. 12% rewards for anything above 100. My only concern is whales providing liquidity in 100 uni increments.
I believe this plan is very good, has maintained liquidity, bought time for the development of uniswap 3.0, and I hope to see the community growth.
Probably a dumb question but if I use my uni to vote , I don’t get it back right ?
Why you don't look for UNI/USDC, UNI/ETH UNI/... etc! See the comment from drwx !!! FUND this pools UNI/ and the TVL will increase and the value of protocol / token value will increase! More users will use the protocol.
This is definitely not all the data we should be looking at. The volume is also important. If the liquidity drops 2x, but the volume stays the same, there will be much higher yield from fees for the LPs and that could cause the liquidity to come back.
I think we need 1-2 weeks of data to see how is this going to unfold.
This is definitely not all the data we should be looking at. The volume is also important. If the liquidity drops 2x, but the volume stays the same, there will be much higher yield from fees for the LPs and that could cause the liquidity to come back.
I think we need 1-2 weeks of data to see how is this going to unfold.
But, there is something important we need to keep in mind here: it is good for the UNI distribution to continue, because we need more UNI out there, which could be used for voting. As we see at the moment quorums can't be reached and no proposal has even been passed. As amount of circulating UNI increases, it should be easier to reach quorum.
Edit: spelling
good point... why this / to fund UNI pools (UNI/USDC, UNI/ETH etc) to motivate liquidity providers to actually hold and add more UNIs to pools / is not bring up to discussion? or to vote?
What is the point to bribe liquidity providers for yet another 2 months? There are few proven bad actors like Alameda Research who were shorting and market dumping UNI, these whales are moving billions of dollars in a matter of few transactions from Uniswap to Sushiswap and back.
The additional 2 months won't solve anything, this program doesn't permanently solve the liquidity problem, but only helps whales to manipulate and short the market.
What is the point to bribe liquidity providers for yet another 2 months? There are few proven bad actors like Alameda Research who were shorting and market dumping UNI, these whales are moving billions of dollars in a matter of few transactions from Uniswap to Sushiswap and back.
The additional 2 months won't solve anything, this program doesn't permanently solve the liquidity problem, but only helps whales to manipulate and short the market.
Instead, as already discussed in various topics in this forum, I think it's better to fund UNI pools (UNI/USDC, UNI/ETH etc) to motivate liquidity providers to actually hold and add more UNIs to pools, this will also help for distribution because traders will be able to buy UNI with a lower slippage.
For those having issues voting on Snapshot, please note that only self-delegated UNI is eligible.
If you have not done so already please visit the Voting tab to Unlock Voting on behalf of your UNI!
Glad to see someone taking the initiative! @monet-supply I know you may have had some doubts in bringing a proposal to the table yourself at the time of the community call, so I really welcome your decision to take the time to build such a comprehensive initial thread.
For anyone who hasn't listened to the recording of the first unofficial community call, I strongly recommend you to do that before coming to a decision on whether or not this is a good thing for the protocol.
Glad to see someone taking the initiative! @monet-supply I know you may have had some doubts in bringing a proposal to the table yourself at the time of the community call, so I really welcome your decision to take the time to build such a comprehensive initial thread.
For anyone who hasn't listened to the recording of the first unofficial community call, I strongly recommend you to do that before coming to a decision on whether or not this is a good thing for the protocol.
As mentioned in the call, some of the most important factors to the health and continued adoption of Uniswap is the reduction of slippage and the ease of use as far as Uniswap acting as an on-ramp/off-ramp between stablecoins and other tokens - these are good goals to have at this time.
Whilst I agree that the liquidity mining program cannot continue indefinitely, I feel that in the absence of another proposal for developer grants or other programs that add value to Uniswap, continuation of the program for the time being in order to achieve the above goals is a good idea.
I have a couple of questions:
First, I'd like to echo Chris' sentiment - what was reasoning used when making the decision to cut the rewards in half?
Second, was any thought given to the idea of reducing the number of incentivized pools? A couple of people raised the idea of dropping down to a single stablecoin-ETH pool along with maintaining the wBTC-ETH pool for the time being during the call, and I'm wondering what your thoughts were on this. If its indeed seen to be that the rate of distribution through this program is too high to be sustainable, could this be a reasonable alternative to cutting the per-pool rate in half?
Thanks again for taking the time to build such a comprehensive offering to the community!
Great point. I also think that for the next phase only UNI pools should be incentivized.
🧡💛💚💙 I vote NO.
As a community we need to start getting over this idea of just handing out tokens in Liquidity Pools. The early loyalty scheme is over, we are not going to just endlessly hand these tokens out.
We need to come out with better incentives to add value to UNI over time.
For example: We should give a discount on trading fees if you own and stake your tokens.
🧡💛💚💙 I vote NO.
As a community we need to start getting over this idea of just handing out tokens in Liquidity Pools. The early loyalty scheme is over, we are not going to just endlessly hand these tokens out.
We need to come out with better incentives to add value to UNI over time.
For example: We should give a discount on trading fees if you own and stake your tokens.
There are LOTS of scum whales (I won't say their names) who come in, use their exchange tokens to farm, and auto-dump on everyone. I don't want those r*tards messing with our sweet pink unicorn 🦄
It is obvious that the community should wait and evaluate the effects of the pool ending, as well as wait for Uni V3.
We should be allowing users to access better Uni V3 features if they have UNI token, or maybe stake it too.
As others have mentioned, doing the whole Liquidity pool is trash. I already know of SCUM HEDGE FUNDS who set up "Retailer Pools" to farm the Uni LP and auto-dump every day to get yield.
I will gladly buy their cheap UNI but I don't think you guys understand how much dumping this causes over time.
In summary:
LP incentives are trash and we have moved pass it. NO MORE LP SCHEMES Reward stakers and long-term h0dlers Wait a bit of time and for Uni V3 to come out Consider giving access to more features if you own UNI and stake it. Cheaper fees, more features.
You want to use Uni, the biggest dex in the game? Okay, you buy the token, you commit to staking or owning it with-in your account, and you get access to the best features in the game. A fair trade-off.
Liquidity Pools are Liquidity Poop
🌈
UNICORNS ARE COOL AND HERE TO STAY 🦄
Some thoughts on feedback I've seen so far both here and on Twitter:
Some thoughts on feedback I've seen so far both here and on Twitter:
There's a clear difference of opinions between speculators focused on token price, and those who see liquidity rewards as a means of distributing UNI to allow for more effective governance processes.
I believe we will land somewhere in the middle, and am curious to see how the temperature check vote (now live) plays out.
Actually this week where no reward will be given to the 4 pools could inform us whether volumes will actually decrease because of the projected decrease of liquidity. This will be interesting to observe. Also a very low ratio of volume to liquidity, although providing little slippage in theory, may just benefits arbitrage to make more $ as price equilibrium with centralized exchange will require more swap. Some slippage is important for price discovery and equilibrium in my opinion
These UNI rewards actually created 2 net negative side effects 1) volume to Liquidity ratio have become very small compared to historical ratio for all these 4 pools making actually the overall fees collected (uni token + 0.3% fees) by LPS actually smaller than historical fees. 2) These rewards actually dilutes the token holders without providing benefits to LPs. The only advantage is that UNI can claim higher locked Total value but without any increase in volumes which is the real economic value of UNIswap.
It feels like we may learn a lot from observing what happens when liquidity incentives stop. Would it better to start the poll a few days after that, rather than before?
if your expectation is true (i.e. have fee paid to UNI holder will hinder Uniswap's long term growth and have negative effect), the price of UNI will fall. I bet if we turn the fee switch on, the price of UNI will rise, which will benefit Uniswap with more $ to use for grant program, more incentive to the team. Ultimately, if it is a good decision, UNI price will rise, and vice versa.
I do like this point a lot. Would rather have some cool real world assets on UNI then just farming more UTXO's
Great point. I also think that for the next phase only UNI pools should be incentivized.
🧡💛💚💙 I vote NO.
As a community we need to start getting over this idea of just handing out tokens in Liquidity Pools. The early loyalty scheme is over, we are not going to just endlessly hand these tokens out.
We need to come out with better incentives to add value to UNI over time.
For example: We should give a discount on trading fees if you own and stake your tokens.
🧡💛💚💙 I vote NO.
As a community we need to start getting over this idea of just handing out tokens in Liquidity Pools. The early loyalty scheme is over, we are not going to just endlessly hand these tokens out.
We need to come out with better incentives to add value to UNI over time.
For example: We should give a discount on trading fees if you own and stake your tokens.
There are LOTS of scum whales (I won't say their names) who come in, use their exchange tokens to farm, and auto-dump on everyone. I don't want those r*tards messing with our sweet pink unicorn 🦄
It is obvious that the community should wait and evaluate the effects of the pool ending, as well as wait for Uni V3.
We should be allowing users to access better Uni V3 features if they have UNI token, or maybe stake it too.
As others have mentioned, doing the whole Liquidity pool is trash. I already know of SCUM HEDGE FUNDS who set up "Retailer Pools" to farm the Uni LP and auto-dump every day to get yield.
I will gladly buy their cheap UNI but I don't think you guys understand how much dumping this causes over time.
In summary:
LP incentives are trash and we have moved pass it. NO MORE LP SCHEMES Reward stakers and long-term h0dlers Wait a bit of time and for Uni V3 to come out Consider giving access to more features if you own UNI and stake it. Cheaper fees, more features.
You want to use Uni, the biggest dex in the game? Okay, you buy the token, you commit to staking or owning it with-in your account, and you get access to the best features in the game. A fair trade-off.
Liquidity Pools are Liquidity Poop
🌈
UNICORNS ARE COOL AND HERE TO STAY 🦄
Some thoughts on feedback I've seen so far both here and on Twitter:
Some thoughts on feedback I've seen so far both here and on Twitter:
There's a clear difference of opinions between speculators focused on token price, and those who see liquidity rewards as a means of distributing UNI to allow for more effective governance processes.
I believe we will land somewhere in the middle, and am curious to see how the temperature check vote (now live) plays out.
Actually this week where no reward will be given to the 4 pools could inform us whether volumes will actually decrease because of the projected decrease of liquidity. This will be interesting to observe. Also a very low ratio of volume to liquidity, although providing little slippage in theory, may just benefits arbitrage to make more $ as price equilibrium with centralized exchange will require more swap. Some slippage is important for price discovery and equilibrium in my opinion
These UNI rewards actually created 2 net negative side effects 1) volume to Liquidity ratio have become very small compared to historical ratio for all these 4 pools making actually the overall fees collected (uni token + 0.3% fees) by LPS actually smaller than historical fees. 2) These rewards actually dilutes the token holders without providing benefits to LPs. The only advantage is that UNI can claim higher locked Total value but without any increase in volumes which is the real economic value of UNIswap.
It feels like we may learn a lot from observing what happens when liquidity incentives stop. Would it better to start the poll a few days after that, rather than before?
if your expectation is true (i.e. have fee paid to UNI holder will hinder Uniswap's long term growth and have negative effect), the price of UNI will fall. I bet if we turn the fee switch on, the price of UNI will rise, which will benefit Uniswap with more $ to use for grant program, more incentive to the team. Ultimately, if it is a good decision, UNI price will rise, and vice versa.
I do like this point a lot. Would rather have some cool real world assets on UNI then just farming more UTXO's
Hey CremaFR,
Do you not think there is any fair issue raised with regard to keeping small Uni holders engaged and maintaining a community of as many people as possible from diverse economic backgrounds.
Is there no risk that Uniswap will just turn into a platform that's by in large governed by a few, self-interested whales, who'll manage to accumulate a dominant share of the voting power?
Hey CremaFR,
Do you not think there is any fair issue raised with regard to keeping small Uni holders engaged and maintaining a community of as many people as possible from diverse economic backgrounds.
Is there no risk that Uniswap will just turn into a platform that's by in large governed by a few, self-interested whales, who'll manage to accumulate a dominant share of the voting power?
0.05% is probably too high a share of the total 0.3%, at this point in time, I saw a post on discord pointing out that this percentage is hardcoded, so changing it in smaller increments is probably going to have to wait until a new version release, but a smaller share would probably work fine for keeping small holders engaged. It would be something at least.
I think you're wrong to see this exclusively as a way "to steal fees from LP nothing else".
Do you think there's another way to incentivise small Uni holders to maintain a position in governance, or do you think it's unimportant/ they should just wait for an indeterminate amount of time?
For me personally, I can't really justify holding on to the whole 400 Uni I was gifted without some sort of return, it's too large a proportion of my crypto holdings. I imagine I'm far from alone in this position, the volatility these past couple of days alone has pushed me to sell some of it, it'll be interesting to see if there's any analysis done on who buys it all during this drop.
Unless you’re a whale your vote is practically at least, worthless. Fee switch on benefits small and big uni holders alike. And again everyone has a fee switch and uni has the massive transaction fee edge over all other dex combined. So if yield was the most important, everyone would have left for sushi already where you earn more than on uniswap, yet people stayed. If it didn’t happen then it won’t happen now and we could always extend rewards for the major pairs if it turns out to be a bit of an issue which I highly doubt.
Best way to be certain is figure out the whale addresses for lp’s and cross reference for uni tokens. If there is better than 60% overlap it’s a no brained.
We need to create more polls to boast the value of the UNI.
Do we have to have a fee switch with the margin for token holders at 0.05, could we not go to 0.02 for instance?
Could we not put a mechanism into the proposal where the fee switch is turned off if the market share dropped below a certain level, or a vote is triggered?
Do we have to have a fee switch with the margin for token holders at 0.05, could we not go to 0.02 for instance?
Could we not put a mechanism into the proposal where the fee switch is turned off if the market share dropped below a certain level, or a vote is triggered?
There have to be mechanisms, and compromises that can be explored. I don't have the expertise to know the feasibility of these things, but what incentive to the large number of small UNI holders is there to continue to hold? I think we'll see these people gradually lose interest, or they'll be shaken out of holding due to some fluctuations in price, or something along those lines.
Are we going to let these people leave while the large hands accumulate more and more UNI? That circumstance will lead to the DAO not being very decentralised, no?
Can you expand on why you believe [fee] will/should stay this way?
I don't see any belief expressed, only observation that competitors' perpetual liquidity incentives are unsustainable and once they die down, the 0.3% LP fee clearly beats 0.25%.
Interesting take, perhaps it is somewhat early to distribute a small proportion of the rewards to Uni stakers but there are reasons to do this, that don't explicitly involving the price.
If users are incentivised to stake in the voting mechanism rather than just passive buy & burn holding that would get users 1 step closer to voting.
Interesting take, perhaps it is somewhat early to distribute a small proportion of the rewards to Uni stakers but there are reasons to do this, that don't explicitly involving the price.
If users are incentivised to stake in the voting mechanism rather than just passive buy & burn holding that would get users 1 step closer to voting.
This also encourages users not to store there Uni on centralised exchanges. (As they’d be missing out on these rewards, reducing that attack vector)
Hey everyone,
While this proposal had a lot of community support I believe current data has shown that another liquidity program was not necessary for the health of UNI's TVL.
I strongly recommend doubters to have a look at the numbers : https://defipulse.com/uniswap
Hey everyone,
While this proposal had a lot of community support I believe current data has shown that another liquidity program was not necessary for the health of UNI's TVL.
I strongly recommend doubters to have a look at the numbers : https://defipulse.com/uniswap
Perhaps we should switch the conversation to another mode of incentivization : LP token yields. There are a lot of projects trailblazing this topic and creating community partnerships might be a smart and efficient way to secure long term TVL.
This is the best solution for now, and I trust that it will change in the future. Please don't forget that another successful vote happened in the past month.
This information is so important at this point that there’s no doubt that it makes them able to take significantly better decisions for the protocol than us.
You describe a worst case for decentral goverment. Hidden Information, small teams with control advantage. Then there is no use in creating a community with gov tokens at all.
I see you mentioned keeping the fee switch turned off. Can you expand on why you believe it will/should stay this way? Given uniswap dominates transactions a slight dip in lp transaction fees still means uniswap is the best place to LP if you arent farming and will reward uni holders. Without a fee switch there is almost no reason to hold uniswap tokens vs sushi (or even pancake) that have a fee switch turned on.
Here's what I suspect happened: The core team knows V3 is coming soon, and realized that rewarding LPs isn't necessary at all at this point. They feared that the community (and LPs) would vote for reactivating LP rewards, and they feared that the LPs gain too much power so early. These rewards would only lead to more LP rewards, more power for LPs, more LP rewards, more power for LPs.
They realized that this a threat to the protocol, and and an extremely serious one.
Here's what I suspect happened: The core team knows V3 is coming soon, and realized that rewarding LPs isn't necessary at all at this point. They feared that the community (and LPs) would vote for reactivating LP rewards, and they feared that the LPs gain too much power so early. These rewards would only lead to more LP rewards, more power for LPs, more LP rewards, more power for LPs.
They realized that this a threat to the protocol, and and an extremely serious one.
So they decided to slow down the setting of this vote, which is weird, but works.
My guess is that in order for V3 to make as much noise as possible and to maximize decentralization, it will include user incentivization at launch. This would be a fantastic marketing tactic, and would allow to gain crazy market shares not only from all dexes but also from cexes as well. Extremely rapidly
Amazing launch + excellent decentralization = fantastic plan. Then only can the governance be fully put in the hands of the community, which was the initial plan.
I whole-heartedly agree, and hope the current management displayed by the core team is temporary until v3 is released.
All of these arguments are valid, but it also means current governance is meaningless for small players. As a community we deserve more than the current level of fog. You cannot justify the value of UNI as a governance token at the moment and it is a situation that worries me greatly
Yes I fully agree. Even though the Sushiswap situation worried me at the beginning, it looks less of a major threat today. Sushiswap will certainly survive, it will probably grow, but it doesn't look like it will become the #1 dex anytime soon. Without incentives, Sushiswap cannot really compete with V2 yet. And even with incentives, I doubt it will be able to compete with V3.
What I'm curious about is the way the team will make V3 hard to copy. I'm sure they will somehow manage to do it even if it means additional delays. Still a good choice. Setting up optimistic rollups (if any) will certainly be harder than copying V2, but my guess is that there'll be more than that.
Yes I fully agree. Even though the Sushiswap situation worried me at the beginning, it looks less of a major threat today. Sushiswap will certainly survive, it will probably grow, but it doesn't look like it will become the #1 dex anytime soon. Without incentives, Sushiswap cannot really compete with V2 yet. And even with incentives, I doubt it will be able to compete with V3.
What I'm curious about is the way the team will make V3 hard to copy. I'm sure they will somehow manage to do it even if it means additional delays. Still a good choice. Setting up optimistic rollups (if any) will certainly be harder than copying V2, but my guess is that there'll be more than that.
I can't wait!
At the same time, I understand the Uniswap dev team for keeping everything about v3 under wraps.
Giving advance info to copycats/competition would hurt Uniswap at the moment. Let them be stunned when v3 gets out :slight_smile:
At the same time, I understand the Uniswap dev team for keeping everything about v3 under wraps.
Giving advance info to copycats/competition would hurt Uniswap at the moment. Let them be stunned when v3 gets out :slight_smile:
I think it's now safe to assume big delegates have been told to put incentivization on hold. Otherwise, they would reply. I've pinged them many times on Discord and here, and they keep quiet.
In the meantime, we are losing liquidity, but volume doesn't follow that much. Sushiswap has to use subsidies all the time, pretty much on every pair since they have the fee switch turned on (LPs get less by default).
Uniswap is still the default DEX for most new coins. Recent example : The Graph / GRT. I think there's literally 0$ liquidity on Sushi at the moment.
Hey CremaFR,
Do you not think there is any fair issue raised with regard to keeping small Uni holders engaged and maintaining a community of as many people as possible from diverse economic backgrounds.
Is there no risk that Uniswap will just turn into a platform that's by in large governed by a few, self-interested whales, who'll manage to accumulate a dominant share of the voting power?
Hey CremaFR,
Do you not think there is any fair issue raised with regard to keeping small Uni holders engaged and maintaining a community of as many people as possible from diverse economic backgrounds.
Is there no risk that Uniswap will just turn into a platform that's by in large governed by a few, self-interested whales, who'll manage to accumulate a dominant share of the voting power?
0.05% is probably too high a share of the total 0.3%, at this point in time, I saw a post on discord pointing out that this percentage is hardcoded, so changing it in smaller increments is probably going to have to wait until a new version release, but a smaller share would probably work fine for keeping small holders engaged. It would be something at least.
I think you're wrong to see this exclusively as a way "to steal fees from LP nothing else".
Do you think there's another way to incentivise small Uni holders to maintain a position in governance, or do you think it's unimportant/ they should just wait for an indeterminate amount of time?
For me personally, I can't really justify holding on to the whole 400 Uni I was gifted without some sort of return, it's too large a proportion of my crypto holdings. I imagine I'm far from alone in this position, the volatility these past couple of days alone has pushed me to sell some of it, it'll be interesting to see if there's any analysis done on who buys it all during this drop.
Unless you’re a whale your vote is practically at least, worthless. Fee switch on benefits small and big uni holders alike. And again everyone has a fee switch and uni has the massive transaction fee edge over all other dex combined. So if yield was the most important, everyone would have left for sushi already where you earn more than on uniswap, yet people stayed. If it didn’t happen then it won’t happen now and we could always extend rewards for the major pairs if it turns out to be a bit of an issue which I highly doubt.
Best way to be certain is figure out the whale addresses for lp’s and cross reference for uni tokens. If there is better than 60% overlap it’s a no brained.
We need to create more polls to boast the value of the UNI.
Do we have to have a fee switch with the margin for token holders at 0.05, could we not go to 0.02 for instance?
Could we not put a mechanism into the proposal where the fee switch is turned off if the market share dropped below a certain level, or a vote is triggered?
Do we have to have a fee switch with the margin for token holders at 0.05, could we not go to 0.02 for instance?
Could we not put a mechanism into the proposal where the fee switch is turned off if the market share dropped below a certain level, or a vote is triggered?
There have to be mechanisms, and compromises that can be explored. I don't have the expertise to know the feasibility of these things, but what incentive to the large number of small UNI holders is there to continue to hold? I think we'll see these people gradually lose interest, or they'll be shaken out of holding due to some fluctuations in price, or something along those lines.
Are we going to let these people leave while the large hands accumulate more and more UNI? That circumstance will lead to the DAO not being very decentralised, no?
Can you expand on why you believe [fee] will/should stay this way?
I don't see any belief expressed, only observation that competitors' perpetual liquidity incentives are unsustainable and once they die down, the 0.3% LP fee clearly beats 0.25%.
Interesting take, perhaps it is somewhat early to distribute a small proportion of the rewards to Uni stakers but there are reasons to do this, that don't explicitly involving the price.
If users are incentivised to stake in the voting mechanism rather than just passive buy & burn holding that would get users 1 step closer to voting.
Interesting take, perhaps it is somewhat early to distribute a small proportion of the rewards to Uni stakers but there are reasons to do this, that don't explicitly involving the price.
If users are incentivised to stake in the voting mechanism rather than just passive buy & burn holding that would get users 1 step closer to voting.
This also encourages users not to store there Uni on centralised exchanges. (As they’d be missing out on these rewards, reducing that attack vector)
Hey everyone,
While this proposal had a lot of community support I believe current data has shown that another liquidity program was not necessary for the health of UNI's TVL.
I strongly recommend doubters to have a look at the numbers : https://defipulse.com/uniswap
Hey everyone,
While this proposal had a lot of community support I believe current data has shown that another liquidity program was not necessary for the health of UNI's TVL.
I strongly recommend doubters to have a look at the numbers : https://defipulse.com/uniswap
Perhaps we should switch the conversation to another mode of incentivization : LP token yields. There are a lot of projects trailblazing this topic and creating community partnerships might be a smart and efficient way to secure long term TVL.
This is the best solution for now, and I trust that it will change in the future. Please don't forget that another successful vote happened in the past month.
This information is so important at this point that there’s no doubt that it makes them able to take significantly better decisions for the protocol than us.
You describe a worst case for decentral goverment. Hidden Information, small teams with control advantage. Then there is no use in creating a community with gov tokens at all.
I see you mentioned keeping the fee switch turned off. Can you expand on why you believe it will/should stay this way? Given uniswap dominates transactions a slight dip in lp transaction fees still means uniswap is the best place to LP if you arent farming and will reward uni holders. Without a fee switch there is almost no reason to hold uniswap tokens vs sushi (or even pancake) that have a fee switch turned on.
Here's what I suspect happened: The core team knows V3 is coming soon, and realized that rewarding LPs isn't necessary at all at this point. They feared that the community (and LPs) would vote for reactivating LP rewards, and they feared that the LPs gain too much power so early. These rewards would only lead to more LP rewards, more power for LPs, more LP rewards, more power for LPs.
They realized that this a threat to the protocol, and and an extremely serious one.
Here's what I suspect happened: The core team knows V3 is coming soon, and realized that rewarding LPs isn't necessary at all at this point. They feared that the community (and LPs) would vote for reactivating LP rewards, and they feared that the LPs gain too much power so early. These rewards would only lead to more LP rewards, more power for LPs, more LP rewards, more power for LPs.
They realized that this a threat to the protocol, and and an extremely serious one.
So they decided to slow down the setting of this vote, which is weird, but works.
My guess is that in order for V3 to make as much noise as possible and to maximize decentralization, it will include user incentivization at launch. This would be a fantastic marketing tactic, and would allow to gain crazy market shares not only from all dexes but also from cexes as well. Extremely rapidly
Amazing launch + excellent decentralization = fantastic plan. Then only can the governance be fully put in the hands of the community, which was the initial plan.
I whole-heartedly agree, and hope the current management displayed by the core team is temporary until v3 is released.
All of these arguments are valid, but it also means current governance is meaningless for small players. As a community we deserve more than the current level of fog. You cannot justify the value of UNI as a governance token at the moment and it is a situation that worries me greatly
Yes I fully agree. Even though the Sushiswap situation worried me at the beginning, it looks less of a major threat today. Sushiswap will certainly survive, it will probably grow, but it doesn't look like it will become the #1 dex anytime soon. Without incentives, Sushiswap cannot really compete with V2 yet. And even with incentives, I doubt it will be able to compete with V3.
What I'm curious about is the way the team will make V3 hard to copy. I'm sure they will somehow manage to do it even if it means additional delays. Still a good choice. Setting up optimistic rollups (if any) will certainly be harder than copying V2, but my guess is that there'll be more than that.
Yes I fully agree. Even though the Sushiswap situation worried me at the beginning, it looks less of a major threat today. Sushiswap will certainly survive, it will probably grow, but it doesn't look like it will become the #1 dex anytime soon. Without incentives, Sushiswap cannot really compete with V2 yet. And even with incentives, I doubt it will be able to compete with V3.
What I'm curious about is the way the team will make V3 hard to copy. I'm sure they will somehow manage to do it even if it means additional delays. Still a good choice. Setting up optimistic rollups (if any) will certainly be harder than copying V2, but my guess is that there'll be more than that.
I can't wait!
At the same time, I understand the Uniswap dev team for keeping everything about v3 under wraps.
Giving advance info to copycats/competition would hurt Uniswap at the moment. Let them be stunned when v3 gets out :slight_smile:
At the same time, I understand the Uniswap dev team for keeping everything about v3 under wraps.
Giving advance info to copycats/competition would hurt Uniswap at the moment. Let them be stunned when v3 gets out :slight_smile:
I think it's now safe to assume big delegates have been told to put incentivization on hold. Otherwise, they would reply. I've pinged them many times on Discord and here, and they keep quiet.
In the meantime, we are losing liquidity, but volume doesn't follow that much. Sushiswap has to use subsidies all the time, pretty much on every pair since they have the fee switch turned on (LPs get less by default).
Uniswap is still the default DEX for most new coins. Recent example : The Graph / GRT. I think there's literally 0$ liquidity on Sushi at the moment.
Let's keep in mind that founder, devs and VCs have way more information in their hands than us: They know what will go in V3, and when it can be expected. This information is so important at this point that there's no doubt that it makes them able to take significantly better decisions for the protocol than us. While I'm sure Uniswap's future is decentralized, I'm ok with its present being partially centralized.
Let's not forget that the only reason why we have UNI available to us today is Sushiswap. UNIs wouldn't have been dropped so early without this competition, this clearly wasn't the initial plan. But as far as I can tell, everything is working pretty well so far. VCs interests are aligned with ours here, they can be trusted for the moment.
"non-governance", notice how proposals pushed by VCs get done, unlike the others
So am I. All the discussions here didnt develop uniswap. Soon defi on polkadot or other "cheaper transacting" blockchains becomes a thing. Bring up some incentives for usage/new users. Or continue your beauty sleep until the world changed.
https://forum.sushiswapclassic.org/t/simp-2-onsen/1546
Interesting read.
I havent seen one talk so much sense in a post in a long time :) Big thumbs up Monet! This post made me proud.
I think it could also be that V2 liquidity incentives will represent a problem with regards to V2->V3 liquidity migration. Once the code is voted, it lasts 2 months and doesn't distribute anything to future V3 LPers... So the Uniswap team probably thinks V3 might be operational within ~2 months.
It's an interesting question indeed. At the first glance, I know that I could fall under this irrational category. But there's additional parameters that could be easily overlooked, in my case for example the fact that sushiswap offers services such as limit orders, that according to their own website go through unaudited code, that's a red flag.
Other than that I'm also thinking that imminent announcements about V3 could be the reason why this is taking longer than expected.
It's an interesting question indeed. At the first glance, I know that I could fall under this irrational category. But there's additional parameters that could be easily overlooked, in my case for example the fact that sushiswap offers services such as limit orders, that according to their own website go through unaudited code, that's a red flag.
Other than that I'm also thinking that imminent announcements about V3 could be the reason why this is taking longer than expected.
Which is why I'm a uni holder, which is why I favor Uniswap as a user.
There's still some irrationality in this (Uniswap fanboyism) but it's probably a minor component of the choice.
I think a major part of it is also simply awareness: frequent defi users all know sushiswap, sure. Other users, not necessarily. They might know the name, but as long as Uniswap is satisfying enough, why bother spending some time determining if alternatives would justify switching platorms?
To be perfectly honest, I think V3 really is around the corner and that could explain why big delegates are putting stuff on hold. Of course I can't confirm anything here. It's just hard to explain how code for an incentives distributor that uses basically the same structure but with different values would take weeks to write...
Maybe @monet-supply can tell us how the code is progressing so far ? Or @coopahtroopa
I don't know why the proposal is taking longer than necessary? Voting gears up governance cos it engages delegates optimally, and until a voting process is won, there remains an important mileston Unicorn governance is yet to attain.
It would be interesting to see how many « irrational » trades are made on Uni. We can probably estimate it. Irrational is when you'd get a better outcome on another DEX.
When you said « liquidity didn't follow users », that's when I thought you might be taking things for granted. It's an ongoing process and the results could be showing up more in 1 month.
Sorry for my alarmist tone...
Hi allo, thanks for your answer. I certainly don't take users for granted, what did I write that makes you think I do?
On the contrary, one of the incentive programs I had in mind here was the incentivizing of usage, which would aim at the end users. Because I don't take them for granted.
I agree with everything else in your comment.
People get higher slippage with Uniswap now on many "hot pairs" as we have shown. Some trades are not rational from an economical standpoint and are probably the result of a lack of information (we love a brand, but when it's cheaper elsewhere for the same end result [in this case, a pure amount of cryptocurrency], that's what rational people will choose). Sushi is growing at a fast pace. Its token too : 3x in terms of eth value vs beginning of November. Vesting and staking slows down selling pressure. They are using inflation as a weapon. We are using inflation to do nothing, currently. They incentivize all the new up and coming coins. ESD is next. Please don't take users for granted.
True true. In any case, I don't see any scenario in which the current situation doesn't indicate that V3 is coming soon :)
You are not over simplifying the process! There's more to this issue than just writing code for a proposal to allow for adjustment of figures on an already existing incentives distribution formulae. Let's wait and watch as things unfold.
How long drafting a proposal could take?
Can you explain what do you mean?
Burning UNI token to shrink supply is a wrong move for sustainable growth in the Unicorn governance structure.
What's governance all about afterall...when are we having on-chain voting on LP incentives?
Let's keep in mind that founder, devs and VCs have way more information in their hands than us: They know what will go in V3, and when it can be expected. This information is so important at this point that there's no doubt that it makes them able to take significantly better decisions for the protocol than us. While I'm sure Uniswap's future is decentralized, I'm ok with its present being partially centralized.
Let's not forget that the only reason why we have UNI available to us today is Sushiswap. UNIs wouldn't have been dropped so early without this competition, this clearly wasn't the initial plan. But as far as I can tell, everything is working pretty well so far. VCs interests are aligned with ours here, they can be trusted for the moment.
"non-governance", notice how proposals pushed by VCs get done, unlike the others
So am I. All the discussions here didnt develop uniswap. Soon defi on polkadot or other "cheaper transacting" blockchains becomes a thing. Bring up some incentives for usage/new users. Or continue your beauty sleep until the world changed.
https://forum.sushiswapclassic.org/t/simp-2-onsen/1546
Interesting read.
I havent seen one talk so much sense in a post in a long time :) Big thumbs up Monet! This post made me proud.
I think it could also be that V2 liquidity incentives will represent a problem with regards to V2->V3 liquidity migration. Once the code is voted, it lasts 2 months and doesn't distribute anything to future V3 LPers... So the Uniswap team probably thinks V3 might be operational within ~2 months.
It's an interesting question indeed. At the first glance, I know that I could fall under this irrational category. But there's additional parameters that could be easily overlooked, in my case for example the fact that sushiswap offers services such as limit orders, that according to their own website go through unaudited code, that's a red flag.
Other than that I'm also thinking that imminent announcements about V3 could be the reason why this is taking longer than expected.
It's an interesting question indeed. At the first glance, I know that I could fall under this irrational category. But there's additional parameters that could be easily overlooked, in my case for example the fact that sushiswap offers services such as limit orders, that according to their own website go through unaudited code, that's a red flag.
Other than that I'm also thinking that imminent announcements about V3 could be the reason why this is taking longer than expected.
Which is why I'm a uni holder, which is why I favor Uniswap as a user.
There's still some irrationality in this (Uniswap fanboyism) but it's probably a minor component of the choice.
I think a major part of it is also simply awareness: frequent defi users all know sushiswap, sure. Other users, not necessarily. They might know the name, but as long as Uniswap is satisfying enough, why bother spending some time determining if alternatives would justify switching platorms?
To be perfectly honest, I think V3 really is around the corner and that could explain why big delegates are putting stuff on hold. Of course I can't confirm anything here. It's just hard to explain how code for an incentives distributor that uses basically the same structure but with different values would take weeks to write...
Maybe @monet-supply can tell us how the code is progressing so far ? Or @coopahtroopa
I don't know why the proposal is taking longer than necessary? Voting gears up governance cos it engages delegates optimally, and until a voting process is won, there remains an important mileston Unicorn governance is yet to attain.
It would be interesting to see how many « irrational » trades are made on Uni. We can probably estimate it. Irrational is when you'd get a better outcome on another DEX.
When you said « liquidity didn't follow users », that's when I thought you might be taking things for granted. It's an ongoing process and the results could be showing up more in 1 month.
Sorry for my alarmist tone...
Hi allo, thanks for your answer. I certainly don't take users for granted, what did I write that makes you think I do?
On the contrary, one of the incentive programs I had in mind here was the incentivizing of usage, which would aim at the end users. Because I don't take them for granted.
I agree with everything else in your comment.
People get higher slippage with Uniswap now on many "hot pairs" as we have shown. Some trades are not rational from an economical standpoint and are probably the result of a lack of information (we love a brand, but when it's cheaper elsewhere for the same end result [in this case, a pure amount of cryptocurrency], that's what rational people will choose). Sushi is growing at a fast pace. Its token too : 3x in terms of eth value vs beginning of November. Vesting and staking slows down selling pressure. They are using inflation as a weapon. We are using inflation to do nothing, currently. They incentivize all the new up and coming coins. ESD is next. Please don't take users for granted.
True true. In any case, I don't see any scenario in which the current situation doesn't indicate that V3 is coming soon :)
You are not over simplifying the process! There's more to this issue than just writing code for a proposal to allow for adjustment of figures on an already existing incentives distribution formulae. Let's wait and watch as things unfold.
How long drafting a proposal could take?
Can you explain what do you mean?
Burning UNI token to shrink supply is a wrong move for sustainable growth in the Unicorn governance structure.
What's governance all about afterall...when are we having on-chain voting on LP incentives?
Uniswap clearly has the most mysterious governance process for now :ghost:
While we hear the cricket chirping...
Volume is still low in comparison with Uniswap though (roughly 1/5th, or less)
While we hear the cricket chirping...
Volume is still low in comparison with Uniswap though (roughly 1/5th, or less)
Sorry to say it like this but so far, from my point of view, the process for the new incentives campaign has been a bit of a disaster. I love the discussions we've had here, but I'm concerned that we are still debating and not voting. During this time, I'm both happy and surprised Sushi didn't steal more volume. At this point (1 month after the start of this thread) my expectations with regards to governance have dropped sharply and I'm kind of just hoping that V3 comes fast enough. It looks like big delegates have mostly abandoned us here.
I know Compound governance has existed for a bit longer and deals with different matters, but to give you a point of comparison, they have voted on 4 proposals (3 of them passed) while we were discussing here... Maybe it's not the best metric, maybe there are problems (I'm not familiar w/ Compoun gov.), but still.
@monet-supply is working on the proposal. Soon we will get to vote...
It feels like we are stuck, when the rewards will be renewed?!
A simplified take on Balancer's Smart Pools. Basically it's a part of the treasury that is automatically used as liquidity on pairs that need it.
Probably not a good idea. The APY wouldn't be worth it at all and would give LPs second thoughts about staying (suddenly, 1/6th of their APY disappears).
Probably not a good idea. The APY wouldn't be worth it at all and would give LPs second thoughts about staying (suddenly, 1/6th of their APY disappears).
So, we’ve all been debating for or against liquidity mining, and what pairs should be the most important, but considering the size the amounts intended to be distribruted, wouldn’t it be better to use the amounts as Smart Liquidity Providers in the meantime ?
What is a Smart Liquidity Provider ?
I see this delay as a very positive thing. Had the vote gone through immediately, we would have never learned what you pointed out to:
Users didn't follow liquidity. And this is a key lesson for the entire project and for the dex space at large.
I see this delay as a very positive thing. Had the vote gone through immediately, we would have never learned what you pointed out to:
Users didn't follow liquidity. And this is a key lesson for the entire project and for the dex space at large.
Sushiswap is currently burning its tokens away in order to attract LPs. Good. What good are LPs without users? Plus it's safe to assume that the majority of LPs will come back to Uniswap as soon as Sushis won't be distributed anymore.
We still have enough liquidity to operate, we still have most of the users, why would we even want to spend UNIs here?
It wouldn't bring the protocol much, it would be very expensive, it would contribute to centralizing governance in the hands of the LPs, and it would take away bullets that could be used later, in case they are actually needed at some point. LP incentives take away from other incentive programs we might decide to put in place in the future.
I would love to see the delay last longer tbh.
Update on liquidity conditions, users, transactions (count and volume) for Uniswap and Sushiswap. 
I believe we are at step
TBD -
Submit Uniswap proposal 3 for on chain UNI voting 10 million UNI required to submit proposal and begin vote Voting period lasts ~6 days and 4 hours (40,320 blocks) 40 million UNI required to meet quorum
The hold-up is probably on @monet-supply completing the necessary technical work for the actual on-chain proposal.
Not only is the process slow, but the proposal we will soon vote on is, in my opinion, based on a now outdated understanding of the situation.
IMO if the proposal doesn't pass, there should be a series of other votes about proposals that have been made here (no need to go through the 2 week temperature check, etc. process, because we've been discussing this for a long time now, there are now 170+ replies in this thread alone) until something passes. The next vote after this one should be about incentivizing key DeFi pairs/DeFi « bluechips ». Again, with 50% of the original (initial phase) budget.
Not only is the process slow, but the proposal we will soon vote on is, in my opinion, based on a now outdated understanding of the situation.
IMO if the proposal doesn't pass, there should be a series of other votes about proposals that have been made here (no need to go through the 2 week temperature check, etc. process, because we've been discussing this for a long time now, there are now 170+ replies in this thread alone) until something passes. The next vote after this one should be about incentivizing key DeFi pairs/DeFi « bluechips ». Again, with 50% of the original (initial phase) budget.
**IMO the incentivization period/epoch should probably be less than 2 months because the market moves way too fast. Maybe 4-6 weeks and during those weeks we do our best in this forum to come up with a new proposal in time.
Ideally, we can also come up with a proposal for vesting part of the rewards soon. And other proposals for UNI distribution that's not related to liquidity mining (it could be usage rewards, some form of staking, integrations, grants, etc.)
So, we've all been debating for or against liquidity mining, and what pairs should be the most important, but considering the size the amounts intended to be distribruted, wouldn't it be better to use the amounts as Smart Liquidity Providers in the meantime ?
It's a band-aid solution but it solves the problem of slippage and liquidity while we figure out an optimal strategy + it's virtually free minus transaction costs and IL,
So, we've all been debating for or against liquidity mining, and what pairs should be the most important, but considering the size the amounts intended to be distribruted, wouldn't it be better to use the amounts as Smart Liquidity Providers in the meantime ?
It's a band-aid solution but it solves the problem of slippage and liquidity while we figure out an optimal strategy + it's virtually free minus transaction costs and IL,
Cheers
I fully agree Allo, I think you provided perfect, logical, objective points to your argument. I would also support another approach to things which would be able to reach more consensus in the community.
The arbitrary censorship from the uncooperative, unwilling side who get mad at other people having a different opinion shows entirely how untrustworthy they are. I called them out on the temperature check ignoring the majority and the proposal stealing value from the holders while channeling it to the farmers and short sellers. No opposing arguments have been made on their side just blatant attempt at censorship. Vast majority of my posts have been already reinstated by staff as they did not break any rules.
We are not having a bash war here, we are having a civilized conversation based on merit and facts. This proposal showed how deeply divided the community is on this issue; therefore, it shouldnt even move to the voting stage as under normal circumstances even the temperature check wouldnt pass. Whats the point of calling a temp check when one guy with 1,5M votes passes the temp check?????
2 people passed the temperature check. TWO votes. That is how decentralized we are. Instead of moving proposals like this, we should figure out a new way of voting. It is an issue.
We are not having a bash war here, we are having a civilized conversation based on merit and facts. This proposal showed how deeply divided the community is on this issue; therefore, it shouldnt even move to the voting stage as under normal circumstances even the temperature check wouldnt pass. Whats the point of calling a temp check when one guy with 1,5M votes passes the temp check?????
2 people passed the temperature check. TWO votes. That is how decentralized we are. Instead of moving proposals like this, we should figure out a new way of voting. It is an issue.
I can make a temp check poll for my proposal, vote for it, it will pass the 50k threshold and say Im sorry guys, the community has spoken! The temperature check has passed! And other people from the community will not have a chance to outweigh my vote despite being the majority.
This makes utterly no sense at all.
Uniswap clearly has the most mysterious governance process for now :ghost:
While we hear the cricket chirping...
Volume is still low in comparison with Uniswap though (roughly 1/5th, or less)
While we hear the cricket chirping...
Volume is still low in comparison with Uniswap though (roughly 1/5th, or less)
Sorry to say it like this but so far, from my point of view, the process for the new incentives campaign has been a bit of a disaster. I love the discussions we've had here, but I'm concerned that we are still debating and not voting. During this time, I'm both happy and surprised Sushi didn't steal more volume. At this point (1 month after the start of this thread) my expectations with regards to governance have dropped sharply and I'm kind of just hoping that V3 comes fast enough. It looks like big delegates have mostly abandoned us here.
I know Compound governance has existed for a bit longer and deals with different matters, but to give you a point of comparison, they have voted on 4 proposals (3 of them passed) while we were discussing here... Maybe it's not the best metric, maybe there are problems (I'm not familiar w/ Compoun gov.), but still.
@monet-supply is working on the proposal. Soon we will get to vote...
It feels like we are stuck, when the rewards will be renewed?!
A simplified take on Balancer's Smart Pools. Basically it's a part of the treasury that is automatically used as liquidity on pairs that need it.
Probably not a good idea. The APY wouldn't be worth it at all and would give LPs second thoughts about staying (suddenly, 1/6th of their APY disappears).
Probably not a good idea. The APY wouldn't be worth it at all and would give LPs second thoughts about staying (suddenly, 1/6th of their APY disappears).
So, we’ve all been debating for or against liquidity mining, and what pairs should be the most important, but considering the size the amounts intended to be distribruted, wouldn’t it be better to use the amounts as Smart Liquidity Providers in the meantime ?
What is a Smart Liquidity Provider ?
I see this delay as a very positive thing. Had the vote gone through immediately, we would have never learned what you pointed out to:
Users didn't follow liquidity. And this is a key lesson for the entire project and for the dex space at large.
I see this delay as a very positive thing. Had the vote gone through immediately, we would have never learned what you pointed out to:
Users didn't follow liquidity. And this is a key lesson for the entire project and for the dex space at large.
Sushiswap is currently burning its tokens away in order to attract LPs. Good. What good are LPs without users? Plus it's safe to assume that the majority of LPs will come back to Uniswap as soon as Sushis won't be distributed anymore.
We still have enough liquidity to operate, we still have most of the users, why would we even want to spend UNIs here?
It wouldn't bring the protocol much, it would be very expensive, it would contribute to centralizing governance in the hands of the LPs, and it would take away bullets that could be used later, in case they are actually needed at some point. LP incentives take away from other incentive programs we might decide to put in place in the future.
I would love to see the delay last longer tbh.
Update on liquidity conditions, users, transactions (count and volume) for Uniswap and Sushiswap.
I believe we are at step
TBD -
Submit Uniswap proposal 3 for on chain UNI voting 10 million UNI required to submit proposal and begin vote Voting period lasts ~6 days and 4 hours (40,320 blocks) 40 million UNI required to meet quorum
The hold-up is probably on @monet-supply completing the necessary technical work for the actual on-chain proposal.
Not only is the process slow, but the proposal we will soon vote on is, in my opinion, based on a now outdated understanding of the situation.
IMO if the proposal doesn't pass, there should be a series of other votes about proposals that have been made here (no need to go through the 2 week temperature check, etc. process, because we've been discussing this for a long time now, there are now 170+ replies in this thread alone) until something passes. The next vote after this one should be about incentivizing key DeFi pairs/DeFi « bluechips ». Again, with 50% of the original (initial phase) budget.
Not only is the process slow, but the proposal we will soon vote on is, in my opinion, based on a now outdated understanding of the situation.
IMO if the proposal doesn't pass, there should be a series of other votes about proposals that have been made here (no need to go through the 2 week temperature check, etc. process, because we've been discussing this for a long time now, there are now 170+ replies in this thread alone) until something passes. The next vote after this one should be about incentivizing key DeFi pairs/DeFi « bluechips ». Again, with 50% of the original (initial phase) budget.
**IMO the incentivization period/epoch should probably be less than 2 months because the market moves way too fast. Maybe 4-6 weeks and during those weeks we do our best in this forum to come up with a new proposal in time.
Ideally, we can also come up with a proposal for vesting part of the rewards soon. And other proposals for UNI distribution that's not related to liquidity mining (it could be usage rewards, some form of staking, integrations, grants, etc.)
So, we've all been debating for or against liquidity mining, and what pairs should be the most important, but considering the size the amounts intended to be distribruted, wouldn't it be better to use the amounts as Smart Liquidity Providers in the meantime ?
It's a band-aid solution but it solves the problem of slippage and liquidity while we figure out an optimal strategy + it's virtually free minus transaction costs and IL,
So, we've all been debating for or against liquidity mining, and what pairs should be the most important, but considering the size the amounts intended to be distribruted, wouldn't it be better to use the amounts as Smart Liquidity Providers in the meantime ?
It's a band-aid solution but it solves the problem of slippage and liquidity while we figure out an optimal strategy + it's virtually free minus transaction costs and IL,
Cheers
I fully agree Allo, I think you provided perfect, logical, objective points to your argument. I would also support another approach to things which would be able to reach more consensus in the community.
The arbitrary censorship from the uncooperative, unwilling side who get mad at other people having a different opinion shows entirely how untrustworthy they are. I called them out on the temperature check ignoring the majority and the proposal stealing value from the holders while channeling it to the farmers and short sellers. No opposing arguments have been made on their side just blatant attempt at censorship. Vast majority of my posts have been already reinstated by staff as they did not break any rules.
We are not having a bash war here, we are having a civilized conversation based on merit and facts. This proposal showed how deeply divided the community is on this issue; therefore, it shouldnt even move to the voting stage as under normal circumstances even the temperature check wouldnt pass. Whats the point of calling a temp check when one guy with 1,5M votes passes the temp check?????
2 people passed the temperature check. TWO votes. That is how decentralized we are. Instead of moving proposals like this, we should figure out a new way of voting. It is an issue.
We are not having a bash war here, we are having a civilized conversation based on merit and facts. This proposal showed how deeply divided the community is on this issue; therefore, it shouldnt even move to the voting stage as under normal circumstances even the temperature check wouldnt pass. Whats the point of calling a temp check when one guy with 1,5M votes passes the temp check?????
2 people passed the temperature check. TWO votes. That is how decentralized we are. Instead of moving proposals like this, we should figure out a new way of voting. It is an issue.
I can make a temp check poll for my proposal, vote for it, it will pass the 50k threshold and say Im sorry guys, the community has spoken! The temperature check has passed! And other people from the community will not have a chance to outweigh my vote despite being the majority.
This makes utterly no sense at all.
See, this is exactly what I am talking about.
You yourself are violating the community guidelines.
The guidelines state one should avoid :
See, this is exactly what I am talking about.
You yourself are violating the community guidelines.
The guidelines state one should avoid :
How did you last comment contribute to the conversation? To the arguments I have outlined for you there? No answers were provided, no counter arguments, anything of that sort. Just plain knee-jerk reaction. I fail to see it so I shall flag your response to the comment as I think it violates the rule.
Great job. :+1: Noticed that you have about 1M delegated votes. Do you have any plan to reach the threshold of submit an on chain voting?
How about distribute UNI to delegated UNI holders? https://gov.uniswap.org/t/temperature-check-distribute-uni-to-delegated-uni-holder/9049
Are you sure stealing is a fitting description? From my viewpoint its an open discussion about the future usage of uni. Its open and everyone will be heared. You were only asked to be more polite in conversation. I would at least consider this.
Yes, I'll give you that. Andre is talented, but he has a weird vibe. He tried to become a Uni politician and he tried to make the Dharma vote pass, yes. He failed at both.
Actually, if the APY is better for LPs now that the campaign has stopped, maybe miners actually cared about holding some of the UNI they mined. Otherwise, it's hard to explain how they would favor lower APY.
Yes, I'll give you that. Andre is talented, but he has a weird vibe. He tried to become a Uni politician and he tried to make the Dharma vote pass, yes. He failed at both.
Actually, if the APY is better for LPs now that the campaign has stopped, maybe miners actually cared about holding some of the UNI they mined. Otherwise, it's hard to explain how they would favor lower APY.
BTW I don't find the UNI-ETH LP incentives idea to be as appealing as it once was. Uni is already just below DAI in terms of liquidity, so no real problem there in my view. It could be a double edged sword : we lose voting power and there is more liquidity for whales to dump. If the liquidity doubles overnight, it also kind of becomes harder to move the price, which could either be good or bad.
As I said, it's a tough decision. I'd really like it if the team could enlighten us a bit more on the roadmap. I think it's coming soon in any event. They said « in the coming months » in August, so it can't be that far. In any event, I believe V3 will make Sushiswap and other DEXes obsolete for a while.
You have the right to your own opinion, but please don't be so rude here. There's no conspiracy. We're just trying to figure out what's good for the Unicorn.
I'm a small holder/buyer myself, and an UNI LP dealing with impermanent loss at this time. That being said, I'm still unsure of what I should vote. On one side, many DEXes are trying to dethrone Uniswap at the same time. One of DeFi's biggest innovator, Andre Cronje (yEarn fame) just (today) teamed up with Sushiswap to compete with Uni and bring the forked Uniswap V2 code to another level (introduce options, etc.) On the other side, Uni has networks effects playing in its favor and doesn't seem to be immediately in danger. (Also, it pays LPs 0.3% instead of 0.25% for Sushi, which turned on its fee switch)
You have the right to your own opinion, but please don't be so rude here. There's no conspiracy. We're just trying to figure out what's good for the Unicorn.
I'm a small holder/buyer myself, and an UNI LP dealing with impermanent loss at this time. That being said, I'm still unsure of what I should vote. On one side, many DEXes are trying to dethrone Uniswap at the same time. One of DeFi's biggest innovator, Andre Cronje (yEarn fame) just (today) teamed up with Sushiswap to compete with Uni and bring the forked Uniswap V2 code to another level (introduce options, etc.) On the other side, Uni has networks effects playing in its favor and doesn't seem to be immediately in danger. (Also, it pays LPs 0.3% instead of 0.25% for Sushi, which turned on its fee switch)
In my view, we should start incentivizing end users (client-side mining, find a way to incentivize swap). It would be less costly than liquidity mining and have good distribution effects. It could be run in parallel to the LM campaign.
We are all waiting for V3 to land and during that time, I think it's best to play it safe. Now, I would have reduced the budget of the second LM campaign to something like a third of what it was, not half... but that's what we get to vote on.
What makes UNI have such weak performance in the market, which is quite opposite to its dominant position in DEX? I used to have the same view with you, that selling pressure from the liquidity mining is the main reason. Actually, that's maybe not the truth.
As a governance token, the core value of UNI should be shown its power to make more optimizations on the ecosystems and communities. Whenever we can use this power by passing a proposal to make some changes, even it's not a perfect one, it will still be a strong positive message to the market to say that UNI works, Uniswap community governance works.
What makes UNI have such weak performance in the market, which is quite opposite to its dominant position in DEX? I used to have the same view with you, that selling pressure from the liquidity mining is the main reason. Actually, that's maybe not the truth.
As a governance token, the core value of UNI should be shown its power to make more optimizations on the ecosystems and communities. Whenever we can use this power by passing a proposal to make some changes, even it's not a perfect one, it will still be a strong positive message to the market to say that UNI works, Uniswap community governance works.
To be honest, I was quite upset about the chaos of the community governance process. Even tried to use some radical ways to push it ahead. After dive deep in the governance process, I know that I should have more patience and respect, especially to those who truly working hard to make contributions to the whole community.
We are quite close to the first community proposal come into live. Time will tell!
Totally agree with what you mentioned. :+1:
Yes but AFAICT Sushi is chipping the pairs that are not targeted by this vote
Their token had a surge in price because of the Andreswap announcements and such, making the LPing much more profitable.
This is a good flag. Perhaps if we are going to incentivize any pairs, if should be the pairs that we are not currently the DEX market leader. If this is the strategy we would want to target the following pairs with liquidity mining incentives: CRV-ETH, AAVE-ETH, UMA-ETH, COMP-ETH, SNX-ETH, BAND-ETH, YFI-ETH.
So you didnt disprove any of the statements I made. Its not my opinion, its a FACT what I stated because we have just finished doing it. You are trying to manipulate the governance through this gibberish.
I will vote NO so should any holder of UNI as this is pure betrayal. You want to distribute more UNI to the already rich beyond their wildest dreams at the expense of the small UNI holder. Once again - Shame on you for promoting such a blatant cash grab.
So you didnt disprove any of the statements I made. Its not my opinion, its a FACT what I stated because we have just finished doing it. You are trying to manipulate the governance through this gibberish.
I will vote NO so should any holder of UNI as this is pure betrayal. You want to distribute more UNI to the already rich beyond their wildest dreams at the expense of the small UNI holder. Once again - Shame on you for promoting such a blatant cash grab.
There is a testament on the voting page of the cash grabs attempts of Dharma and co. and I sincerely hope the Uniswap community will rally once more and do the same again.
To me it makes a lot of sense for Uniswap to compete for liquidity and governance integration with all the blue chip DeFi protocols. These have huge growth potential, and also second order effects like bringing in active governance participants and encouraging those token holders to integrate more deeply with Uniswap at the technical/protocol layers.
A couple observations here:
See, this is exactly what I am talking about.
You yourself are violating the community guidelines.
The guidelines state one should avoid :
See, this is exactly what I am talking about.
You yourself are violating the community guidelines.
The guidelines state one should avoid :
How did you last comment contribute to the conversation? To the arguments I have outlined for you there? No answers were provided, no counter arguments, anything of that sort. Just plain knee-jerk reaction. I fail to see it so I shall flag your response to the comment as I think it violates the rule.
Great job. :+1: Noticed that you have about 1M delegated votes. Do you have any plan to reach the threshold of submit an on chain voting?
How about distribute UNI to delegated UNI holders? https://gov.uniswap.org/t/temperature-check-distribute-uni-to-delegated-uni-holder/9049
Are you sure stealing is a fitting description? From my viewpoint its an open discussion about the future usage of uni. Its open and everyone will be heared. You were only asked to be more polite in conversation. I would at least consider this.
Yes, I'll give you that. Andre is talented, but he has a weird vibe. He tried to become a Uni politician and he tried to make the Dharma vote pass, yes. He failed at both.
Actually, if the APY is better for LPs now that the campaign has stopped, maybe miners actually cared about holding some of the UNI they mined. Otherwise, it's hard to explain how they would favor lower APY.
Yes, I'll give you that. Andre is talented, but he has a weird vibe. He tried to become a Uni politician and he tried to make the Dharma vote pass, yes. He failed at both.
Actually, if the APY is better for LPs now that the campaign has stopped, maybe miners actually cared about holding some of the UNI they mined. Otherwise, it's hard to explain how they would favor lower APY.
BTW I don't find the UNI-ETH LP incentives idea to be as appealing as it once was. Uni is already just below DAI in terms of liquidity, so no real problem there in my view. It could be a double edged sword : we lose voting power and there is more liquidity for whales to dump. If the liquidity doubles overnight, it also kind of becomes harder to move the price, which could either be good or bad.
As I said, it's a tough decision. I'd really like it if the team could enlighten us a bit more on the roadmap. I think it's coming soon in any event. They said « in the coming months » in August, so it can't be that far. In any event, I believe V3 will make Sushiswap and other DEXes obsolete for a while.
You have the right to your own opinion, but please don't be so rude here. There's no conspiracy. We're just trying to figure out what's good for the Unicorn.
I'm a small holder/buyer myself, and an UNI LP dealing with impermanent loss at this time. That being said, I'm still unsure of what I should vote. On one side, many DEXes are trying to dethrone Uniswap at the same time. One of DeFi's biggest innovator, Andre Cronje (yEarn fame) just (today) teamed up with Sushiswap to compete with Uni and bring the forked Uniswap V2 code to another level (introduce options, etc.) On the other side, Uni has networks effects playing in its favor and doesn't seem to be immediately in danger. (Also, it pays LPs 0.3% instead of 0.25% for Sushi, which turned on its fee switch)
You have the right to your own opinion, but please don't be so rude here. There's no conspiracy. We're just trying to figure out what's good for the Unicorn.
I'm a small holder/buyer myself, and an UNI LP dealing with impermanent loss at this time. That being said, I'm still unsure of what I should vote. On one side, many DEXes are trying to dethrone Uniswap at the same time. One of DeFi's biggest innovator, Andre Cronje (yEarn fame) just (today) teamed up with Sushiswap to compete with Uni and bring the forked Uniswap V2 code to another level (introduce options, etc.) On the other side, Uni has networks effects playing in its favor and doesn't seem to be immediately in danger. (Also, it pays LPs 0.3% instead of 0.25% for Sushi, which turned on its fee switch)
In my view, we should start incentivizing end users (client-side mining, find a way to incentivize swap). It would be less costly than liquidity mining and have good distribution effects. It could be run in parallel to the LM campaign.
We are all waiting for V3 to land and during that time, I think it's best to play it safe. Now, I would have reduced the budget of the second LM campaign to something like a third of what it was, not half... but that's what we get to vote on.
What makes UNI have such weak performance in the market, which is quite opposite to its dominant position in DEX? I used to have the same view with you, that selling pressure from the liquidity mining is the main reason. Actually, that's maybe not the truth.
As a governance token, the core value of UNI should be shown its power to make more optimizations on the ecosystems and communities. Whenever we can use this power by passing a proposal to make some changes, even it's not a perfect one, it will still be a strong positive message to the market to say that UNI works, Uniswap community governance works.
What makes UNI have such weak performance in the market, which is quite opposite to its dominant position in DEX? I used to have the same view with you, that selling pressure from the liquidity mining is the main reason. Actually, that's maybe not the truth.
As a governance token, the core value of UNI should be shown its power to make more optimizations on the ecosystems and communities. Whenever we can use this power by passing a proposal to make some changes, even it's not a perfect one, it will still be a strong positive message to the market to say that UNI works, Uniswap community governance works.
To be honest, I was quite upset about the chaos of the community governance process. Even tried to use some radical ways to push it ahead. After dive deep in the governance process, I know that I should have more patience and respect, especially to those who truly working hard to make contributions to the whole community.
We are quite close to the first community proposal come into live. Time will tell!
Totally agree with what you mentioned. :+1:
Yes but AFAICT Sushi is chipping the pairs that are not targeted by this vote
Their token had a surge in price because of the Andreswap announcements and such, making the LPing much more profitable.
This is a good flag. Perhaps if we are going to incentivize any pairs, if should be the pairs that we are not currently the DEX market leader. If this is the strategy we would want to target the following pairs with liquidity mining incentives: CRV-ETH, AAVE-ETH, UMA-ETH, COMP-ETH, SNX-ETH, BAND-ETH, YFI-ETH.
So you didnt disprove any of the statements I made. Its not my opinion, its a FACT what I stated because we have just finished doing it. You are trying to manipulate the governance through this gibberish.
I will vote NO so should any holder of UNI as this is pure betrayal. You want to distribute more UNI to the already rich beyond their wildest dreams at the expense of the small UNI holder. Once again - Shame on you for promoting such a blatant cash grab.
So you didnt disprove any of the statements I made. Its not my opinion, its a FACT what I stated because we have just finished doing it. You are trying to manipulate the governance through this gibberish.
I will vote NO so should any holder of UNI as this is pure betrayal. You want to distribute more UNI to the already rich beyond their wildest dreams at the expense of the small UNI holder. Once again - Shame on you for promoting such a blatant cash grab.
There is a testament on the voting page of the cash grabs attempts of Dharma and co. and I sincerely hope the Uniswap community will rally once more and do the same again.
To me it makes a lot of sense for Uniswap to compete for liquidity and governance integration with all the blue chip DeFi protocols. These have huge growth potential, and also second order effects like bringing in active governance participants and encouraging those token holders to integrate more deeply with Uniswap at the technical/protocol layers.
A couple observations here:
Yes but AFAICT Sushi is chipping the pairs that are not targeted by this vote
Their token had a surge in price because of the Andreswap announcements and such, making the LPing much more profitable.
We need to come up with a more dynamic way and more useful way to subsidize liquidity until V3 and hopefully L2 give us back the edge.
Sushiswap has a weekly menu-based approach where they propose and then vote on pairs.
I don't have a million votes in my name or more, so I can't really spearhead proposals here but... Why are we not more intelligent in our approach ? We have the data, we know what's happening. Key DeFi pairs are being targeted and liquidity is moving. We could come up with something more thoughtful and based on data.
P.S.: Reminder that SUSHI has a vesting period on 2/3 of their rewards.
I don't fully agree with that: It's certainly the leader's role to improve performances, by making things faster and more efficient. But it's often the challengers' role to try different approaches, and to take the risk of failing with those in an attempt at becoming leader.
And for a leader, this second category of innovation can be used as free R&D, it's only a matter of being reactive enough.
Sorry for multi-posting. I snapshotted today's volume and liquidity for Uni and Sushi (at 1pm EST). I want to remind voters that Sushi is essentially waging some kind of guerilla war right now against Uniswap. It's targeting populaire DeFi pairs on a weekly basis and trying to make Sushi the default place to trade them. Sometimes it fails, sometimes it doesn't. The thing is, they might end up retaining LPs even after the subsidies stop !
The data shows that COMP and UMA (both low volume pairs) at least today have better liq and better volume at Sushi. For AAVE and SNX (higher volume than COMP and UMA), Sushi has better liquidity but it doesn't have (yet ?) better volume. For AAVE and SNX we can say network effects are working in Uniswap's favor. (It could also have to do with Uniswap stables liquidity as a lot of people swap from token to stables)
Sorry for multi-posting. I snapshotted today's volume and liquidity for Uni and Sushi (at 1pm EST). I want to remind voters that Sushi is essentially waging some kind of guerilla war right now against Uniswap. It's targeting populaire DeFi pairs on a weekly basis and trying to make Sushi the default place to trade them. Sometimes it fails, sometimes it doesn't. The thing is, they might end up retaining LPs even after the subsidies stop !
The data shows that COMP and UMA (both low volume pairs) at least today have better liq and better volume at Sushi. For AAVE and SNX (higher volume than COMP and UMA), Sushi has better liquidity but it doesn't have (yet ?) better volume. For AAVE and SNX we can say network effects are working in Uniswap's favor. (It could also have to do with Uniswap stables liquidity as a lot of people swap from token to stables)
I hate to be the alarmist guy, so please draw your own conclusions here. I don't know if Sushi can afford to print tokens at the same pace, but keep in mind Sushi friends could be artificially supporting Sushi token price right now (and thus Sushi LP APY) by market buying regularly.
See the data
Disclaimer : I'm not a data scientist
This idea could work. I could see us delegating someone from the dev team the task to swap UNI to wBTC and ETH at random times during a time span, and then LPing. (Please just don't do it at once at a planned date, because LPs will all pull their liquidity).
This idea becomes even more appealing when you think about the APY it can provide for the treasury.
This idea could work. I could see us delegating someone from the dev team the task to swap UNI to wBTC and ETH at random times during a time span, and then LPing. (Please just don't do it at once at a planned date, because LPs will all pull their liquidity).
This idea becomes even more appealing when you think about the APY it can provide for the treasury.
The disadvantage here is that you are competing with your very own LPs. But seeing as liquidity mining brings down everyone's APY (when LPs suddenly flock en masse), I don't think this is a real disadvantage over LM
Another novel way of incentivizing use would be Swapmining, which I discuss here.
PS. We never really discussed vesting UNI LM rewards. Sushi does it (2/3 = vested, don't know the exact details).
Pure and utter censorship. I guess that speaks volumes for being willfully unwilling to lead a meaningful conversation and to censor opposing arguments and views.
Also, here is a zoom out including swaps up to 500 ETH. 
Over the last couple of days we have seen liquidity increase on pairs so it is a good sign that liquidity is stabilizing and increasing again. For example, the WBTC-ETH liquidity has increased from 145 million (11/26) to 199 million (11/28) flattening the slippage curve. You can now swap up to $15,000 of WBTC-ETH with only 0.01% slippage.
Thanks for hosting the Call once again, @monet-supply .
I appreciated hearing new participants in this second call and found the ambiance/atmosphere/tone was better, which is normal.
Thanks for hosting the Call once again, @monet-supply .
I appreciated hearing new participants in this second call and found the ambiance/atmosphere/tone was better, which is normal.
I am not yet decided on the vote. As many here (and in the call, @mikedemarais and @internal123456 ) have already pointed out, it's a very big expense and the effects seem to be limited. At the same time, our competition has the advantage of moving faster and a little defense probably wouldn't hurt. Ideally, I think something like 1/4th or at most 1/3th of the budget (vs the first LM era) would be enough, but that's not what we'll be voting on (we'll be voting on distributing 50%).
In conclusion, it appears to me that we should start considering other ways of distributing UNI. As it was pointed out toward the end of the call, liquidity mining (LM) programs are often targeted by big funds. Thus we end up distributing a lot of UNI to the already rich. Liquidity mining also forgets the other part of the equation, and that is actual volume. I.e. liquidity mining incentivizes primarily TVL but not the other ingredient or metric of success that is volume.
Hence we could start thinking about ways to incentivize swapping by simply distributing UNI to those who drive the volume, aka Uniswap swappers ! I think that would be pretty crazy and be one way to distribute fairly. It would also be great publicity for our beloved platform, another publicity stunt if you will :fire:.
(P.S. Speaking of competition, and as a heads up to the community, Andre Cronje is about to release Deriswap. It remains to be seen if it's going to be a direct competitor to Uniswap. What he did say in an interview yesterday is that Deriswap is essentially 150 lines of code on top of Uniswap. So, IMO, it could be a fork, or it could plug-in into Uniswap and use its liquidities, kind of like what AlphaHomora is doing. We will know very soon in any case.)
The liquidity campain incentivizes short sellers to pummel it along with the farmers and release more of UNI into circulation for little benefit. Its a pure cash grab just like Dharma´s proposal.
Great work! I was thinking that it would be good to wait a month or two before considering to renew the liquidity mining program to see if the protocol is seeing the flywheel effect where transaction volume (and associated fees) begets more liquidity, and more volume, etc. Current 1 year fee apr on the pairs in the initial LMP are currently between 19 - 47%. I would imagine at these rates liquidity will flow in over time without additional incentives.
Thanks for the comments @mosayeri. Listening to the community call, and reading the threads, it appears that the rough consensus is that the first "Success Criteria" that is most important at this time is reducing slippage on the top trading pairs. Based on @Mr_Po's post above, 28% of WBTC trading have greater than 0.01% slippage which is far worse than USDT(7.5%), Dai(14%), and USDC(14%). Looking at the current slippage curve for each pair, it appears that bringing the slippage down for WBTC, Dai, and USDC pairs to parity with USDT might be a good first milestone to improve Uniswap's product for whale traders. However, I don't think we should be in a rush and recommend waiting a month or two to analyze the market and make sure we are making a well informed data driven decision on the size of the next liquidity mining program.
The second (Consensus check stage) poll is here https://snapshot.page/#/uniswap/proposal/QmcZGhUoTEGGQWMrEXBcCwCenjSQRTJdhta4JYyVEWnN24
Snapshot is not the official vote platform, there will be a final vote. Refer to timeline in original post.
So, the snapshot vote passed, is there other voting necessary? When we can realistically expect the reward program to continue?
Exactly the same view with you. But we need to focus on the mostly consensus thought of incentives based on the previous way to make it real. Even it may not be the best.
I guess I'm just really struggling with spending this amount of money to bring slippage down on four pairs for very large purchases that make up a small percentage of Uniswap's transaction volume.
I really think we should take the next month and continue to gather data, discuss alternatives, cost/benefit ratios, and overarching goals and objectives of the liquidity mining program so we can make a well informed decision.
I completely agree with this sentiment. Save our bullets for v3.
tBTC is great, but I think still too unproven and does not have enough traction in the market yet. Hopefully it will get there.
Yes but AFAICT Sushi is chipping the pairs that are not targeted by this vote
Their token had a surge in price because of the Andreswap announcements and such, making the LPing much more profitable.
We need to come up with a more dynamic way and more useful way to subsidize liquidity until V3 and hopefully L2 give us back the edge.
Sushiswap has a weekly menu-based approach where they propose and then vote on pairs.
I don't have a million votes in my name or more, so I can't really spearhead proposals here but... Why are we not more intelligent in our approach ? We have the data, we know what's happening. Key DeFi pairs are being targeted and liquidity is moving. We could come up with something more thoughtful and based on data.
P.S.: Reminder that SUSHI has a vesting period on 2/3 of their rewards.
I don't fully agree with that: It's certainly the leader's role to improve performances, by making things faster and more efficient. But it's often the challengers' role to try different approaches, and to take the risk of failing with those in an attempt at becoming leader.
And for a leader, this second category of innovation can be used as free R&D, it's only a matter of being reactive enough.
Sorry for multi-posting. I snapshotted today's volume and liquidity for Uni and Sushi (at 1pm EST). I want to remind voters that Sushi is essentially waging some kind of guerilla war right now against Uniswap. It's targeting populaire DeFi pairs on a weekly basis and trying to make Sushi the default place to trade them. Sometimes it fails, sometimes it doesn't. The thing is, they might end up retaining LPs even after the subsidies stop !
The data shows that COMP and UMA (both low volume pairs) at least today have better liq and better volume at Sushi. For AAVE and SNX (higher volume than COMP and UMA), Sushi has better liquidity but it doesn't have (yet ?) better volume. For AAVE and SNX we can say network effects are working in Uniswap's favor. (It could also have to do with Uniswap stables liquidity as a lot of people swap from token to stables)
Sorry for multi-posting. I snapshotted today's volume and liquidity for Uni and Sushi (at 1pm EST). I want to remind voters that Sushi is essentially waging some kind of guerilla war right now against Uniswap. It's targeting populaire DeFi pairs on a weekly basis and trying to make Sushi the default place to trade them. Sometimes it fails, sometimes it doesn't. The thing is, they might end up retaining LPs even after the subsidies stop !
The data shows that COMP and UMA (both low volume pairs) at least today have better liq and better volume at Sushi. For AAVE and SNX (higher volume than COMP and UMA), Sushi has better liquidity but it doesn't have (yet ?) better volume. For AAVE and SNX we can say network effects are working in Uniswap's favor. (It could also have to do with Uniswap stables liquidity as a lot of people swap from token to stables)
I hate to be the alarmist guy, so please draw your own conclusions here. I don't know if Sushi can afford to print tokens at the same pace, but keep in mind Sushi friends could be artificially supporting Sushi token price right now (and thus Sushi LP APY) by market buying regularly.
See the data
Disclaimer : I'm not a data scientist
This idea could work. I could see us delegating someone from the dev team the task to swap UNI to wBTC and ETH at random times during a time span, and then LPing. (Please just don't do it at once at a planned date, because LPs will all pull their liquidity).
This idea becomes even more appealing when you think about the APY it can provide for the treasury.
This idea could work. I could see us delegating someone from the dev team the task to swap UNI to wBTC and ETH at random times during a time span, and then LPing. (Please just don't do it at once at a planned date, because LPs will all pull their liquidity).
This idea becomes even more appealing when you think about the APY it can provide for the treasury.
The disadvantage here is that you are competing with your very own LPs. But seeing as liquidity mining brings down everyone's APY (when LPs suddenly flock en masse), I don't think this is a real disadvantage over LM
Another novel way of incentivizing use would be Swapmining, which I discuss here.
PS. We never really discussed vesting UNI LM rewards. Sushi does it (2/3 = vested, don't know the exact details).
Pure and utter censorship. I guess that speaks volumes for being willfully unwilling to lead a meaningful conversation and to censor opposing arguments and views.
Also, here is a zoom out including swaps up to 500 ETH.
Over the last couple of days we have seen liquidity increase on pairs so it is a good sign that liquidity is stabilizing and increasing again. For example, the WBTC-ETH liquidity has increased from 145 million (11/26) to 199 million (11/28) flattening the slippage curve. You can now swap up to $15,000 of WBTC-ETH with only 0.01% slippage.
Thanks for hosting the Call once again, @monet-supply .
I appreciated hearing new participants in this second call and found the ambiance/atmosphere/tone was better, which is normal.
Thanks for hosting the Call once again, @monet-supply .
I appreciated hearing new participants in this second call and found the ambiance/atmosphere/tone was better, which is normal.
I am not yet decided on the vote. As many here (and in the call, @mikedemarais and @internal123456 ) have already pointed out, it's a very big expense and the effects seem to be limited. At the same time, our competition has the advantage of moving faster and a little defense probably wouldn't hurt. Ideally, I think something like 1/4th or at most 1/3th of the budget (vs the first LM era) would be enough, but that's not what we'll be voting on (we'll be voting on distributing 50%).
In conclusion, it appears to me that we should start considering other ways of distributing UNI. As it was pointed out toward the end of the call, liquidity mining (LM) programs are often targeted by big funds. Thus we end up distributing a lot of UNI to the already rich. Liquidity mining also forgets the other part of the equation, and that is actual volume. I.e. liquidity mining incentivizes primarily TVL but not the other ingredient or metric of success that is volume.
Hence we could start thinking about ways to incentivize swapping by simply distributing UNI to those who drive the volume, aka Uniswap swappers ! I think that would be pretty crazy and be one way to distribute fairly. It would also be great publicity for our beloved platform, another publicity stunt if you will :fire:.
(P.S. Speaking of competition, and as a heads up to the community, Andre Cronje is about to release Deriswap. It remains to be seen if it's going to be a direct competitor to Uniswap. What he did say in an interview yesterday is that Deriswap is essentially 150 lines of code on top of Uniswap. So, IMO, it could be a fork, or it could plug-in into Uniswap and use its liquidities, kind of like what AlphaHomora is doing. We will know very soon in any case.)
The liquidity campain incentivizes short sellers to pummel it along with the farmers and release more of UNI into circulation for little benefit. Its a pure cash grab just like Dharma´s proposal.
Great work! I was thinking that it would be good to wait a month or two before considering to renew the liquidity mining program to see if the protocol is seeing the flywheel effect where transaction volume (and associated fees) begets more liquidity, and more volume, etc. Current 1 year fee apr on the pairs in the initial LMP are currently between 19 - 47%. I would imagine at these rates liquidity will flow in over time without additional incentives.
Thanks for the comments @mosayeri. Listening to the community call, and reading the threads, it appears that the rough consensus is that the first "Success Criteria" that is most important at this time is reducing slippage on the top trading pairs. Based on @Mr_Po's post above, 28% of WBTC trading have greater than 0.01% slippage which is far worse than USDT(7.5%), Dai(14%), and USDC(14%). Looking at the current slippage curve for each pair, it appears that bringing the slippage down for WBTC, Dai, and USDC pairs to parity with USDT might be a good first milestone to improve Uniswap's product for whale traders. However, I don't think we should be in a rush and recommend waiting a month or two to analyze the market and make sure we are making a well informed data driven decision on the size of the next liquidity mining program.
The second (Consensus check stage) poll is here https://snapshot.page/#/uniswap/proposal/QmcZGhUoTEGGQWMrEXBcCwCenjSQRTJdhta4JYyVEWnN24
Snapshot is not the official vote platform, there will be a final vote. Refer to timeline in original post.
So, the snapshot vote passed, is there other voting necessary? When we can realistically expect the reward program to continue?
Exactly the same view with you. But we need to focus on the mostly consensus thought of incentives based on the previous way to make it real. Even it may not be the best.
I guess I'm just really struggling with spending this amount of money to bring slippage down on four pairs for very large purchases that make up a small percentage of Uniswap's transaction volume.
I really think we should take the next month and continue to gather data, discuss alternatives, cost/benefit ratios, and overarching goals and objectives of the liquidity mining program so we can make a well informed decision.
I completely agree with this sentiment. Save our bullets for v3.
tBTC is great, but I think still too unproven and does not have enough traction in the market yet. Hopefully it will get there.
I think its a good idea, but the short answer is - governance here is too dysfunctional at the moment and we are still trying to agree on simpler things before tackling more difficult decisions :)
Something else that gives me pause on immediately restarting the liquidity mining program is the new user growth rate was already on an exponential growth trajectory prior to the September 18th launch of the LMP which calls into question how much of the user/volume growth is attributed to the LMP. 
In contrast, here is the user growth trends for Compound, and it is very clear when Compound partnered with Coinbase in mid October on the rewards program providing educational lessons and COMP as a reward, new users skyrocketed. I wonder if Coinbase would partner with Uniswap on a similar program?
With Vampire attack and with help of big LP (Liquidiry Providers) Uniswap is still the biggest DEX (Decentralized Exchange) in almost every metric.
There is no need for any new Liquidity Incentive Plan at the moment!
I have to say I've been a proponent of 50% subsidies all this time, but now I'm back to being undecided...
In any event, a BIG thank you to the community members here who actually provided precious data to make their point !
I have to say I've been a proponent of 50% subsidies all this time, but now I'm back to being undecided...
In any event, a BIG thank you to the community members here who actually provided precious data to make their point !
ATM, Gauntlet is nowhere to be seen. They were so quick to say that they were going to only work on "quantitative" stuff (yet they were the first to help Dharma...), but I contacted them on Twitter about their upcoming analysis, and no reply...
I am curious why we are just considering staying with the four original liquidity pools and not evaluating whether it will be more beneficial to distribute the liquidity mining rewards to more trading pairs. I took the last 7 days liquidity and trading volume from many of the popular pairs, and i believe a strong argument can be made to evenly distribute mining rewards based on liquidity provided to a larger list of community "green listed" pairs.
I do not think the UNI community needs another liquidity program as it hands out coins from the UNI treasury for no specific reason.....there is plenty of liquidity already. Why do we need to "buy" it with 10M UNI? That´s a very expensive investment if you ask me. What does the UNI holder get from this? Nothing....
I will vote NO.
For a platform that prides itself on serving the long tail of assets, I think it may be more beneficial to rethink the liquidity mining program going forward to lower the slippage on a larger basket of frequently traded pairs. Here is the current slippage on purchases of 1, 5, and 10 ETH for each trading pair.
a few days ago Sushiswap TVL almost passed Uniswap TVL... today Uniswap has double the TVL in Sushiswap... I guess we don't need farming incentives after all
let Sushiswap burn their treasury... they are spending 15% of their total token supply every month to perform this vampire attack and they are failing to takeover Uniswap TVL not to mention its volume.
Calculate the jumps. Be sure its not a stable relation. (150% swing potential)
ETH/BTC is actually one of the most correlated pair of assets so it has one of the lowest risk of impermanent loss.
In comparison to ETH/USD it is a lot more correlated though, particularly over the long term. LPing in ETH/USD is more risky.
I think its a good idea, but the short answer is - governance here is too dysfunctional at the moment and we are still trying to agree on simpler things before tackling more difficult decisions :)
Something else that gives me pause on immediately restarting the liquidity mining program is the new user growth rate was already on an exponential growth trajectory prior to the September 18th launch of the LMP which calls into question how much of the user/volume growth is attributed to the LMP.
In contrast, here is the user growth trends for Compound, and it is very clear when Compound partnered with Coinbase in mid October on the rewards program providing educational lessons and COMP as a reward, new users skyrocketed. I wonder if Coinbase would partner with Uniswap on a similar program?
With Vampire attack and with help of big LP (Liquidiry Providers) Uniswap is still the biggest DEX (Decentralized Exchange) in almost every metric.
There is no need for any new Liquidity Incentive Plan at the moment!
I have to say I've been a proponent of 50% subsidies all this time, but now I'm back to being undecided...
In any event, a BIG thank you to the community members here who actually provided precious data to make their point !
I have to say I've been a proponent of 50% subsidies all this time, but now I'm back to being undecided...
In any event, a BIG thank you to the community members here who actually provided precious data to make their point !
ATM, Gauntlet is nowhere to be seen. They were so quick to say that they were going to only work on "quantitative" stuff (yet they were the first to help Dharma...), but I contacted them on Twitter about their upcoming analysis, and no reply...
I am curious why we are just considering staying with the four original liquidity pools and not evaluating whether it will be more beneficial to distribute the liquidity mining rewards to more trading pairs. I took the last 7 days liquidity and trading volume from many of the popular pairs, and i believe a strong argument can be made to evenly distribute mining rewards based on liquidity provided to a larger list of community "green listed" pairs.
I do not think the UNI community needs another liquidity program as it hands out coins from the UNI treasury for no specific reason.....there is plenty of liquidity already. Why do we need to "buy" it with 10M UNI? That´s a very expensive investment if you ask me. What does the UNI holder get from this? Nothing....
I will vote NO.
For a platform that prides itself on serving the long tail of assets, I think it may be more beneficial to rethink the liquidity mining program going forward to lower the slippage on a larger basket of frequently traded pairs. Here is the current slippage on purchases of 1, 5, and 10 ETH for each trading pair.
a few days ago Sushiswap TVL almost passed Uniswap TVL... today Uniswap has double the TVL in Sushiswap... I guess we don't need farming incentives after all
let Sushiswap burn their treasury... they are spending 15% of their total token supply every month to perform this vampire attack and they are failing to takeover Uniswap TVL not to mention its volume.
Calculate the jumps. Be sure its not a stable relation. (150% swing potential)
ETH/BTC is actually one of the most correlated pair of assets so it has one of the lowest risk of impermanent loss.
In comparison to ETH/USD it is a lot more correlated though, particularly over the long term. LPing in ETH/USD is more risky.
I have to oppose, here some reasons why they are not overincentivized. a. BTC and ETH are the motherships of crypto econcomy. They offer the highest security for everyone, most widespread network. Most trusted foundation. b. BTC and ETH are traded everywhere, much more than those nonsense tokens. The demand to trade is simply higher. c. For the HIGH risk of impermanent loss, we are underincentivized, even on WBTC Pools. BTC will move a lot due to halving. We are loosing money. And if you interact with uniswap you pay a lot of fees. d. Next door are higher ROI decentralized exchanges. Users follow profit. Market force.
You seem to like long posts and i have to say you go off target here and there. Of course uniswap should list every token users desire. Even complete nonsense token pairs. I never said we should stop it. Even if scam tokens can harm the image!! Just dont give any incentive on top.
Unicorn is all about governance, and governance is all about community involvement, and community involvement is about community inclusiveness, and community inclusiveness is all about community incentives, and community incentives borders on UNI circulation. A greater percentage of people have come to be actively involved in Unicorn governance through the airdrop and liquidity incentives, and this is what governance is all about...reward for loyalty. With more participation and loyalty from end-users, Uniswap will attain a high level of adoption that will in turn result in sustainable growth, UNI valuation will organically grow as a follow-on effect. Buy and burn CANNOT bring sustainable growth to UNI valuation and favour Unicorn.
I think it would be interesting to see what kind of an effect a penalty on the percentage of fees you will receive to act as a disincentive to leave a pool.
E.g. Whatever you provide into the pool you get 50% less in fees until you have been providing liquidity for at least x amount of time in the pool (perhaps 1 month to test initially).
I think it would be interesting to see what kind of an effect a penalty on the percentage of fees you will receive to act as a disincentive to leave a pool.
E.g. Whatever you provide into the pool you get 50% less in fees until you have been providing liquidity for at least x amount of time in the pool (perhaps 1 month to test initially).
Not only that but you can then be redistribute the other 50% either to:
A. Everyone else who has provided liquidity in the pool
or
B. Keep the other 50% for the UniSwap treasury which could use it to help finance liquidity mining programs and other incentives
if we reach a dangerous level of liquidity drain then we can activate the incentives... we might need the incentives or we might not... why the hurry? when (if) we need more liquidity we can always reactivate the incentive program
in the mean time let's enjoy seeing our competitors burn their treasuries trying to catch up with us
I'm heartened by the amount of liquidity and volume that remains on Uniswap, but I don't think we can be complacent either.
No serious trader/investor is going to want to sit with mUSD in their wallet for long, it inherits the risks of all the underlying stablecoins breaking peg. Pick the most trustworthy stablecoin (USDC imo) and incentivise that pool instead.
The thing is you, personally, don't get to decide if 19% APY is enough. It's all relative to what the market is offering. If a competitor offers twice that APY by way of subsidizing, well, liquidity providers will more or less slowly flock in that direction. It's the way things work in a market. So Uniswap is better off subsidizing a bit than not subsidizing at all. Why ? Because with decentralized governance, we move much more slowly (as we can see right now), than say, competition that have a "Chef" approach (centralized, rotating, planned subsidies).
Again, 50% subsidies feels like a good compromise right now. It feels more sustainable. We should have had this whole discussion way earlier. It will be exciting, in the future, to come up with changes to the pairs and other new tokenomics stuff. But right now, we are a bit in a rush even though, as we've seen, no incentives is not catastrophic.
1 - We can't count on V3 being soon. It's speculation at this point. It could be Q4 2021 for all we know. Also, V2 liquidity will easily migrate to V3 as it was the case for V1. So I don't understand the point you're making here.
2 - The danger of a liquidity drain is real. There is big capital at work behind the clones/vampire attacks. Funders with very deep pockets (CEXes) could pump more money into it and support a floor price for the competitor's token and make it seem sustainable or more attractive. Yeah, it does look are burning all their matches at once. But to me, that only means we shouldn't let our guard down during this time.
Is this meant to be a serious proposal? Reward a market with $1400 volume? Seems nonsensical. https://info.uniswap.org/pair/0xfa28af6be3649e90ed76b8269db65b236f716fbe
I have to oppose, here some reasons why they are not overincentivized. a. BTC and ETH are the motherships of crypto econcomy. They offer the highest security for everyone, most widespread network. Most trusted foundation. b. BTC and ETH are traded everywhere, much more than those nonsense tokens. The demand to trade is simply higher. c. For the HIGH risk of impermanent loss, we are underincentivized, even on WBTC Pools. BTC will move a lot due to halving. We are loosing money. And if you interact with uniswap you pay a lot of fees. d. Next door are higher ROI decentralized exchanges. Users follow profit. Market force.
You seem to like long posts and i have to say you go off target here and there. Of course uniswap should list every token users desire. Even complete nonsense token pairs. I never said we should stop it. Even if scam tokens can harm the image!! Just dont give any incentive on top.
Unicorn is all about governance, and governance is all about community involvement, and community involvement is about community inclusiveness, and community inclusiveness is all about community incentives, and community incentives borders on UNI circulation. A greater percentage of people have come to be actively involved in Unicorn governance through the airdrop and liquidity incentives, and this is what governance is all about...reward for loyalty. With more participation and loyalty from end-users, Uniswap will attain a high level of adoption that will in turn result in sustainable growth, UNI valuation will organically grow as a follow-on effect. Buy and burn CANNOT bring sustainable growth to UNI valuation and favour Unicorn.
I think it would be interesting to see what kind of an effect a penalty on the percentage of fees you will receive to act as a disincentive to leave a pool.
E.g. Whatever you provide into the pool you get 50% less in fees until you have been providing liquidity for at least x amount of time in the pool (perhaps 1 month to test initially).
I think it would be interesting to see what kind of an effect a penalty on the percentage of fees you will receive to act as a disincentive to leave a pool.
E.g. Whatever you provide into the pool you get 50% less in fees until you have been providing liquidity for at least x amount of time in the pool (perhaps 1 month to test initially).
Not only that but you can then be redistribute the other 50% either to:
A. Everyone else who has provided liquidity in the pool
or
B. Keep the other 50% for the UniSwap treasury which could use it to help finance liquidity mining programs and other incentives
if we reach a dangerous level of liquidity drain then we can activate the incentives... we might need the incentives or we might not... why the hurry? when (if) we need more liquidity we can always reactivate the incentive program
in the mean time let's enjoy seeing our competitors burn their treasuries trying to catch up with us
I'm heartened by the amount of liquidity and volume that remains on Uniswap, but I don't think we can be complacent either.
No serious trader/investor is going to want to sit with mUSD in their wallet for long, it inherits the risks of all the underlying stablecoins breaking peg. Pick the most trustworthy stablecoin (USDC imo) and incentivise that pool instead.
The thing is you, personally, don't get to decide if 19% APY is enough. It's all relative to what the market is offering. If a competitor offers twice that APY by way of subsidizing, well, liquidity providers will more or less slowly flock in that direction. It's the way things work in a market. So Uniswap is better off subsidizing a bit than not subsidizing at all. Why ? Because with decentralized governance, we move much more slowly (as we can see right now), than say, competition that have a "Chef" approach (centralized, rotating, planned subsidies).
Again, 50% subsidies feels like a good compromise right now. It feels more sustainable. We should have had this whole discussion way earlier. It will be exciting, in the future, to come up with changes to the pairs and other new tokenomics stuff. But right now, we are a bit in a rush even though, as we've seen, no incentives is not catastrophic.
1 - We can't count on V3 being soon. It's speculation at this point. It could be Q4 2021 for all we know. Also, V2 liquidity will easily migrate to V3 as it was the case for V1. So I don't understand the point you're making here.
2 - The danger of a liquidity drain is real. There is big capital at work behind the clones/vampire attacks. Funders with very deep pockets (CEXes) could pump more money into it and support a floor price for the competitor's token and make it seem sustainable or more attractive. Yeah, it does look are burning all their matches at once. But to me, that only means we shouldn't let our guard down during this time.
Is this meant to be a serious proposal? Reward a market with $1400 volume? Seems nonsensical. https://info.uniswap.org/pair/0xfa28af6be3649e90ed76b8269db65b236f716fbe
I'm heartened by the amount of liquidity and volume that remains on Uniswap, but I don't think we can be complacent either.
you are right about Sushiswap as a possible threat but you have to remember 2 things: 1- V3 is supposed to be soon so in the long term we don't need liquidity in V2 pools as long as we have enough right now 2- Sushiswap is paying 15% of their total governance tokens each month... they won't be able to continue like this for a long time
The thing is you, personally, don't get to decide if 19% APY is enough. It's all relative to what the market is offering. If a competitor offers twice that APY by way of subsidizing, well, liquidity providers will more or less slowly flock in that direction. It's the way things work in a market. So Uniswap is better off subsidizing a bit than not subsidizing at all. Why ? Because with decentralized governance, we move much more slowly (as we can see right now), than say, competition that have a "Chef" approach (centralized, rotating, planned subsidies).
Again, 50% subsidies feels like a good compromise right now. It feels more sustainable. We should have had this whole discussion way earlier. It will be exciting, in the future, to come up with changes to the pairs and other new tokenomics stuff. But right now, we are a bit in a rush even though, as we've seen, no incentives is not catastrophic.
PS : yes, I'm aware that APY could be lower than it is today under the first incentives era on the subsidized pairs.
There is no positive effect on giving more UNI to LP. You just dilute value of all UNI tokens in circulation and give opportunity to whales to buy more cheap UNI tokens. Better burn than giving $20+ mil per month with no value created for Uniswap. Today ETH-USDT LP earn 19% APY, who think that's not enough?
Well you have a point.
You do not loose your UNI when you vote. You are only required to pay for the blockchain transaction; both to to self delegate and vote.
if we reach a dangerous level of liquidity drain then we can activate the incentives
Or instead of having an incentive to increase liquidity, perhaps a disincentive to remove liquidity could be added?
Good point. I participated in a liquidity mining on Argent platform using UNI/ETH pair. Liquidity providers can actually plough back UNI into the system.
Unicorn and it's style of governance is relatively lofty and unique but still at its cradle stage, and therefore, needs greater level of participation from a wider community of end-users/contracts to shore it up to its preferred pride-of-place. UNI being released at this nascent stage means greater level of participation and interest in Unicorn governance. I support a second round of liquidity mining with 5M UNI during the pool period.
I believe with the level of governance and community command Unicorn is directly/indirectly representing and the dominance it's actively attaining towards, whale-like negative effects will have no wider ripple-effect on the ecosystem....no number of 🐋 whale can actively dominate an ocean..lol.
I'm heartened by the amount of liquidity and volume that remains on Uniswap, but I don't think we can be complacent either.
you are right about Sushiswap as a possible threat but you have to remember 2 things: 1- V3 is supposed to be soon so in the long term we don't need liquidity in V2 pools as long as we have enough right now 2- Sushiswap is paying 15% of their total governance tokens each month... they won't be able to continue like this for a long time
The thing is you, personally, don't get to decide if 19% APY is enough. It's all relative to what the market is offering. If a competitor offers twice that APY by way of subsidizing, well, liquidity providers will more or less slowly flock in that direction. It's the way things work in a market. So Uniswap is better off subsidizing a bit than not subsidizing at all. Why ? Because with decentralized governance, we move much more slowly (as we can see right now), than say, competition that have a "Chef" approach (centralized, rotating, planned subsidies).
Again, 50% subsidies feels like a good compromise right now. It feels more sustainable. We should have had this whole discussion way earlier. It will be exciting, in the future, to come up with changes to the pairs and other new tokenomics stuff. But right now, we are a bit in a rush even though, as we've seen, no incentives is not catastrophic.
PS : yes, I'm aware that APY could be lower than it is today under the first incentives era on the subsidized pairs.
There is no positive effect on giving more UNI to LP. You just dilute value of all UNI tokens in circulation and give opportunity to whales to buy more cheap UNI tokens. Better burn than giving $20+ mil per month with no value created for Uniswap. Today ETH-USDT LP earn 19% APY, who think that's not enough?
Well you have a point.
You do not loose your UNI when you vote. You are only required to pay for the blockchain transaction; both to to self delegate and vote.
if we reach a dangerous level of liquidity drain then we can activate the incentives
Or instead of having an incentive to increase liquidity, perhaps a disincentive to remove liquidity could be added?
Good point. I participated in a liquidity mining on Argent platform using UNI/ETH pair. Liquidity providers can actually plough back UNI into the system.
Unicorn and it's style of governance is relatively lofty and unique but still at its cradle stage, and therefore, needs greater level of participation from a wider community of end-users/contracts to shore it up to its preferred pride-of-place. UNI being released at this nascent stage means greater level of participation and interest in Unicorn governance. I support a second round of liquidity mining with 5M UNI during the pool period.
I believe with the level of governance and community command Unicorn is directly/indirectly representing and the dominance it's actively attaining towards, whale-like negative effects will have no wider ripple-effect on the ecosystem....no number of 🐋 whale can actively dominate an ocean..lol.
It is not just a feeling while some large LP whales were helping or became aware of this pre-proposal from "Monet-supply" it seems that the market factored in the fact that there would probably be more UNI rewards for LP to dump, and guess what? So too did the UNI price, from over 3.85 USD to ~3.45 USD. Thats why we need a combined proposal something that entices smaller holders that don't farm UNI liquidity not to dump. Perhaps something similar to that discussed here: https://snapshot.page/#/uniswap/proposal/QmWL6jSeYRKzEaS37GjV96b8sFpLFnmHJG84qvek2speAM
There's a couple things I would love to see changed before this is going to be passed.
Switch away from including the wBTC/ETH pool and move towards tBTC/ETH pool - it's the better, more trustless BTC on ETH
The current system struggled for volume on ETH/Stablecoin pairs (ETH/WBTC had nearly x2 more deposited in $ than the best performing one), half the incentive given to the ETH/BTC pool & increase it equally for the ETH/stablecoin pairs - this should act as a big incentive for people to reduce their worry about impermanent loss and/or missing out on any extremely wild price increases for ETH / BTC
It can serve real purposes :
Sure, pure degen/unsustainable farms use(d) « pool 2 » techniques, as it is widely known. But it doesn't necessarily mean that, if UNI was to subsidize a UNI-ETH LP with a factor of 1X (and not 10X+ as seen in degen farming schemes), UNI would become a ponzi.
It can serve real purposes :
Sure, pure degen/unsustainable farms use(d) « pool 2 » techniques, as it is widely known. But it doesn't necessarily mean that, if UNI was to subsidize a UNI-ETH LP with a factor of 1X (and not 10X+ as seen in degen farming schemes), UNI would become a ponzi.
Anyway, as we've said before, UNI-ETH incentivizing isn't very possible at this state because
A first step would be to propose a way to make LPed UNIs' vote count. This is a good idea in any case (UNI-ETH incentives or not), because currently a lot of UNI is barred from voting (more than 8 millions as I'm typing this !) The issue here is that this is a non-trivial upgrade that will need fresh code and fresh auditing (so, probably treasury funding).
This is well out of the scope of the proposal we are discussing. What we are proposing here is merely a way to extend incentives for a while, and during the second incentives era, governance will be able to come up with truly novel ideas.
Sounds good, seems fair. Gauntlet Network said they were doing the math behind current incentives to see if it was worth keeping them as is or reducing them. With a bit of luck, they'll be done soon and will be able to support this proposal...
DeFi is still in a heavy growth phase from a macro standpoint, hence I see a point in incentivizing pairs that are like entry doors to DeFi (stables, and WBTC especially these days.)
Sounds good, seems fair. Gauntlet Network said they were doing the math behind current incentives to see if it was worth keeping them as is or reducing them. With a bit of luck, they'll be done soon and will be able to support this proposal...
DeFi is still in a heavy growth phase from a macro standpoint, hence I see a point in incentivizing pairs that are like entry doors to DeFi (stables, and WBTC especially these days.)
Otherwise, we should start asking the UNI team to look into ways of making Uni LPers votes count. This should have been the priority. There are currently 7,992,501.71 UNIs in the UniV2 Eth-Uni pool that can't have a voice. This is absurd, as LPers show a high level of commitment to UNI by exposing themselves to potential impermanent/divergence loss.
Finding an appropriate answer to these questions is made quite hard by the fact that we don't have any visibility on when V3 can be expected, not even a rough estimate.
First of all, I think the general feeling (in the Discord server, but elsewhere too) was that incentives were given at a pace too high to be sustainable, creating a sell pressure that was detrimental to the community of UNI holders.
Gauntlet seemed to indicate that their analysis would be complete pretty soon. They also seemed to hesitate between keeping incentives as-is or reducing them.
First of all, I think the general feeling (in the Discord server, but elsewhere too) was that incentives were given at a pace too high to be sustainable, creating a sell pressure that was detrimental to the community of UNI holders.
Gauntlet seemed to indicate that their analysis would be complete pretty soon. They also seemed to hesitate between keeping incentives as-is or reducing them.
From what I understand (referring to OP's timeline), we are about to witness at least 2.5 weeks of no-incentive. And then, a proposal might emerge, on which we will get to vote. I think those 2 weeks (a long time in terms of DeFi, as we know) will probably help us decide on the next phase.
It feels like we may learn a lot from observing what happens when liquidity incentives stop. Would it better to start the poll a few days after that, rather than before?
It is not just a feeling while some large LP whales were helping or became aware of this pre-proposal from "Monet-supply" it seems that the market factored in the fact that there would probably be more UNI rewards for LP to dump, and guess what? So too did the UNI price, from over 3.85 USD to ~3.45 USD. Thats why we need a combined proposal something that entices smaller holders that don't farm UNI liquidity not to dump. Perhaps something similar to that discussed here: https://snapshot.page/#/uniswap/proposal/QmWL6jSeYRKzEaS37GjV96b8sFpLFnmHJG84qvek2speAM
There's a couple things I would love to see changed before this is going to be passed.
Switch away from including the wBTC/ETH pool and move towards tBTC/ETH pool - it's the better, more trustless BTC on ETH
The current system struggled for volume on ETH/Stablecoin pairs (ETH/WBTC had nearly x2 more deposited in $ than the best performing one), half the incentive given to the ETH/BTC pool & increase it equally for the ETH/stablecoin pairs - this should act as a big incentive for people to reduce their worry about impermanent loss and/or missing out on any extremely wild price increases for ETH / BTC
It can serve real purposes :
Sure, pure degen/unsustainable farms use(d) « pool 2 » techniques, as it is widely known. But it doesn't necessarily mean that, if UNI was to subsidize a UNI-ETH LP with a factor of 1X (and not 10X+ as seen in degen farming schemes), UNI would become a ponzi.
It can serve real purposes :
Sure, pure degen/unsustainable farms use(d) « pool 2 » techniques, as it is widely known. But it doesn't necessarily mean that, if UNI was to subsidize a UNI-ETH LP with a factor of 1X (and not 10X+ as seen in degen farming schemes), UNI would become a ponzi.
Anyway, as we've said before, UNI-ETH incentivizing isn't very possible at this state because
A first step would be to propose a way to make LPed UNIs' vote count. This is a good idea in any case (UNI-ETH incentives or not), because currently a lot of UNI is barred from voting (more than 8 millions as I'm typing this !) The issue here is that this is a non-trivial upgrade that will need fresh code and fresh auditing (so, probably treasury funding).
This is well out of the scope of the proposal we are discussing. What we are proposing here is merely a way to extend incentives for a while, and during the second incentives era, governance will be able to come up with truly novel ideas.
Sounds good, seems fair. Gauntlet Network said they were doing the math behind current incentives to see if it was worth keeping them as is or reducing them. With a bit of luck, they'll be done soon and will be able to support this proposal...
DeFi is still in a heavy growth phase from a macro standpoint, hence I see a point in incentivizing pairs that are like entry doors to DeFi (stables, and WBTC especially these days.)
Sounds good, seems fair. Gauntlet Network said they were doing the math behind current incentives to see if it was worth keeping them as is or reducing them. With a bit of luck, they'll be done soon and will be able to support this proposal...
DeFi is still in a heavy growth phase from a macro standpoint, hence I see a point in incentivizing pairs that are like entry doors to DeFi (stables, and WBTC especially these days.)
Otherwise, we should start asking the UNI team to look into ways of making Uni LPers votes count. This should have been the priority. There are currently 7,992,501.71 UNIs in the UniV2 Eth-Uni pool that can't have a voice. This is absurd, as LPers show a high level of commitment to UNI by exposing themselves to potential impermanent/divergence loss.
Finding an appropriate answer to these questions is made quite hard by the fact that we don't have any visibility on when V3 can be expected, not even a rough estimate.
First of all, I think the general feeling (in the Discord server, but elsewhere too) was that incentives were given at a pace too high to be sustainable, creating a sell pressure that was detrimental to the community of UNI holders.
Gauntlet seemed to indicate that their analysis would be complete pretty soon. They also seemed to hesitate between keeping incentives as-is or reducing them.
First of all, I think the general feeling (in the Discord server, but elsewhere too) was that incentives were given at a pace too high to be sustainable, creating a sell pressure that was detrimental to the community of UNI holders.
Gauntlet seemed to indicate that their analysis would be complete pretty soon. They also seemed to hesitate between keeping incentives as-is or reducing them.
From what I understand (referring to OP's timeline), we are about to witness at least 2.5 weeks of no-incentive. And then, a proposal might emerge, on which we will get to vote. I think those 2 weeks (a long time in terms of DeFi, as we know) will probably help us decide on the next phase.
It feels like we may learn a lot from observing what happens when liquidity incentives stop. Would it better to start the poll a few days after that, rather than before?
It feels like we may learn a lot from observing what happens when liquidity incentives stop. Would it better to start the poll a few days after that, rather than before?
I agree, I think we should wait few days or even weeks and see what will happen... in the past Balancer and Sushiswap reached several times the liquidity of Uniswap and still failed to pass its volume... today Uniswap is in a much stronger situation so we don't need to panic
It feels like we may learn a lot from observing what happens when liquidity incentives stop. Would it better to start the poll a few days after that, rather than before?
I agree, I think we should wait few days or even weeks and see what will happen... in the past Balancer and Sushiswap reached several times the liquidity of Uniswap and still failed to pass its volume... today Uniswap is in a much stronger situation so we don't need to panic
Stock buy backs are popular among “Growth” companies like Tesla because they function as a dividend for growth sectors.
Stock buy backs are popular among “Growth” companies like Tesla because they function as a dividend for growth sectors.
Tesla is absolutely not doing stock buybacks. Quite the opposite, they have been issuing convertible bonds (basically a bond paired with a call option, which results in new share issuance/dilution when TSLA price goes up).
Even if the reward is small now, the price of Uni will increase dramatically because of the future potential earnings from higher volume. Similar to Tesla.
Beginning to extract a protocol fee early in Uniswap's development and growth trajectory is likely to reduce future volume and future earnings. This is why Tesla is operating with minimal profit margins and is not paying out dividends or doing share buybacks - they are focusing on growth, which leads to potentially much greater future value capture than trying to increase current profits.
My opinion of Sushiswap is they are paying $2-10 in SUSHI rewards for every $1 they receive in fee revenue. Maybe even a higher differential.
The longer Uniswap keeps the fee switch off, the more this costs our competitors who need to run liquidity mining programs just to keep up. Time is on our side.
Stock buy backs are popular among “Growth” companies like Tesla because they function as a dividend for growth sectors.
Stock buy backs are popular among “Growth” companies like Tesla because they function as a dividend for growth sectors.
Tesla is absolutely not doing stock buybacks. Quite the opposite, they have been issuing convertible bonds (basically a bond paired with a call option, which results in new share issuance/dilution when TSLA price goes up).
Even if the reward is small now, the price of Uni will increase dramatically because of the future potential earnings from higher volume. Similar to Tesla.
Beginning to extract a protocol fee early in Uniswap's development and growth trajectory is likely to reduce future volume and future earnings. This is why Tesla is operating with minimal profit margins and is not paying out dividends or doing share buybacks - they are focusing on growth, which leads to potentially much greater future value capture than trying to increase current profits.
My opinion of Sushiswap is they are paying $2-10 in SUSHI rewards for every $1 they receive in fee revenue. Maybe even a higher differential.
The longer Uniswap keeps the fee switch off, the more this costs our competitors who need to run liquidity mining programs just to keep up. Time is on our side.
Personally, I think Uniswap might be better off leaving the fee switch off for a while. Governance will always have the option to turn it on if we get consensus around that option. But it seems like a one way decision, I'm not sure if there's a clear way to reverse the fee mechanism if it starts to cut into our competitiveness.
the 0.3% LP fee clearly beats 0.25%.
Personally, I think Uniswap might be better off leaving the fee switch off for a while. Governance will always have the option to turn it on if we get consensus around that option. But it seems like a one way decision, I'm not sure if there's a clear way to reverse the fee mechanism if it starts to cut into our competitiveness.
This is a key point. Uniswap is basically giving LPs a uniform subsidy, with pairs delivering more trading volume gaining a larger benefit. Sushiswap and others' system of extracting protocol fees while also paying out (generally much larger value) token incentives is somewhat arbitrary.
Taking an example related to my work with the MakerDAO risk core unit - Sushiswap is very unlikely to subsidize DAI/token LP pairs. This makes Uniswap the best partner for MakerDAO to integrate DAI/token LPs, because LPs get to keep the entire 0.3% fee with no protocol rent extraction. The availability of low cost borrowing power then gives Uni LPs additional earning potential - they can borrow from Maker and deposit to Aave/Compound to pocket the interest rate spread.
For the time being, I feel like the advantages of building long term network effects outweigh potential fee earnings.
Hi everyone!
Sincere apologies for being out of touch for so long. I've been very busy with my day jobs over the past couple months and haven't been able to give UNI governance the attention it deserves.
I wanted to update everyone on the status of this proposal.
Hi everyone!
Sincere apologies for being out of touch for so long. I've been very busy with my day jobs over the past couple months and haven't been able to give UNI governance the attention it deserves.
I wanted to update everyone on the status of this proposal.
TL;DR: I no longer believe it is in Uniswap's best interest to extend liquidity incentives, and will not be pushing this proposal forward to an on chain vote. Quick explanation of my reasoning:
When @coopahtroopa and I initially drafted this proposal, the liquidity incentives were ending imminently and it was not clear if Uniswap would be able to maintain its market share and dominance without continued token distribution.
In my opinion, the relative performance of Uniswap vs competitors in the following few months has soundly addressed this concern. Uniswap continues to lead other DEXes in both TVL and trading volume, and in particular dominates trading in newly launched and long tail assets (basically anything that is not being actively incentivized by competitors).
Back in November, UNI was languishing below $4. Since then it has increased in value more than 5x, so the amounts listed in this proposal are likely no longer appropriate, even if UNI governance decided they would still like to move forward with liquidity incentives.
Furthermore, the relative allocations proposed for WBTC, USDT, USDC, and DAI were based on a point-in-time analysis of the "stickiness" of LPs and trading volume. Given how liquidity has changed since then, the allocations no longer make sense.
In hindsight I view the September-November 2020 liquidity incentive program as a success - it helped Uniswap retain the top spot among DEX protocols and expanded ownership to the wider community. But in cases where we're not facing an existential threat, liquidity mining seems less valuable.
Liquidity has no loyalty, and competitors such as Sushiswap are paying far more in incentives than they take in protocol fees. Over the long term, these incentives are clearly unsustainable and liquidity will likely migrate back to Uniswap once they are discontinued (assuming that Uniswap keeps the fee switch turned off).
I believe we should refocus Uniswap governance and community efforts in areas that are likely to drive long term value and enduring network effects. Off the top of my head this could include community efforts on:
https://twitter.com/bantg/status/1360122013994614787?s=20
If you have an idea for a Uniswap related project, feel free to get in touch with me and I'm happy to discuss and see if/where I can support :slight_smile:
I'd also like to call out the Uniswap Grants program, which has a budget of $750k per quarter to fund important Uniswap related projects and initiatives. Applications for Q1 grants close soon, so if you'd like to apply for funding be sure to get your grant request in before Feb 28! Full details can be found here.
I also have come to think that it's better to keep the fee switch turned off by default at this stage.
It might make sense to turn it on one day later on if/when Uniswap has superdominance, but it's definitely too early for that in my opinion.
I also have come to think that it's better to keep the fee switch turned off by default at this stage.
It might make sense to turn it on one day later on if/when Uniswap has superdominance, but it's definitely too early for that in my opinion.
Having fee switch off is one of the areas where Uniswap's competitive advantage currently lies compared to Sushiswap. The 0.3% fee model scales much better for LPs than 0.25%+ some emissions.
As for the reason to hold, UNI holders have the right to distribute UNI treasury, so that's gotta be worth something. They also have the right to turn that fee switch on when the time is right.
I think it would make sense though to turn the switch on for the assets that we wish to accumulate with our treasury. And to compensate that by UNI emissions. Still, I would vote for emitting a little more towards these pairs than what we would earn from the fees.
And what we get could be put to productive use, for instance, the fees from WBTC/ETH pair could go to Uniswap-controlled LP.
For me personally, I can’t really justify holding on to the whole 400 Uni I was gifted without some sort of return, it’s too large a proportion of my crypto holdings.
For me personally, I can’t really justify holding on to the whole 400 Uni I was gifted without some sort of return, it’s too large a proportion of my crypto holdings.
This is an understandable perspective. But in early stage, high growth industries typically the vast majority of returns come from capital appreciation (value of asset increasing) rather than payouts to owners or buybacks. TSLA has no dividend and probably will not add one for many years to come, but is still one of the most successful assets by performance in the past decade. AMZN and most of the other tech stocks have followed a similar trajectory.
I think it really comes down to time preference. Charging fees and paying them out to token holders could be good for returns in the short term, but I expect they will have a negative effect over longer time periods due to lower growth.
Amount of reports and "ad hominem" posts says otherwise
Why are we having bash war in here?
Simply put it to the vote and let's see, everything else is just talk that won't get Uniswap governance anywhere.
@Buckerino I object to your wording of "stealing". Who made you the sole decider of what is good for UNI holders and the Uniswap community?
More importantly, personal attacks will discourage potential community contributors. This is HUGELY negative for Uniswap, and for the value of the UNI token. Check yourself. If this was in most other governance forums, you would have already been moderated for your toxic behavior.
I'd like to add two things regarding the timing of the liquidity mining program continuation.
LP rewards will shrink to 83.3% of what they currently are, so the major pairs' liquidity will take a hit.
We might want to compensate for that with a liquidity mining program.
Still working on technical implementation, I'll share details here once we're ready to submit a proposal.
If the liquidity mining program compensates exactly the amount that is being taken away by the fee switch, nothing changes for LPs in terms of APY.
Sure! I'll think a bit more about the group's initial structure and then make a topic on the forum with the link.
I believe developing the infrastructure that would enable us to be more agile is essential.
And we need shorter feedback loops when it comes to proposal development.
It would be helpful if, before a proposal is published, it has already been discussed and improved by active community members.
I believe developing the infrastructure that would enable us to be more agile is essential.
And we need shorter feedback loops when it comes to proposal development.
It would be helpful if, before a proposal is published, it has already been discussed and improved by active community members.
Maybe we can start with creating a pre-proposal discord group where people can gather feedback on their initial ideas. It takes a lot of time and effort to develop a proposal. And a lot of it could be saved if you could just put your idea up to vote and get the signal on whether you should develop it or not.
A proposal that is developed collectively by the active part of the community and is somewhat consensually approved by it could be less contentious. A lot of details could be decided by simple votes.
And when it comes to implementing proposals as code, I think we need to hire a team for that.
That discussion was a bit offtopic regarding this specific proposal. I referred to an option to get quick feedback in the pre-proposal stage when the proposal specifics are more transformable. I personally would appreciate having this option, as it would save me a lot of time and effort developing ideas that have no demand in the community. By no means does it exclude the public discourse and soft governance procedures that follow after the proposal is published.
Yes staff doing good job
Personally, I think Uniswap might be better off leaving the fee switch off for a while. Governance will always have the option to turn it on if we get consensus around that option. But it seems like a one way decision, I'm not sure if there's a clear way to reverse the fee mechanism if it starts to cut into our competitiveness.
the 0.3% LP fee clearly beats 0.25%.
Personally, I think Uniswap might be better off leaving the fee switch off for a while. Governance will always have the option to turn it on if we get consensus around that option. But it seems like a one way decision, I'm not sure if there's a clear way to reverse the fee mechanism if it starts to cut into our competitiveness.
This is a key point. Uniswap is basically giving LPs a uniform subsidy, with pairs delivering more trading volume gaining a larger benefit. Sushiswap and others' system of extracting protocol fees while also paying out (generally much larger value) token incentives is somewhat arbitrary.
Taking an example related to my work with the MakerDAO risk core unit - Sushiswap is very unlikely to subsidize DAI/token LP pairs. This makes Uniswap the best partner for MakerDAO to integrate DAI/token LPs, because LPs get to keep the entire 0.3% fee with no protocol rent extraction. The availability of low cost borrowing power then gives Uni LPs additional earning potential - they can borrow from Maker and deposit to Aave/Compound to pocket the interest rate spread.
For the time being, I feel like the advantages of building long term network effects outweigh potential fee earnings.
Hi everyone!
Sincere apologies for being out of touch for so long. I've been very busy with my day jobs over the past couple months and haven't been able to give UNI governance the attention it deserves.
I wanted to update everyone on the status of this proposal.
Hi everyone!
Sincere apologies for being out of touch for so long. I've been very busy with my day jobs over the past couple months and haven't been able to give UNI governance the attention it deserves.
I wanted to update everyone on the status of this proposal.
TL;DR: I no longer believe it is in Uniswap's best interest to extend liquidity incentives, and will not be pushing this proposal forward to an on chain vote. Quick explanation of my reasoning:
When @coopahtroopa and I initially drafted this proposal, the liquidity incentives were ending imminently and it was not clear if Uniswap would be able to maintain its market share and dominance without continued token distribution.
In my opinion, the relative performance of Uniswap vs competitors in the following few months has soundly addressed this concern. Uniswap continues to lead other DEXes in both TVL and trading volume, and in particular dominates trading in newly launched and long tail assets (basically anything that is not being actively incentivized by competitors).
Back in November, UNI was languishing below $4. Since then it has increased in value more than 5x, so the amounts listed in this proposal are likely no longer appropriate, even if UNI governance decided they would still like to move forward with liquidity incentives.
Furthermore, the relative allocations proposed for WBTC, USDT, USDC, and DAI were based on a point-in-time analysis of the "stickiness" of LPs and trading volume. Given how liquidity has changed since then, the allocations no longer make sense.
In hindsight I view the September-November 2020 liquidity incentive program as a success - it helped Uniswap retain the top spot among DEX protocols and expanded ownership to the wider community. But in cases where we're not facing an existential threat, liquidity mining seems less valuable.
Liquidity has no loyalty, and competitors such as Sushiswap are paying far more in incentives than they take in protocol fees. Over the long term, these incentives are clearly unsustainable and liquidity will likely migrate back to Uniswap once they are discontinued (assuming that Uniswap keeps the fee switch turned off).
I believe we should refocus Uniswap governance and community efforts in areas that are likely to drive long term value and enduring network effects. Off the top of my head this could include community efforts on:
https://twitter.com/bantg/status/1360122013994614787?s=20
If you have an idea for a Uniswap related project, feel free to get in touch with me and I'm happy to discuss and see if/where I can support :slight_smile:
I'd also like to call out the Uniswap Grants program, which has a budget of $750k per quarter to fund important Uniswap related projects and initiatives. Applications for Q1 grants close soon, so if you'd like to apply for funding be sure to get your grant request in before Feb 28! Full details can be found here.
I also have come to think that it's better to keep the fee switch turned off by default at this stage.
It might make sense to turn it on one day later on if/when Uniswap has superdominance, but it's definitely too early for that in my opinion.
I also have come to think that it's better to keep the fee switch turned off by default at this stage.
It might make sense to turn it on one day later on if/when Uniswap has superdominance, but it's definitely too early for that in my opinion.
Having fee switch off is one of the areas where Uniswap's competitive advantage currently lies compared to Sushiswap. The 0.3% fee model scales much better for LPs than 0.25%+ some emissions.
As for the reason to hold, UNI holders have the right to distribute UNI treasury, so that's gotta be worth something. They also have the right to turn that fee switch on when the time is right.
I think it would make sense though to turn the switch on for the assets that we wish to accumulate with our treasury. And to compensate that by UNI emissions. Still, I would vote for emitting a little more towards these pairs than what we would earn from the fees.
And what we get could be put to productive use, for instance, the fees from WBTC/ETH pair could go to Uniswap-controlled LP.
For me personally, I can’t really justify holding on to the whole 400 Uni I was gifted without some sort of return, it’s too large a proportion of my crypto holdings.
For me personally, I can’t really justify holding on to the whole 400 Uni I was gifted without some sort of return, it’s too large a proportion of my crypto holdings.
This is an understandable perspective. But in early stage, high growth industries typically the vast majority of returns come from capital appreciation (value of asset increasing) rather than payouts to owners or buybacks. TSLA has no dividend and probably will not add one for many years to come, but is still one of the most successful assets by performance in the past decade. AMZN and most of the other tech stocks have followed a similar trajectory.
I think it really comes down to time preference. Charging fees and paying them out to token holders could be good for returns in the short term, but I expect they will have a negative effect over longer time periods due to lower growth.
Amount of reports and "ad hominem" posts says otherwise
Why are we having bash war in here?
Simply put it to the vote and let's see, everything else is just talk that won't get Uniswap governance anywhere.
@Buckerino I object to your wording of "stealing". Who made you the sole decider of what is good for UNI holders and the Uniswap community?
More importantly, personal attacks will discourage potential community contributors. This is HUGELY negative for Uniswap, and for the value of the UNI token. Check yourself. If this was in most other governance forums, you would have already been moderated for your toxic behavior.
I'd like to add two things regarding the timing of the liquidity mining program continuation.
LP rewards will shrink to 83.3% of what they currently are, so the major pairs' liquidity will take a hit.
We might want to compensate for that with a liquidity mining program.
Still working on technical implementation, I'll share details here once we're ready to submit a proposal.
If the liquidity mining program compensates exactly the amount that is being taken away by the fee switch, nothing changes for LPs in terms of APY.
Sure! I'll think a bit more about the group's initial structure and then make a topic on the forum with the link.
I believe developing the infrastructure that would enable us to be more agile is essential.
And we need shorter feedback loops when it comes to proposal development.
It would be helpful if, before a proposal is published, it has already been discussed and improved by active community members.
I believe developing the infrastructure that would enable us to be more agile is essential.
And we need shorter feedback loops when it comes to proposal development.
It would be helpful if, before a proposal is published, it has already been discussed and improved by active community members.
Maybe we can start with creating a pre-proposal discord group where people can gather feedback on their initial ideas. It takes a lot of time and effort to develop a proposal. And a lot of it could be saved if you could just put your idea up to vote and get the signal on whether you should develop it or not.
A proposal that is developed collectively by the active part of the community and is somewhat consensually approved by it could be less contentious. A lot of details could be decided by simple votes.
And when it comes to implementing proposals as code, I think we need to hire a team for that.
That discussion was a bit offtopic regarding this specific proposal. I referred to an option to get quick feedback in the pre-proposal stage when the proposal specifics are more transformable. I personally would appreciate having this option, as it would save me a lot of time and effort developing ideas that have no demand in the community. By no means does it exclude the public discourse and soft governance procedures that follow after the proposal is published.
Yes staff doing good job
I'd like to add two things regarding the timing of the liquidity mining program continuation.
LP rewards will shrink to 83.3% of what they currently are, so the major pairs' liquidity will take a hit.
We might want to compensate for that with a liquidity mining program.
The "liquidity bullets" might be needed soon, so it might make sense to save them.
If the liquidity mining program compensates exactly the amount that is being taken away by the fee switch, nothing changes for LPs in terms of APY.
In this case what changes is the composition of the Community treasury: it accumulates USD, ETH, and BTC without the need to sell UNI. In other words, it exchanges UNI from the treasury for these coins at better rates than the market. The rates are better because a lot of LPs will keep the UNI they get, especially if the APY they get from UNI is low.
Having these coins in the treasury would be beneficial to pay for services and grants. We could pay a grant in USD and give a UNI bonus on top of it that wouldn't have to be immediately sold to cover the costs of work.
The main myths have already been debunked here. The proposal will NOT benefit Uniswap unless there is a UNI-ETH pool.
The main myths have already been debunked here. The proposal will NOT benefit Uniswap unless there is a UNI-ETH pool.
The consensus check was a farce to begin with where a couple of people holding large sums of UNI voted FOR it and the majority against it.
You are actively trying to steal value from people´s hard-earned money invested into Uniswap. Shame on you.
Hey everyone, quick update on the next steps - we're still working on the distributor implementation so the proposal will not be submitted tomorrow. I'll share an update in this thread once everything is ready for the proposal to move ahead.
Thanks for everyone's thoughtful responses and analysis! This is governance in action, and I'm super optimistic for Uniswap's future based on this discussion :slight_smile:
With regards to continuing distribution, I believe Uniswap stands to benefit even if incentives are not fully optimized. Issuance gives potential Uniswap community members a chance to buy or earn (through being an LP) their share of governance at a reasonable cost - giving community members upside potential has proven important to other crypto project's success.
Thanks for everyone's thoughtful responses and analysis! This is governance in action, and I'm super optimistic for Uniswap's future based on this discussion :slight_smile:
With regards to continuing distribution, I believe Uniswap stands to benefit even if incentives are not fully optimized. Issuance gives potential Uniswap community members a chance to buy or earn (through being an LP) their share of governance at a reasonable cost - giving community members upside potential has proven important to other crypto project's success.
I also think @mosayeri made a great point in yesterday's community call that deep liquidity in some of these foundational pairs like ETH/BTC can help bring in new users from the CEX space and expand Uniswap's total addressable market. Clip: https://www.youtube.com/watch?v=m2FC1GN-U_I&feature=youtu.be&t=1036
I'm a little concerned that volume may be a lagging indicator of DEX adoption, and allowing Uniswap's share of TVL/Liquidity to decline could cause increasing impact on trade volume market share over time. The drop off in market share has not been as bad as feared so far, but I don't take too much comfort from this with only a week of data.
I recommend listening to the 2nd Uniswap community call to everyone who missed it. There's some quality discussion there. After hearing additional arguments, I'd like to adjust my stance.
I acknowledge that there is a strategic value to incentivizing the WBTC pool in the near future.
Addressing my previous arguments:
I recommend listening to the 2nd Uniswap community call to everyone who missed it. There's some quality discussion there. After hearing additional arguments, I'd like to adjust my stance.
I acknowledge that there is a strategic value to incentivizing the WBTC pool in the near future.
Addressing my previous arguments:
The market leadership argument is not entirely correct. Uniswap is the leader in volume on WBTC/ETH pair, but it's far away from leadership on BTC/ETH pair, of course - and this is a top-3 market in crypto space.
In terms of slippage on large trades, WBTC is the only pool that it makes sense to incentivize comparatively:
0,01% slippage seems like a good target to strive for.
As WBTC traders utilize the liquidity more in terms of trade sizes, additional incentivization would bring the experience on par with top USD pairs.
This fact doesn't imply the direction of incentivization, though. Do we want to reward a pair with more makers and takers to decentralize the distribution? Or a pair with fewer makers and takers in hopes that the number grows?
Even though the retention of liquidity after the program is only 31%, the growth in Liquidity/Volume ratio compared to the period before the program is still quite substantial:
Another notable pair in this table is DAI. As we can see, DAI gained the most out of the UNI program in terms of Liquidity/Volume ratio growth. How we interpret these results is up to us.
In my opinion, the key difference between Sushi and UNI programs is that the first one incentivized a lot of pools, and the latter only 4.
Being one of the top four pools brought a lot of legitimacy to DAI and WBTC, which had positive feedback loops regarding LPs' comfort to park their money.
The least successful pair in terms of gaining retention effects from the program is USDC.
It then comes down to the decision we need to make - how strategically important it is for us to have big liquidity on the BTC pair.
If we find it crucial, we can opt to renew WBTC incentives repeatedly and keep that temporary liquidity.
==
The reasoning above would make me vote for the proposal that would incentivize only the WBTC pair.
There is no significant drawback on USD pairs in trading experience, they perform well without the program, and Uniswap doesn't have a new niche to take with them. So I would vote against restarting LMP for them.
If I were to modify the initial proposal, I would take an even amount out of all USD pairs, not just DAI.
DAI pair in the initial program invited a bigger number of new LPs to Uniswap - and was a quite successful investment in general.
Overall it makes me neutral, so I will actively abstain from voting.
I believe both outcomes have their own merits and drawbacks, and I approve of both of them.
Overall, I have found no convincing argument to restart the program for the top-4 pairs.
Initially, the proposal seemed like a good idea to me, as I thought it represented the middle ground between the interests of different parts of the Uniswap Community. I have reconsidered my stance since.
Now it seems to me that there's not much to gain here for all the major groups: LPs, Users, UNI holders.
Overall, I have found no convincing argument to restart the program for the top-4 pairs.
Initially, the proposal seemed like a good idea to me, as I thought it represented the middle ground between the interests of different parts of the Uniswap Community. I have reconsidered my stance since.
Now it seems to me that there's not much to gain here for all the major groups: LPs, Users, UNI holders.
It also doesn't look like a good investment in isolation. The targeted markets are the ones where Uniswap either already has dominance or has no chance for dominance.
The program is likely to be inefficient in its primary purposes.
The increase in the liquidity retention effect is expected to be considerably lower than after the previous two programs.
We also know that increased liquidity doesn't increase the volume or the average trade size, so excessive liquidity is not needed.
As for the community-building perspective, for the most part, we just invite LPs who left to come back temporarily.
The improvements to the user experience will be quite negligible and not worth the cost. If my estimations are correct, more than 87% of the trades on top-4 pairs happen with a <0.01% slippage already. For reference, the UI doesn't show if the slippage is 0.001% or 0.009%.
Current liquidity providers on the top-4 pairs don't get much from this program either: their APYs are likely to stay the same. Except they're rewarded in respective coins now, and with the program, they'll receive UNI instead.
The primary beneficiaries of this program are large LPs who left Uniswap after the program finished.
UNI holders pay for this program, and it sounds like a bad investment.
Sushiswap is not a competitor to Uniswap on these pairs, and the numbers there are not sustainable and likely have signaling purposes.
I also find it a bit questionable to view the restart of the initial program as maintaining the status quo. If someone proposed to repeat the original airdrop with a smaller size, it certainly wouldn't be viewed as such.
I will vote against the proposal.
I think the modified version leads to less decentralized distribution than the original, but I would vote against the original version too.
Even though I'm pro-distribution overall, and I think it's ok if a distribution is somewhat inefficient, the inefficiency of this one is a bit too high for my taste.
We can do better, and nothing is pressing us to restart the liquidity incentives immediately.
Update: The average trade size on WBTC is larger because it's not a popular pair for trading, i.e. there's not much demand among Uniswap users to trade WBTC/ETH. The data is from the Uniswap Community Dashboard:
Another interesting and relevant metric can be found on Uniswap Community Dashboard: it's Uniswap LPs per pool. This same metric can be helpful in the future when we decide to incentivize other pools.
Out of all the pools DAI is the second largest community of LPs after UNI. And out of all incentivized pools WBTC has the least amount of members.
Another interesting and relevant metric can be found on Uniswap Community Dashboard: it's Uniswap LPs per pool. This same metric can be helpful in the future when we decide to incentivize other pools.
Out of all the pools DAI is the second largest community of LPs after UNI. And out of all incentivized pools WBTC has the least amount of members.
So if we want to decentralize the distribution, taking away from DAI and giving it to WBTC does the opposite of what we want.
It is a deal-breaker for me for the modified proposal.
Cutting the rewards from the bigger community and giving them to the smaller just makes no sense to me, and reduced slippage for large traders doesn't justify it in my mind.
I'm not convinced that Sushiswap presents a threat to Uniswap because Uniswap is simply richer, has an all-star development team, and a large user base.
I think it's good for the DeFi ecosystem that Sushiswap subsidizes liquidity and we should let it do that. I don't think there is a reason to compete. At any given moment, Uniswap can get the dominant position in any Sushi market it wants.
Here's a snapshot of the liquidity and APYs for the tokens incentivized on Sushiswap:
Thanks for the numbers, they changed my thinking at least a little cause they give an argument for btc incentive. Besides the gain in fees, as a lp I see one other major aspect in the liquidity pools: they are a buffer against price manipulation on cex. And ofc this is also important for btc and cause of the high market cap a higher liquidity volume on dex might be justified to achieve this. Another question is if uni shall pay for this and reward higher incentive for wbtc.
Let's further explore the metrics that could help our judgment in terms of uneven incentivization of the pools at hand.
One thing to look at is how traders utilize the increased liquidity.
I suggest considering two queries for that that reflect 50th and 95th Percentiles of Trades over time:
Let's further explore the metrics that could help our judgment in terms of uneven incentivization of the pools at hand.
One thing to look at is how traders utilize the increased liquidity.
I suggest considering two queries for that that reflect 50th and 95th Percentiles of Trades over time:
As we can see from the 50th Percentile query, the increased liquidity hasn't raised the average trade size during LMP.
The 95th Percentile query is a bit more differentiating.
We can see that WBTC liquidity is better utilized by large traders.
Among the USD pairs DAI showed the best utilization rate, USDT the worst, but they're close overall.
USD numbers start to make more sense if we take a look at the volumes of respective pairs compared to the leader / 2nd best option on the market (data from Coinmarketcap):
If we want to optimize the distributions to reduce the slippage for large traders, it makes sense to bring more weight to the WBTC pool.
If we think about competition, it is not clear if the program is needed at this point in time. Uniswap either has dominance or no chance for dominance when it comes to volume share in the market for the respective pairs.
I totally agree to your conclusion that right now incentive isn't necessary to catch volume. Anyway, if there is some I will be happy to take it, but imho the UNI can better be hold till there is a good rational to spend it.
It seems that our approaches' main difference is that @monet-supply and @tarun seem to focus more on the absolute numbers in liquidity growth, and I'm more focused on the retention rates of liquidity and volume.
Here's some numbers to consider:
The way I see it, both the liquidity programs Uniswap LPs enjoyed are quite successful overall.
This outflow is not sustainable, though. It looks a lot like manipulation. So it doesn't seem like a good idea to make changes to the LMP based on this data. Or maybe to continue the LMP in the first place.
It's money that wants to farm UNI signaling the outflow to make Uniswap governance panic and restart the program. There's likely more than $20M up for grabs for this money if the program is to be restarted, and increasing the WBTC rewards is just feeding it more. It is also probable that these $20M worth of UNI will be sold into the market.
This outflow is not sustainable, though. It looks a lot like manipulation. So it doesn't seem like a good idea to make changes to the LMP based on this data. Or maybe to continue the LMP in the first place.
It's money that wants to farm UNI signaling the outflow to make Uniswap governance panic and restart the program. There's likely more than $20M up for grabs for this money if the program is to be restarted, and increasing the WBTC rewards is just feeding it more. It is also probable that these $20M worth of UNI will be sold into the market.
If we take a closer look at the incentives LPs get on Sushi, they're below the APYs Uniswap LPs are having.
And there presumably is a lot of fake volume as well, given the risk/reward of this move.
Just look at the charts similar to the ones I posted above, but for Sushi:
Here are the queries: 50th, 95th.
When you own the liquidity, it is really cheap to fake it.
Sushiswap is not a competitor to Uniswap on these pairs.
These are strategic / political arguments. When I talked about overincentivization, I meant it as a quantitative argument in terms of volume/liquidity ratios.
c. For the HIGH risk of impermanent loss, we are underincentivized, even on WBTC Pools.
Personally, I'm in favor of @tarun's suggestion to shift a bit of incentives from the DAI to the WBTC pool.
Over the course of this last distribution, DAI liquidity increased a lot less than liquidity in the other pools - this leads me to believe that DAI/ETH liquidity is less responsive to incentives, and Uniswap gains a bit less from incentivizing DAI/ETH equally with the other pools.
Personally, I'm in favor of @tarun's suggestion to shift a bit of incentives from the DAI to the WBTC pool.
Over the course of this last distribution, DAI liquidity increased a lot less than liquidity in the other pools - this leads me to believe that DAI/ETH liquidity is less responsive to incentives, and Uniswap gains a bit less from incentivizing DAI/ETH equally with the other pools.
WBTC is the only candidate for incentivized BTC liquidity, and attributing 1/3 of the program rewards to it with 2/3 to USD stablecoins (1/4 USDC, 1/4 USDT, 1/6 DAI) seems reasonable from a business standpoint. Over time, as other BTC implementations get more established, Uniswap may be able to diversify BTC incentives as well.
As for USD stablecoins, each of the current options offers something different and I support maintaining all 3 as part of the incentive scheme. USDC is trusted and well regulated, USDT is the most widely used stablecoin, and DAI offers decentralization.
what is the reasoning to favor wbtc, just because btc has the highest market cap?
Your points a. and b. are totally correct. Point c is something every liquidity provider has to consider and right now there seems enough liquidity in eth/wbtc pool, so the fees seem to be enough incentive for them. Regarding higher ROI elsewhere: I would differentiate between true ROI due to the genuine protocol and incentives which are not sustainable in long term. If the ROI is temorarily higher elsewhere (like sushi in it's first two weeks) ofc much mony moves for it. But I am sure it will come back to the place where the income is more sustainable, and this, right now is uniswap even without incentive.
Still, seeing as the other three pools are all stablecoins, you could almost view the rewards as BTC & stablecoins, rather than WBTC, DAI, USDC and USDT.
This seems reasonable to me, I would still provide liquidity. But I doubt it make much difference. Usually I will put liquidity in a pool long term cause I choose assets I trust and my gains grow as longer I stay within the pool. If one choose to leave a pool it's either because the money is needed for something else (e.g. liquidity mining elswhere;-)) or trust in one of the assets is gone, especially in the latter case I wouldn't stay whatever the panelty is and in the first case it has to be nearly the same as the proposed incentive elsewhere, which seems unlikely for fees accumulated in less than a month Anyway it seems worth thinking about, if it's technically not too hard to implement. I would appreciate to see some rewards to the uni protocol (or the remainig pool participents) even if it doesn't prevent pool hopping.
What kind of disincentive do you think of? I wouldn't provide liquidity if it feel 'trapped' there.
I'd like to add two things regarding the timing of the liquidity mining program continuation.
LP rewards will shrink to 83.3% of what they currently are, so the major pairs' liquidity will take a hit.
We might want to compensate for that with a liquidity mining program.
The "liquidity bullets" might be needed soon, so it might make sense to save them.
If the liquidity mining program compensates exactly the amount that is being taken away by the fee switch, nothing changes for LPs in terms of APY.
In this case what changes is the composition of the Community treasury: it accumulates USD, ETH, and BTC without the need to sell UNI. In other words, it exchanges UNI from the treasury for these coins at better rates than the market. The rates are better because a lot of LPs will keep the UNI they get, especially if the APY they get from UNI is low.
Having these coins in the treasury would be beneficial to pay for services and grants. We could pay a grant in USD and give a UNI bonus on top of it that wouldn't have to be immediately sold to cover the costs of work.
The main myths have already been debunked here. The proposal will NOT benefit Uniswap unless there is a UNI-ETH pool.
The main myths have already been debunked here. The proposal will NOT benefit Uniswap unless there is a UNI-ETH pool.
The consensus check was a farce to begin with where a couple of people holding large sums of UNI voted FOR it and the majority against it.
You are actively trying to steal value from people´s hard-earned money invested into Uniswap. Shame on you.
Hey everyone, quick update on the next steps - we're still working on the distributor implementation so the proposal will not be submitted tomorrow. I'll share an update in this thread once everything is ready for the proposal to move ahead.
Thanks for everyone's thoughtful responses and analysis! This is governance in action, and I'm super optimistic for Uniswap's future based on this discussion :slight_smile:
With regards to continuing distribution, I believe Uniswap stands to benefit even if incentives are not fully optimized. Issuance gives potential Uniswap community members a chance to buy or earn (through being an LP) their share of governance at a reasonable cost - giving community members upside potential has proven important to other crypto project's success.
Thanks for everyone's thoughtful responses and analysis! This is governance in action, and I'm super optimistic for Uniswap's future based on this discussion :slight_smile:
With regards to continuing distribution, I believe Uniswap stands to benefit even if incentives are not fully optimized. Issuance gives potential Uniswap community members a chance to buy or earn (through being an LP) their share of governance at a reasonable cost - giving community members upside potential has proven important to other crypto project's success.
I also think @mosayeri made a great point in yesterday's community call that deep liquidity in some of these foundational pairs like ETH/BTC can help bring in new users from the CEX space and expand Uniswap's total addressable market. Clip: https://www.youtube.com/watch?v=m2FC1GN-U_I&feature=youtu.be&t=1036
I'm a little concerned that volume may be a lagging indicator of DEX adoption, and allowing Uniswap's share of TVL/Liquidity to decline could cause increasing impact on trade volume market share over time. The drop off in market share has not been as bad as feared so far, but I don't take too much comfort from this with only a week of data.
I recommend listening to the 2nd Uniswap community call to everyone who missed it. There's some quality discussion there. After hearing additional arguments, I'd like to adjust my stance.
I acknowledge that there is a strategic value to incentivizing the WBTC pool in the near future.
Addressing my previous arguments:
I recommend listening to the 2nd Uniswap community call to everyone who missed it. There's some quality discussion there. After hearing additional arguments, I'd like to adjust my stance.
I acknowledge that there is a strategic value to incentivizing the WBTC pool in the near future.
Addressing my previous arguments:
The market leadership argument is not entirely correct. Uniswap is the leader in volume on WBTC/ETH pair, but it's far away from leadership on BTC/ETH pair, of course - and this is a top-3 market in crypto space.
In terms of slippage on large trades, WBTC is the only pool that it makes sense to incentivize comparatively:
0,01% slippage seems like a good target to strive for.
As WBTC traders utilize the liquidity more in terms of trade sizes, additional incentivization would bring the experience on par with top USD pairs.
This fact doesn't imply the direction of incentivization, though. Do we want to reward a pair with more makers and takers to decentralize the distribution? Or a pair with fewer makers and takers in hopes that the number grows?
Even though the retention of liquidity after the program is only 31%, the growth in Liquidity/Volume ratio compared to the period before the program is still quite substantial:
Another notable pair in this table is DAI. As we can see, DAI gained the most out of the UNI program in terms of Liquidity/Volume ratio growth. How we interpret these results is up to us.
In my opinion, the key difference between Sushi and UNI programs is that the first one incentivized a lot of pools, and the latter only 4.
Being one of the top four pools brought a lot of legitimacy to DAI and WBTC, which had positive feedback loops regarding LPs' comfort to park their money.
The least successful pair in terms of gaining retention effects from the program is USDC.
It then comes down to the decision we need to make - how strategically important it is for us to have big liquidity on the BTC pair.
If we find it crucial, we can opt to renew WBTC incentives repeatedly and keep that temporary liquidity.
==
The reasoning above would make me vote for the proposal that would incentivize only the WBTC pair.
There is no significant drawback on USD pairs in trading experience, they perform well without the program, and Uniswap doesn't have a new niche to take with them. So I would vote against restarting LMP for them.
If I were to modify the initial proposal, I would take an even amount out of all USD pairs, not just DAI.
DAI pair in the initial program invited a bigger number of new LPs to Uniswap - and was a quite successful investment in general.
Overall it makes me neutral, so I will actively abstain from voting.
I believe both outcomes have their own merits and drawbacks, and I approve of both of them.
Overall, I have found no convincing argument to restart the program for the top-4 pairs.
Initially, the proposal seemed like a good idea to me, as I thought it represented the middle ground between the interests of different parts of the Uniswap Community. I have reconsidered my stance since.
Now it seems to me that there's not much to gain here for all the major groups: LPs, Users, UNI holders.
Overall, I have found no convincing argument to restart the program for the top-4 pairs.
Initially, the proposal seemed like a good idea to me, as I thought it represented the middle ground between the interests of different parts of the Uniswap Community. I have reconsidered my stance since.
Now it seems to me that there's not much to gain here for all the major groups: LPs, Users, UNI holders.
It also doesn't look like a good investment in isolation. The targeted markets are the ones where Uniswap either already has dominance or has no chance for dominance.
The program is likely to be inefficient in its primary purposes.
The increase in the liquidity retention effect is expected to be considerably lower than after the previous two programs.
We also know that increased liquidity doesn't increase the volume or the average trade size, so excessive liquidity is not needed.
As for the community-building perspective, for the most part, we just invite LPs who left to come back temporarily.
The improvements to the user experience will be quite negligible and not worth the cost. If my estimations are correct, more than 87% of the trades on top-4 pairs happen with a <0.01% slippage already. For reference, the UI doesn't show if the slippage is 0.001% or 0.009%.
Current liquidity providers on the top-4 pairs don't get much from this program either: their APYs are likely to stay the same. Except they're rewarded in respective coins now, and with the program, they'll receive UNI instead.
The primary beneficiaries of this program are large LPs who left Uniswap after the program finished.
UNI holders pay for this program, and it sounds like a bad investment.
Sushiswap is not a competitor to Uniswap on these pairs, and the numbers there are not sustainable and likely have signaling purposes.
I also find it a bit questionable to view the restart of the initial program as maintaining the status quo. If someone proposed to repeat the original airdrop with a smaller size, it certainly wouldn't be viewed as such.
I will vote against the proposal.
I think the modified version leads to less decentralized distribution than the original, but I would vote against the original version too.
Even though I'm pro-distribution overall, and I think it's ok if a distribution is somewhat inefficient, the inefficiency of this one is a bit too high for my taste.
We can do better, and nothing is pressing us to restart the liquidity incentives immediately.
Update: The average trade size on WBTC is larger because it's not a popular pair for trading, i.e. there's not much demand among Uniswap users to trade WBTC/ETH. The data is from the Uniswap Community Dashboard:
Another interesting and relevant metric can be found on Uniswap Community Dashboard: it's Uniswap LPs per pool. This same metric can be helpful in the future when we decide to incentivize other pools.
Out of all the pools DAI is the second largest community of LPs after UNI. And out of all incentivized pools WBTC has the least amount of members.
Another interesting and relevant metric can be found on Uniswap Community Dashboard: it's Uniswap LPs per pool. This same metric can be helpful in the future when we decide to incentivize other pools.
Out of all the pools DAI is the second largest community of LPs after UNI. And out of all incentivized pools WBTC has the least amount of members.
So if we want to decentralize the distribution, taking away from DAI and giving it to WBTC does the opposite of what we want.
It is a deal-breaker for me for the modified proposal.
Cutting the rewards from the bigger community and giving them to the smaller just makes no sense to me, and reduced slippage for large traders doesn't justify it in my mind.
I'm not convinced that Sushiswap presents a threat to Uniswap because Uniswap is simply richer, has an all-star development team, and a large user base.
I think it's good for the DeFi ecosystem that Sushiswap subsidizes liquidity and we should let it do that. I don't think there is a reason to compete. At any given moment, Uniswap can get the dominant position in any Sushi market it wants.
Here's a snapshot of the liquidity and APYs for the tokens incentivized on Sushiswap:
Thanks for the numbers, they changed my thinking at least a little cause they give an argument for btc incentive. Besides the gain in fees, as a lp I see one other major aspect in the liquidity pools: they are a buffer against price manipulation on cex. And ofc this is also important for btc and cause of the high market cap a higher liquidity volume on dex might be justified to achieve this. Another question is if uni shall pay for this and reward higher incentive for wbtc.
Let's further explore the metrics that could help our judgment in terms of uneven incentivization of the pools at hand.
One thing to look at is how traders utilize the increased liquidity.
I suggest considering two queries for that that reflect 50th and 95th Percentiles of Trades over time:
Let's further explore the metrics that could help our judgment in terms of uneven incentivization of the pools at hand.
One thing to look at is how traders utilize the increased liquidity.
I suggest considering two queries for that that reflect 50th and 95th Percentiles of Trades over time:
As we can see from the 50th Percentile query, the increased liquidity hasn't raised the average trade size during LMP.
The 95th Percentile query is a bit more differentiating.
We can see that WBTC liquidity is better utilized by large traders.
Among the USD pairs DAI showed the best utilization rate, USDT the worst, but they're close overall.
USD numbers start to make more sense if we take a look at the volumes of respective pairs compared to the leader / 2nd best option on the market (data from Coinmarketcap):
If we want to optimize the distributions to reduce the slippage for large traders, it makes sense to bring more weight to the WBTC pool.
If we think about competition, it is not clear if the program is needed at this point in time. Uniswap either has dominance or no chance for dominance when it comes to volume share in the market for the respective pairs.
I totally agree to your conclusion that right now incentive isn't necessary to catch volume. Anyway, if there is some I will be happy to take it, but imho the UNI can better be hold till there is a good rational to spend it.
It seems that our approaches' main difference is that @monet-supply and @tarun seem to focus more on the absolute numbers in liquidity growth, and I'm more focused on the retention rates of liquidity and volume.
Here's some numbers to consider:
The way I see it, both the liquidity programs Uniswap LPs enjoyed are quite successful overall.
This outflow is not sustainable, though. It looks a lot like manipulation. So it doesn't seem like a good idea to make changes to the LMP based on this data. Or maybe to continue the LMP in the first place.
It's money that wants to farm UNI signaling the outflow to make Uniswap governance panic and restart the program. There's likely more than $20M up for grabs for this money if the program is to be restarted, and increasing the WBTC rewards is just feeding it more. It is also probable that these $20M worth of UNI will be sold into the market.
This outflow is not sustainable, though. It looks a lot like manipulation. So it doesn't seem like a good idea to make changes to the LMP based on this data. Or maybe to continue the LMP in the first place.
It's money that wants to farm UNI signaling the outflow to make Uniswap governance panic and restart the program. There's likely more than $20M up for grabs for this money if the program is to be restarted, and increasing the WBTC rewards is just feeding it more. It is also probable that these $20M worth of UNI will be sold into the market.
If we take a closer look at the incentives LPs get on Sushi, they're below the APYs Uniswap LPs are having.
And there presumably is a lot of fake volume as well, given the risk/reward of this move.
Just look at the charts similar to the ones I posted above, but for Sushi:
Here are the queries: 50th, 95th.
When you own the liquidity, it is really cheap to fake it.
Sushiswap is not a competitor to Uniswap on these pairs.
These are strategic / political arguments. When I talked about overincentivization, I meant it as a quantitative argument in terms of volume/liquidity ratios.
c. For the HIGH risk of impermanent loss, we are underincentivized, even on WBTC Pools.
Personally, I'm in favor of @tarun's suggestion to shift a bit of incentives from the DAI to the WBTC pool.
Over the course of this last distribution, DAI liquidity increased a lot less than liquidity in the other pools - this leads me to believe that DAI/ETH liquidity is less responsive to incentives, and Uniswap gains a bit less from incentivizing DAI/ETH equally with the other pools.
Personally, I'm in favor of @tarun's suggestion to shift a bit of incentives from the DAI to the WBTC pool.
Over the course of this last distribution, DAI liquidity increased a lot less than liquidity in the other pools - this leads me to believe that DAI/ETH liquidity is less responsive to incentives, and Uniswap gains a bit less from incentivizing DAI/ETH equally with the other pools.
WBTC is the only candidate for incentivized BTC liquidity, and attributing 1/3 of the program rewards to it with 2/3 to USD stablecoins (1/4 USDC, 1/4 USDT, 1/6 DAI) seems reasonable from a business standpoint. Over time, as other BTC implementations get more established, Uniswap may be able to diversify BTC incentives as well.
As for USD stablecoins, each of the current options offers something different and I support maintaining all 3 as part of the incentive scheme. USDC is trusted and well regulated, USDT is the most widely used stablecoin, and DAI offers decentralization.
what is the reasoning to favor wbtc, just because btc has the highest market cap?
Your points a. and b. are totally correct. Point c is something every liquidity provider has to consider and right now there seems enough liquidity in eth/wbtc pool, so the fees seem to be enough incentive for them. Regarding higher ROI elsewhere: I would differentiate between true ROI due to the genuine protocol and incentives which are not sustainable in long term. If the ROI is temorarily higher elsewhere (like sushi in it's first two weeks) ofc much mony moves for it. But I am sure it will come back to the place where the income is more sustainable, and this, right now is uniswap even without incentive.
Still, seeing as the other three pools are all stablecoins, you could almost view the rewards as BTC & stablecoins, rather than WBTC, DAI, USDC and USDT.
This seems reasonable to me, I would still provide liquidity. But I doubt it make much difference. Usually I will put liquidity in a pool long term cause I choose assets I trust and my gains grow as longer I stay within the pool. If one choose to leave a pool it's either because the money is needed for something else (e.g. liquidity mining elswhere;-)) or trust in one of the assets is gone, especially in the latter case I wouldn't stay whatever the panelty is and in the first case it has to be nearly the same as the proposed incentive elsewhere, which seems unlikely for fees accumulated in less than a month Anyway it seems worth thinking about, if it's technically not too hard to implement. I would appreciate to see some rewards to the uni protocol (or the remainig pool participents) even if it doesn't prevent pool hopping.
What kind of disincentive do you think of? I wouldn't provide liquidity if it feel 'trapped' there.
It seems that our approaches' main difference is that @monet-supply and @tarun seem to focus more on the absolute numbers in liquidity growth, and I'm more focused on the retention rates of liquidity and volume.
Here's some numbers to consider:
The way I see it, both the liquidity programs Uniswap LPs enjoyed are quite successful overall.
The main achievement of the UNI liquidity mining program (LMP) is that it brought DAI and WBTC on par with the other two of the top-4 pairs on the exchange.
However, it appears that there's not much room to grow from here, especially with 50% of the incentives.
If we consider liquidity before and after UNI LMP (see "4 difference with 2" column), it signals that rewarding USDC and USDT was less beneficial in comparison to rewarding WBTC and DAI.
The volume's retention rate is quite impressive post LMP, but it looks like the volume is close to its cap at this point in time. So additional subsidies are unlikely to be efficient for the most part (see: "3 difference with 2").
As for liquidity, as you can see in the "Difference with 3" column, WBTC and USDC have lower liquidity retention rates than the other two pairs so far. It could signal that a bigger percentage of money in these pairs stayed there temporarily to enjoy the farming incentives.
==
I think it makes sense to bring the discussion more to the quantitative realm, so we can figure out how good this decision is from the business perspective. It seems that there are some models to explore to guesstimate what we're trying to achieve with the program - and what efficiency we expect.
Of course, even if all the metrics say that the continuation of LMP is inefficient as a business proposal, it doesn't mean that the community shouldn't accept it due to other reasons.
Some of the possible reasons to continue distribution are:
These are strategic / political arguments. When I talked about overincentivization, I meant it as a quantitative argument in terms of volume/liquidity ratios.
c. For the HIGH risk of impermanent loss, we are underincentivized, even on WBTC Pools.
The IL on WBTC-ETH pair is lower than on USD-ETH pairs, because ETH+BTC moves in USD terms are correlated. The lower IL on WBTC-ETH pair also explains why it had bigger liquidity while being a less profitable pair in terms of UNI distribution APYs. Meaning: LPs really don't need any noticeable APY from volume fees on this pair as long as they get UNI distribution that gives them 10% APY.
If we take a look at it in isolation, the current 10% APY on WBTC-ETH pair could be viewed as LPs bet that most of the times ETH won't rise above 2.5x+ or fall below -60% compared to BTC. It is more complicated than that, but the general concept is there.
The statement that you make - that even the most overincentivized (comparatively) pool is underincentivized, implies that the economic design of Uniswap is not sustainable. I don't think this statement has a solid foundation.
b. BTC and ETH are traded everywhere, much more than those nonsense tokens. The demand to trade is simply higher.
While BTC is certainly important, Uniswap's core value proposition is that it is a trustless exchange where everyone can create a pair. And ETH is the main reference coin in the network. Being able to trade 'the nonsense tokens', being able to list your token without the need of exchange's permission is what Uniswap brings to the table in the first place.
Still, seeing as the other three pools are all stablecoins, you could almost view the rewards as BTC & stablecoins, rather than WBTC, DAI, USDC and USDT.
We can also make a further distinction: BTC, centralized stablecoins, decentralized stablecoin. There might be a case to be made to include only one centralized stablecoin in the program. The justification for this change would be strategic and ecosystem-related. It seems beneficial for DeFi ecosystem on Ethereum if DAI and WBTC grow adoption.
That said, when it comes to paying for ecosystem development, I think Sushiswap is already doing it just fine. And adding UNI rewards on top of Sushi rewards would just turn that into a pointless zero-sum game. It wouldn't add the liquidity to DeFi or retaining liquidity to Uniswap, it would just move the liquidity that doesn't stay from one incentive program to the other. I mean the liquidity with a very low retention rate, the farming money.
I personally don’t feel too strongly about how the rewards are distributed among these pools, so long as we can agree to only include (at most) these four pools for the next chapter as we consider other pools and incentive structures.
I'm definitely not suggesting adding rewards to pools other than the 4 at hand in this topic. However, I think it is quite useful to look at other pools to have reference points. I'll come back at it later with some numbers.
The temperature check poll has now passed. Details: https://gov.uniswap.org/t/temperature-check-should-uniswap-distribute-uni-to-liquidity-providers/8591/2?u=monet-supply
We will be pushing the start of the consensus check poll (phase 2 of the Uniswap governance process) until Monday November 23. This will allow additional time for community discussion and analysis before moving forward.
This dune analytics dashboard is pretty informative about the state of liquidity mining. WBTC, USDC, and USDT have see far higher outflows to Sushiswap than DAI, so optimizing the incentive program with a small reallocation from DAI/ETH to WBTC/ETH seems reasonable.
In the interest of expediency and moving the process forward, I will be submitting a Consensus Check poll tomorrow based on the updated incentives distribution plan:
This dune analytics dashboard is pretty informative about the state of liquidity mining. WBTC, USDC, and USDT have see far higher outflows to Sushiswap than DAI, so optimizing the incentive program with a small reallocation from DAI/ETH to WBTC/ETH seems reasonable.
In the interest of expediency and moving the process forward, I will be submitting a Consensus Check poll tomorrow based on the updated incentives distribution plan:
Over a longer-time frame this breaks down to roughly:
The poll will run for 5 days, with a majority of at least 50,000 UNI required to move forward to a full on chain governance proposal.
Nice math, I suppose it would help to maintain the btc surge :wink:, but not sure if we need it to maintain uniswap functionallity. Although liquidity droped shortly after the incentice ended, it stabilized now and trading volume is little changed. I don't see the need for a new incentive programm right now, but however this might change in the future. As a customer of uniswap (lp and trading) I need enough liquidity to allow for low slippage (right now it seems enough, still more than competitors), pools of all the tokens I like to trade (uni is superior to all competitors) for a one stop get all you want experience and low gas fees (not higher on uni compared to others on mainnet). As a lp I need enough trading volume to justify the risk of impermanent loss (also superior on uni). If we are seeing higher trading volume in relation to liquidity volume at competitors or if we see a drain in pools, these would be the criteria for me to think about new incentives.
edit: also if liqudity fell so much that slipage for the most traded pairs increase for the avarege trade size would be a reason for incentive, haven't figured out the numbers, but this is ofc something worth to look at to me.
You have to stake the LP tokens to receive UNI. Details here: https://gov.uniswap.org/t/learn-how-to-provide-liquidity-and-earn-uni/2320
You can use the discord chat for support questions: https://discord.com/channels/597638925346930701/606886929094541313
Many people who have received UNI via airdrop or by buying become concerned with its price movements. They, as holders of the asset, feel dissatisfied when UNI price goes down. There is one thing to consider, though:
When UNI price gets lower due to ongoing process of distribution, it is a healthy process that is beneficial for Uniswap governance.
Many people who have received UNI via airdrop or by buying become concerned with its price movements. They, as holders of the asset, feel dissatisfied when UNI price goes down. There is one thing to consider, though:
When UNI price gets lower due to ongoing process of distribution, it is a healthy process that is beneficial for Uniswap governance.
When LPs receive UNI rewards by providing value to the network, they can keep or sell them.
Distributing UNI rewards to LPs who keep them and become part of the governance process is a positive result.
LPs who sell the tokens self-retire themselves from Uniswap governance.
By doing so, they also bring the price down. When the price is lower, it creates a better buying opportunity for people who believe in Uniswap's future. So present and future investors in the protocol benefit.
The same logic applies to past users who received the airdrop.
The power in the network gets decentralized and distributed towards good actors.
In other words, you suggest bringing the UNI distribution APYs for participating pools closer to each other.
This would end up increasing the disparity in liquidity between the pools.
As it is a change to the status quo, I believe it needs more justification.
In other words, you suggest bringing the UNI distribution APYs for participating pools closer to each other.
This would end up increasing the disparity in liquidity between the pools.
As it is a change to the status quo, I believe it needs more justification.
The simplest, most equitable criteria for liquidity incentives is that the same amount of money is paid per $1M of liquidity in each rewarded pool.
This criterion doesn't make much sense to me.
There are diminishing returns on every new $1M of liquidity.
$1M worth of liquidity in a $50M pool is much more valuable than $1M worth of liquidity in a $900M pool.
However, if we find the diminishing returns criterion as the most crucial, we shouldn't continue the liquidity mining program for the proposed pools. And start rewarding other pairs instead.
I believe there should also be a criterion in place that we use to measure overincentivization .
For example, spending all the treasury money on the WBTC-ETH pair doesn't look right, even if it would bring larger liquidity to the platform.
Maybe we could explore the correlation of Volume and Liquidity among the pairs?
In my opinion, if we have an inverse correlation between Liquidity and Volume, it is a clear sign that the pair is heavily overincentivized. And WBTC-ETH pair is the most overincentivized pair in the initial program.
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There was a question in the survey about restructuring the existing pools based on APYs, and here's no clear preference there:
==
We could state that we want to reward the Bitcoin community with the same APY we reward the other top-4 pools. Or that we want to bring more whale trading on WBTC on Uniswap. But that would be political statements. I can't detect a valid quantitative argument yet, though.
If we think about the slippage, the slippage below <0.01% is not even displayed in the UI. And 0.01% slippage already looks quite negligible given the fact that users pay 0.3% fee on top of it.
I see it as more of a medium/long term issue. As Sushiswap and other competitors gain liquidity, aggregators and users will slowly shift towards other venues for best execution.
I'm heartened by the amount of liquidity and volume that remains on Uniswap, but I don't think we can be complacent either.
@sommi please follow the community guidelines. Your candid feedback is appreciated. But your tone is unnecessary. :peace_symbol:
I just realized it - we already have all the data we need.
I just think that using governance UNI to continue liquidity incentive plan doesn't bring long term value to the protocol and is obviously not sustainable in perpetuity.
First of all, I think the general feeling (in the Discord server, but elsewhere too) was that incentives were given at a pace too high to be sustainable, creating a sell pressure that was detrimental to the community of UNI holders.
It feels like we may learn a lot from observing what happens when liquidity incentives stop. Would it better to start the poll a few days after that, rather than before?
Thanks for doing this. It was much needed.
What is behind the decision to cut rewards in half? Is there any rhyme or reason to this.. or is it just a way to indicate a "phasing out" of some sort?
Thanks for doing this. It was much needed.
What is behind the decision to cut rewards in half? Is there any rhyme or reason to this.. or is it just a way to indicate a "phasing out" of some sort?
It seems to me that all we know right now is that Uniswap won back a ton of liquidity with the current reward setup. We don't know what kind of effect removing rewards would cause, and we don't know what kind of effect halving them would cause either.
Since the treasury gets 172m in Y1, is there really any harm in continuing the same 20m rewards we have for another 2 months, then use that time to make a more educated decision about how to proceed? Between phase 1 & phase 2 its still less than 25% of Y1 vesting.
If we maintain what we have now, then between now and February we could have more calls & get far deeper on the issue than we can right now.
It seems that our approaches' main difference is that @monet-supply and @tarun seem to focus more on the absolute numbers in liquidity growth, and I'm more focused on the retention rates of liquidity and volume.
Here's some numbers to consider:
The way I see it, both the liquidity programs Uniswap LPs enjoyed are quite successful overall.
The main achievement of the UNI liquidity mining program (LMP) is that it brought DAI and WBTC on par with the other two of the top-4 pairs on the exchange.
However, it appears that there's not much room to grow from here, especially with 50% of the incentives.
If we consider liquidity before and after UNI LMP (see "4 difference with 2" column), it signals that rewarding USDC and USDT was less beneficial in comparison to rewarding WBTC and DAI.
The volume's retention rate is quite impressive post LMP, but it looks like the volume is close to its cap at this point in time. So additional subsidies are unlikely to be efficient for the most part (see: "3 difference with 2").
As for liquidity, as you can see in the "Difference with 3" column, WBTC and USDC have lower liquidity retention rates than the other two pairs so far. It could signal that a bigger percentage of money in these pairs stayed there temporarily to enjoy the farming incentives.
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I think it makes sense to bring the discussion more to the quantitative realm, so we can figure out how good this decision is from the business perspective. It seems that there are some models to explore to guesstimate what we're trying to achieve with the program - and what efficiency we expect.
Of course, even if all the metrics say that the continuation of LMP is inefficient as a business proposal, it doesn't mean that the community shouldn't accept it due to other reasons.
Some of the possible reasons to continue distribution are:
These are strategic / political arguments. When I talked about overincentivization, I meant it as a quantitative argument in terms of volume/liquidity ratios.
c. For the HIGH risk of impermanent loss, we are underincentivized, even on WBTC Pools.
The IL on WBTC-ETH pair is lower than on USD-ETH pairs, because ETH+BTC moves in USD terms are correlated. The lower IL on WBTC-ETH pair also explains why it had bigger liquidity while being a less profitable pair in terms of UNI distribution APYs. Meaning: LPs really don't need any noticeable APY from volume fees on this pair as long as they get UNI distribution that gives them 10% APY.
If we take a look at it in isolation, the current 10% APY on WBTC-ETH pair could be viewed as LPs bet that most of the times ETH won't rise above 2.5x+ or fall below -60% compared to BTC. It is more complicated than that, but the general concept is there.
The statement that you make - that even the most overincentivized (comparatively) pool is underincentivized, implies that the economic design of Uniswap is not sustainable. I don't think this statement has a solid foundation.
b. BTC and ETH are traded everywhere, much more than those nonsense tokens. The demand to trade is simply higher.
While BTC is certainly important, Uniswap's core value proposition is that it is a trustless exchange where everyone can create a pair. And ETH is the main reference coin in the network. Being able to trade 'the nonsense tokens', being able to list your token without the need of exchange's permission is what Uniswap brings to the table in the first place.
Still, seeing as the other three pools are all stablecoins, you could almost view the rewards as BTC & stablecoins, rather than WBTC, DAI, USDC and USDT.
We can also make a further distinction: BTC, centralized stablecoins, decentralized stablecoin. There might be a case to be made to include only one centralized stablecoin in the program. The justification for this change would be strategic and ecosystem-related. It seems beneficial for DeFi ecosystem on Ethereum if DAI and WBTC grow adoption.
That said, when it comes to paying for ecosystem development, I think Sushiswap is already doing it just fine. And adding UNI rewards on top of Sushi rewards would just turn that into a pointless zero-sum game. It wouldn't add the liquidity to DeFi or retaining liquidity to Uniswap, it would just move the liquidity that doesn't stay from one incentive program to the other. I mean the liquidity with a very low retention rate, the farming money.
I personally don’t feel too strongly about how the rewards are distributed among these pools, so long as we can agree to only include (at most) these four pools for the next chapter as we consider other pools and incentive structures.
I'm definitely not suggesting adding rewards to pools other than the 4 at hand in this topic. However, I think it is quite useful to look at other pools to have reference points. I'll come back at it later with some numbers.
The temperature check poll has now passed. Details: https://gov.uniswap.org/t/temperature-check-should-uniswap-distribute-uni-to-liquidity-providers/8591/2?u=monet-supply
We will be pushing the start of the consensus check poll (phase 2 of the Uniswap governance process) until Monday November 23. This will allow additional time for community discussion and analysis before moving forward.
This dune analytics dashboard is pretty informative about the state of liquidity mining. WBTC, USDC, and USDT have see far higher outflows to Sushiswap than DAI, so optimizing the incentive program with a small reallocation from DAI/ETH to WBTC/ETH seems reasonable.
In the interest of expediency and moving the process forward, I will be submitting a Consensus Check poll tomorrow based on the updated incentives distribution plan:
This dune analytics dashboard is pretty informative about the state of liquidity mining. WBTC, USDC, and USDT have see far higher outflows to Sushiswap than DAI, so optimizing the incentive program with a small reallocation from DAI/ETH to WBTC/ETH seems reasonable.
In the interest of expediency and moving the process forward, I will be submitting a Consensus Check poll tomorrow based on the updated incentives distribution plan:
Over a longer-time frame this breaks down to roughly:
The poll will run for 5 days, with a majority of at least 50,000 UNI required to move forward to a full on chain governance proposal.
Nice math, I suppose it would help to maintain the btc surge :wink:, but not sure if we need it to maintain uniswap functionallity. Although liquidity droped shortly after the incentice ended, it stabilized now and trading volume is little changed. I don't see the need for a new incentive programm right now, but however this might change in the future. As a customer of uniswap (lp and trading) I need enough liquidity to allow for low slippage (right now it seems enough, still more than competitors), pools of all the tokens I like to trade (uni is superior to all competitors) for a one stop get all you want experience and low gas fees (not higher on uni compared to others on mainnet). As a lp I need enough trading volume to justify the risk of impermanent loss (also superior on uni). If we are seeing higher trading volume in relation to liquidity volume at competitors or if we see a drain in pools, these would be the criteria for me to think about new incentives.
edit: also if liqudity fell so much that slipage for the most traded pairs increase for the avarege trade size would be a reason for incentive, haven't figured out the numbers, but this is ofc something worth to look at to me.
You have to stake the LP tokens to receive UNI. Details here: https://gov.uniswap.org/t/learn-how-to-provide-liquidity-and-earn-uni/2320
You can use the discord chat for support questions: https://discord.com/channels/597638925346930701/606886929094541313
Many people who have received UNI via airdrop or by buying become concerned with its price movements. They, as holders of the asset, feel dissatisfied when UNI price goes down. There is one thing to consider, though:
When UNI price gets lower due to ongoing process of distribution, it is a healthy process that is beneficial for Uniswap governance.
Many people who have received UNI via airdrop or by buying become concerned with its price movements. They, as holders of the asset, feel dissatisfied when UNI price goes down. There is one thing to consider, though:
When UNI price gets lower due to ongoing process of distribution, it is a healthy process that is beneficial for Uniswap governance.
When LPs receive UNI rewards by providing value to the network, they can keep or sell them.
Distributing UNI rewards to LPs who keep them and become part of the governance process is a positive result.
LPs who sell the tokens self-retire themselves from Uniswap governance.
By doing so, they also bring the price down. When the price is lower, it creates a better buying opportunity for people who believe in Uniswap's future. So present and future investors in the protocol benefit.
The same logic applies to past users who received the airdrop.
The power in the network gets decentralized and distributed towards good actors.
In other words, you suggest bringing the UNI distribution APYs for participating pools closer to each other.
This would end up increasing the disparity in liquidity between the pools.
As it is a change to the status quo, I believe it needs more justification.
In other words, you suggest bringing the UNI distribution APYs for participating pools closer to each other.
This would end up increasing the disparity in liquidity between the pools.
As it is a change to the status quo, I believe it needs more justification.
The simplest, most equitable criteria for liquidity incentives is that the same amount of money is paid per $1M of liquidity in each rewarded pool.
This criterion doesn't make much sense to me.
There are diminishing returns on every new $1M of liquidity.
$1M worth of liquidity in a $50M pool is much more valuable than $1M worth of liquidity in a $900M pool.
However, if we find the diminishing returns criterion as the most crucial, we shouldn't continue the liquidity mining program for the proposed pools. And start rewarding other pairs instead.
I believe there should also be a criterion in place that we use to measure overincentivization .
For example, spending all the treasury money on the WBTC-ETH pair doesn't look right, even if it would bring larger liquidity to the platform.
Maybe we could explore the correlation of Volume and Liquidity among the pairs?
In my opinion, if we have an inverse correlation between Liquidity and Volume, it is a clear sign that the pair is heavily overincentivized. And WBTC-ETH pair is the most overincentivized pair in the initial program.
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There was a question in the survey about restructuring the existing pools based on APYs, and here's no clear preference there:
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We could state that we want to reward the Bitcoin community with the same APY we reward the other top-4 pools. Or that we want to bring more whale trading on WBTC on Uniswap. But that would be political statements. I can't detect a valid quantitative argument yet, though.
If we think about the slippage, the slippage below <0.01% is not even displayed in the UI. And 0.01% slippage already looks quite negligible given the fact that users pay 0.3% fee on top of it.
I see it as more of a medium/long term issue. As Sushiswap and other competitors gain liquidity, aggregators and users will slowly shift towards other venues for best execution.
I'm heartened by the amount of liquidity and volume that remains on Uniswap, but I don't think we can be complacent either.
@sommi please follow the community guidelines. Your candid feedback is appreciated. But your tone is unnecessary. :peace_symbol:
I just realized it - we already have all the data we need.
I just think that using governance UNI to continue liquidity incentive plan doesn't bring long term value to the protocol and is obviously not sustainable in perpetuity.
First of all, I think the general feeling (in the Discord server, but elsewhere too) was that incentives were given at a pace too high to be sustainable, creating a sell pressure that was detrimental to the community of UNI holders.
It feels like we may learn a lot from observing what happens when liquidity incentives stop. Would it better to start the poll a few days after that, rather than before?
Thanks for doing this. It was much needed.
What is behind the decision to cut rewards in half? Is there any rhyme or reason to this.. or is it just a way to indicate a "phasing out" of some sort?
Thanks for doing this. It was much needed.
What is behind the decision to cut rewards in half? Is there any rhyme or reason to this.. or is it just a way to indicate a "phasing out" of some sort?
It seems to me that all we know right now is that Uniswap won back a ton of liquidity with the current reward setup. We don't know what kind of effect removing rewards would cause, and we don't know what kind of effect halving them would cause either.
Since the treasury gets 172m in Y1, is there really any harm in continuing the same 20m rewards we have for another 2 months, then use that time to make a more educated decision about how to proceed? Between phase 1 & phase 2 its still less than 25% of Y1 vesting.
If we maintain what we have now, then between now and February we could have more calls & get far deeper on the issue than we can right now.
First of all, I think the general feeling (in the Discord server, but elsewhere too) was that incentives were given at a pace too high to be sustainable, creating a sell pressure that was detrimental to the community of UNI holders.
Thanks for the response.
Feelings are great, but we are about to make a major decision regarding a $2 billion DeFi product.
Major companies, organizations, entities, etc do not run on feelings. They run on data. Being a decentralized organization does not lift this burden from us. Business is business. Where is the data?
We are fully capable of gathering the necessary data. But we haven't yet (unless there is some research being done that I'm not aware of).
If we don't have the data, then there is no doubt that we should continue doing what is working right now until we have data that shows that a change will actually yield the intended outcome. Whether it's halving the reward, eliminating the reward, or doubling the reward - we should have strong evidence that it's going to work before we do it.
It feels like we may learn a lot from observing what happens when liquidity incentives stop. Would it better to start the poll a few days after that, rather than before?
I agree, we'll gain useful data from the ending of the liquidity incentive program - how much money stays in the pools, what are the unsubsidized fee returns, how much will slippage increase, etc. But, it may take governance a while to process this information and agree on the ideal incentive program. This proposal is meant to be a stop-gap which will keep Uniswap humming and support the user experience while governance builds consensus on a long term solution.
That being said, we can be responsive to any data coming in over the next few days, and make changes to the distribution plan as appropriate :slight_smile:
These rewards actually dilutes the token holders without providing benefits to LPs. The only advantage is that UNI can claim higher locked Total value but without any increase in volumes which is the real economic value of UNIswap.
Uniswap benefits from having deeper liquidity - allowing larger size swaps with lower slippage and a better trading experience. Anecdotally, some of the increased volume since August may be a result of having this deep liquidity available.
we should start asking the UNI team to look into ways of making Uni LPers votes count.
If you would like to submit a separate proposal on this, please feel free :) You can continue discussion on that topic in this thread.
First of all, I think the general feeling (in the Discord server, but elsewhere too) was that incentives were given at a pace too high to be sustainable, creating a sell pressure that was detrimental to the community of UNI holders.
Thanks for the response.
Feelings are great, but we are about to make a major decision regarding a $2 billion DeFi product.
Major companies, organizations, entities, etc do not run on feelings. They run on data. Being a decentralized organization does not lift this burden from us. Business is business. Where is the data?
We are fully capable of gathering the necessary data. But we haven't yet (unless there is some research being done that I'm not aware of).
If we don't have the data, then there is no doubt that we should continue doing what is working right now until we have data that shows that a change will actually yield the intended outcome. Whether it's halving the reward, eliminating the reward, or doubling the reward - we should have strong evidence that it's going to work before we do it.
It feels like we may learn a lot from observing what happens when liquidity incentives stop. Would it better to start the poll a few days after that, rather than before?
I agree, we'll gain useful data from the ending of the liquidity incentive program - how much money stays in the pools, what are the unsubsidized fee returns, how much will slippage increase, etc. But, it may take governance a while to process this information and agree on the ideal incentive program. This proposal is meant to be a stop-gap which will keep Uniswap humming and support the user experience while governance builds consensus on a long term solution.
That being said, we can be responsive to any data coming in over the next few days, and make changes to the distribution plan as appropriate :slight_smile:
These rewards actually dilutes the token holders without providing benefits to LPs. The only advantage is that UNI can claim higher locked Total value but without any increase in volumes which is the real economic value of UNIswap.
Uniswap benefits from having deeper liquidity - allowing larger size swaps with lower slippage and a better trading experience. Anecdotally, some of the increased volume since August may be a result of having this deep liquidity available.
we should start asking the UNI team to look into ways of making Uni LPers votes count.
If you would like to submit a separate proposal on this, please feel free :) You can continue discussion on that topic in this thread.
