Should the fee switch be flipped on at the earliest possible time? (March 15th)
The entire governance process from pre-proposal to formal onchain voting and execution of the code takes roughly 16 days not factoring additional time for debate to set specifics. So it is time to discuss the fee switch. Uniswap dwarfs the transaction volume of all the other dex's on Eth combined and LP's, while not earning UNI farming, make a killing from the transaction fees compared to lp'ing anywhere else.
My contention is a 5bps reduction will not have a material impact on people, and especially whales, lp'ing in uniswap due the offset by the high transaction fees generated. Furthermore, large lp's are likely to also be large uniswap stake holders and will also benefit.
Therefore I believe not only must we flip the fee switch, but the mechanism for rewarding uni stakers should be a buyback and distribution of uni tokens just like the sushiswap model. Burns simply do not work in practice as they do on paper for the material impact on the price of the token.
Thoughts? And also why the lack of active discussion on such a monumental topic that could turn staking Uni tokens into a source of income for people for decades to come.
Should the fee switch be flipped on at the earliest possible time? (March 15th)
The entire governance process from pre-proposal to formal onchain voting and execution of the code takes roughly 16 days not factoring additional time for debate to set specifics. So it is time to discuss the fee switch. Uniswap dwarfs the transaction volume of all the other dex's on Eth combined and LP's, while not earning UNI farming, make a killing from the transaction fees compared to lp'ing anywhere else.
My contention is a 5bps reduction will not have a material impact on people, and especially whales, lp'ing in uniswap due the offset by the high transaction fees generated. Furthermore, large lp's are likely to also be large uniswap stake holders and will also benefit.
Therefore I believe not only must we flip the fee switch, but the mechanism for rewarding uni stakers should be a buyback and distribution of uni tokens just like the sushiswap model. Burns simply do not work in practice as they do on paper for the material impact on the price of the token.
Thoughts? And also why the lack of active discussion on such a monumental topic that could turn staking Uni tokens into a source of income for people for decades to come.
I agree this idea , The on fee switch and liquidity should be turned on simultaneously
I agree this idea , The on fee switch and liquidity should be turned on simultaneously
start the consensus check
start the consensus check
I am totally agree with this lets do it go on
lets do it we are all ready
update? it seems real situation lets go on to the moon
I am totally agree with this lets do it go on
lets do it we are all ready
update? it seems real situation lets go on to the moon
i am agree if it is updated
does it updated so lets do it
Yeah, can any whale make a proposal? I’m sure it will be passed if it is submitted.
If there aren’t thoses buyers that mean that the governance either messed up and is paying more money than something is worth or it isn’t following profit as a target (like funding charity), at this point there is no reason to talk about making money, it’s just not a goal anymore.
If there aren’t thoses buyers that mean that the governance either messed up and is paying more money than something is worth or it isn’t following profit as a target (like funding charity), at this point there is no reason to talk about making money, it’s just not a goal anymore.
We need fees switch activation. A lot of protocols on Ethereum give some return to token holders.
Market share is a moving target and Uniswap already has the most shares among all DEXs already. We should start with turning on fee switch and if market share comes down, we can then start liquidity mining.
Can you start the consensus check? I’m sure it will get wide support.
With a second thought, I don’t think buy and burn is a good approach. Staking UNI to get yield from the fee is a better way.
i am agree if it is updated
does it updated so lets do it
Yeah, can any whale make a proposal? I’m sure it will be passed if it is submitted.
If there aren’t thoses buyers that mean that the governance either messed up and is paying more money than something is worth or it isn’t following profit as a target (like funding charity), at this point there is no reason to talk about making money, it’s just not a goal anymore.
If there aren’t thoses buyers that mean that the governance either messed up and is paying more money than something is worth or it isn’t following profit as a target (like funding charity), at this point there is no reason to talk about making money, it’s just not a goal anymore.
We need fees switch activation. A lot of protocols on Ethereum give some return to token holders.
Market share is a moving target and Uniswap already has the most shares among all DEXs already. We should start with turning on fee switch and if market share comes down, we can then start liquidity mining.
Can you start the consensus check? I’m sure it will get wide support.
With a second thought, I don’t think buy and burn is a good approach. Staking UNI to get yield from the fee is a better way.
thats whats i think i was totally agree. feel worth even forcing myself to read it all and try to digest as much as can, simplify what should be. in fact, the improvement should have happened earlier. less debating things that shouldn’t need to be debated, focusing on joint development, directly attracting others to get involved. but unfortunately, it never happened as expected.
thats whats i think i was totally agree. feel worth even forcing myself to read it all and try to digest as much as can, simplify what should be. in fact, the improvement should have happened earlier. less debating things that shouldn’t need to be debated, focusing on joint development, directly attracting others to get involved. but unfortunately, it never happened as expected.
I will support flipping the fee switch, as uniswap v3 now being the best capital efficient product in the market, with the best branding, no other dex can just "fork" another v3, uniswap is siting at a competitive position to gain fee without extra incentives for LPs. Its best for UNI holders including the team and investors to gain profit from their work and capital to give economic incentive for the team to build better product and investors to gain more long term trust in uniswap.
thank you, for posting this.
I know that I'm repeating myself here and I'm sorry, but maybe the suggestion about point 3. got swamped last time:
Basic Idea: Enable UNI-holders to gain slightly higher returns on their provided liquidity. This bonus could theoretically scale with the inidividual LP's amount of UNI-tokens, though I'd highly recommend diminishing returns. With this approach LPs as well as UNI-holders would profit on the one hand while on the other hand UNI-hodlers would NOT be rewarded for idling around. The diminishing returns could be used to incentivise an increased degree of decentralisation / token-spread and thus keep some UNI-token in circulation. The said bonus-LP-gains would be funded 100% by the extra fees from enabling the fee-switch.
I know that I'm repeating myself here and I'm sorry, but maybe the suggestion about point 3. got swamped last time:
Basic Idea: Enable UNI-holders to gain slightly higher returns on their provided liquidity. This bonus could theoretically scale with the inidividual LP's amount of UNI-tokens, though I'd highly recommend diminishing returns. With this approach LPs as well as UNI-holders would profit on the one hand while on the other hand UNI-hodlers would NOT be rewarded for idling around. The diminishing returns could be used to incentivise an increased degree of decentralisation / token-spread and thus keep some UNI-token in circulation. The said bonus-LP-gains would be funded 100% by the extra fees from enabling the fee-switch.
I'm no coder, but I guess it would be possible to realise this mechanism with some sort of staking of UNI-tokens. This way owners could put their UNI-token to use AND STILL be able to vote in governance (at least to my understanding). Something that - so far - did not work for UNI-token that are trapped in LPs. I see a problem with preventing UNI-whales to simply spread their UNI across several addresses and thus workaround the diminishing returns. But maybe there is a solution to this?
In summary I guess I overlooked several red-flags and drawbacks of that idea, but so far it seems to me to incentivice new and small UNI-holders as well as LP-whales (but NOT UNI-whales) and negates the problem of UNI-hodlers being rewarded for not doing or risking anything.
The increased efficiency of V3 will provide enough incentive to move liquidity. According to Hayden Adams (recent interviews).
What is a reasonable fee structure?
planned on publishing a small Medium post on the pros and cons with our ultimate recommendation.
Any update on when/if this will be published? With v3 a couple of weeks out, it's prime time to at least get discussion going on the fee switch activation for v2.
And to clearify this here, the @Uniswap team wrote on Discord they can not pull the switch or support it on twitter - because of regulatorily issues - they wrote in the Discord the proposal has to come from the community without contribution from the Uniswap Labs Team. (But I guess they would support the vote as it sound)
@HarvardLawBFI glad to hear you have a write up in the works! The medium post would be hugely beneficial for the exposure if nothing else. Really anything that gets this conversation going, and more mainstream is beneficial to the project at this point. That said, I'm sure the content will be stellar, and look forward to reading your analysis. Any updates on when you're planning to publish?
I will support flipping the fee switch, as uniswap v3 now being the best capital efficient product in the market, with the best branding, no other dex can just "fork" another v3, uniswap is siting at a competitive position to gain fee without extra incentives for LPs. Its best for UNI holders including the team and investors to gain profit from their work and capital to give economic incentive for the team to build better product and investors to gain more long term trust in uniswap.
thank you, for posting this.
I know that I'm repeating myself here and I'm sorry, but maybe the suggestion about point 3. got swamped last time:
Basic Idea: Enable UNI-holders to gain slightly higher returns on their provided liquidity. This bonus could theoretically scale with the inidividual LP's amount of UNI-tokens, though I'd highly recommend diminishing returns. With this approach LPs as well as UNI-holders would profit on the one hand while on the other hand UNI-hodlers would NOT be rewarded for idling around. The diminishing returns could be used to incentivise an increased degree of decentralisation / token-spread and thus keep some UNI-token in circulation. The said bonus-LP-gains would be funded 100% by the extra fees from enabling the fee-switch.
I know that I'm repeating myself here and I'm sorry, but maybe the suggestion about point 3. got swamped last time:
Basic Idea: Enable UNI-holders to gain slightly higher returns on their provided liquidity. This bonus could theoretically scale with the inidividual LP's amount of UNI-tokens, though I'd highly recommend diminishing returns. With this approach LPs as well as UNI-holders would profit on the one hand while on the other hand UNI-hodlers would NOT be rewarded for idling around. The diminishing returns could be used to incentivise an increased degree of decentralisation / token-spread and thus keep some UNI-token in circulation. The said bonus-LP-gains would be funded 100% by the extra fees from enabling the fee-switch.
I'm no coder, but I guess it would be possible to realise this mechanism with some sort of staking of UNI-tokens. This way owners could put their UNI-token to use AND STILL be able to vote in governance (at least to my understanding). Something that - so far - did not work for UNI-token that are trapped in LPs. I see a problem with preventing UNI-whales to simply spread their UNI across several addresses and thus workaround the diminishing returns. But maybe there is a solution to this?
In summary I guess I overlooked several red-flags and drawbacks of that idea, but so far it seems to me to incentivice new and small UNI-holders as well as LP-whales (but NOT UNI-whales) and negates the problem of UNI-hodlers being rewarded for not doing or risking anything.
The increased efficiency of V3 will provide enough incentive to move liquidity. According to Hayden Adams (recent interviews).
What is a reasonable fee structure?
planned on publishing a small Medium post on the pros and cons with our ultimate recommendation.
Any update on when/if this will be published? With v3 a couple of weeks out, it's prime time to at least get discussion going on the fee switch activation for v2.
And to clearify this here, the @Uniswap team wrote on Discord they can not pull the switch or support it on twitter - because of regulatorily issues - they wrote in the Discord the proposal has to come from the community without contribution from the Uniswap Labs Team. (But I guess they would support the vote as it sound)
@HarvardLawBFI glad to hear you have a write up in the works! The medium post would be hugely beneficial for the exposure if nothing else. Really anything that gets this conversation going, and more mainstream is beneficial to the project at this point. That said, I'm sure the content will be stellar, and look forward to reading your analysis. Any updates on when you're planning to publish?
I think this is a hypothesis that needs to be tested.
might this demonstrate that a fee switch in general can lead LPs to flee Uniswap—i.e. if in the future we wanted to turn on the fee switch in v3 in the future a response we’d face is, “when you turned on the switch for v2 it led all the LPs to leave, so if we turn it on in v3, LPs will leave to a different DEX.”
I think this is a hypothesis that needs to be tested.
might this demonstrate that a fee switch in general can lead LPs to flee Uniswap—i.e. if in the future we wanted to turn on the fee switch in v3 in the future a response we’d face is, “when you turned on the switch for v2 it led all the LPs to leave, so if we turn it on in v3, LPs will leave to a different DEX.”
At worst the fee structure would be on par with existing competitors.
UNI holders that don't participate in governance are still holders and shouldn't be punished. Expecting complete participation is impractical. Not all shareholders have the ability and resources to provide value. In addition to the possible outcomes mentioned, at least it would give the impression that the community can experiment and learn, rather than stagnation.
It seems like you did not read my post clearly lol. I described the network-effect and how the fee-switch would start the network-effect and therefore also increases volume for Uniswap by far. (I clearly wrote to turn it on in V3)
This summary would be a great and valueable contribution, not only to UniSwap but also (likely) from a research-perspective. I'm no expert in this field but I can imagine that the concept of decentralized / distributed governance opens up quite some new research areas!
I guess (and hope) this pro / con list for the fee switch will consider multiple perspectives though, in order to have a neutral baseline? :slight_smile:
This summary would be a great and valueable contribution, not only to UniSwap but also (likely) from a research-perspective. I'm no expert in this field but I can imagine that the concept of decentralized / distributed governance opens up quite some new research areas!
I guess (and hope) this pro / con list for the fee switch will consider multiple perspectives though, in order to have a neutral baseline? :slight_smile:
About the fee-switch itself: I've got to admit that the Uni-Token having some additional financial, passive incentive was / is a (psychologically) nice thing, especially for small fish like myself (rather plancton). I do also understand the party that does reject this mechanism (why should you get money for "having stuff sitting around idle?"... well... banks seem to have an answer about this :D). In the end I'd have liked something like this: as long as you hold uni-token on an adress, all LP that same address actually provides receives a minor boost in collected fees. The more UNI you've got, the bigger that bonus (though diminishing returns should really be considered). ALL of this bonus payment can be paid from the marginally increased trading fee that is enabled after activating the fee-switch. This way both UNI-holders and LP-providers would be fine and the distribution of UNI-token should even be optimized over time (due to said diminishing returns).
I'm not saying this is the best solution as I am very likely missing LOTS of aspects, but to me - so far - it seemed fair and interesting at the same time.
I don't think we'll see LPs leaving over the fee switch implementation. They're much less elastic than many seem to think especially given that when it comes to ETH based DEXs UNI is by far the biggest player by volume, and that's unlikely to change. Furthermore, when it comes to migration incentives, having the fee implemented across the board on V2 will help push LPs to migrate to V3 come May. Perhaps I'm wrong though. Should that be the case, and there be a need to attract more LPs later on, it could be done with a portion of the fees earned from turning on the switch.
So far as I've seen the fees earned will accrue to the treasury. From there, it's a whole other matter what governance decides to do with that additional capital.
I think using a fee switch on V2 to incentivize migration to V3, as _uniswapper suggested, should be considered further.
Probably best to still handle this within the community.
From my understanding, we either need a single delegate with enough votes to kick off the proposal, or enough smaller holders to delegate someone their votes so they can do the same. Correct?
Any ideas on the best way to contact large holders? And/or how to rally small holders to delegate their votes to a representative?
I agree with you it makes no sense to turn it now on in V2, but I hope you will propose a vote after the v3 launch! I think you miss out some points with why reward UNI holders, if you think about it the big value behind it is the network-effect. If UNI holders get rewards, more people trust in the protocol more people want to hold UNI -> UNI is in the news. So more people talk about Uniswap, more people use Uniswap -> LP get more rewards -> UNI holders get more rewards -> more people use Uniswap, talk about it and spread it.
The clear benefit is the network-effect and the catalysts for it would be turning on the fee switch in v3 so UNI holders have real value and therefore use the network-effect to get the volume of the DEX to surpass all major centralized exchanges.
@allo, I hear you and I agree with most of what you're saying. Perhaps I wasn't clear enough in my previous post. I don't see engaging the fee switch on v2 as a short term "rent-seeking" or "easy gains" move. Rather, it goes hand in hand with the transition to v3, and LP migration incentives. At a base level, engaging the switch on the current protocol would work as a negative incentive for LPs to migrate. They would want to move from v2 pools with higher flat fees to v3 pools with lower or no fees (at inception) as those will naturally provide higher yields for them. In addition, the accrued fees from the switch help bolster the treasury. This increase in treasury funds can then be allocated, if needed, to additional positive incentives (UNI distribution) for LPs to migrate. In this way we can provide both positive, and negative incentives for LPs to migrate to v3 next Month.
sad this is a ghost town, hopefully this changes post V3
I think this is a hypothesis that needs to be tested.
might this demonstrate that a fee switch in general can lead LPs to flee Uniswap—i.e. if in the future we wanted to turn on the fee switch in v3 in the future a response we’d face is, “when you turned on the switch for v2 it led all the LPs to leave, so if we turn it on in v3, LPs will leave to a different DEX.”
I think this is a hypothesis that needs to be tested.
might this demonstrate that a fee switch in general can lead LPs to flee Uniswap—i.e. if in the future we wanted to turn on the fee switch in v3 in the future a response we’d face is, “when you turned on the switch for v2 it led all the LPs to leave, so if we turn it on in v3, LPs will leave to a different DEX.”
At worst the fee structure would be on par with existing competitors.
UNI holders that don't participate in governance are still holders and shouldn't be punished. Expecting complete participation is impractical. Not all shareholders have the ability and resources to provide value. In addition to the possible outcomes mentioned, at least it would give the impression that the community can experiment and learn, rather than stagnation.
It seems like you did not read my post clearly lol. I described the network-effect and how the fee-switch would start the network-effect and therefore also increases volume for Uniswap by far. (I clearly wrote to turn it on in V3)
This summary would be a great and valueable contribution, not only to UniSwap but also (likely) from a research-perspective. I'm no expert in this field but I can imagine that the concept of decentralized / distributed governance opens up quite some new research areas!
I guess (and hope) this pro / con list for the fee switch will consider multiple perspectives though, in order to have a neutral baseline? :slight_smile:
This summary would be a great and valueable contribution, not only to UniSwap but also (likely) from a research-perspective. I'm no expert in this field but I can imagine that the concept of decentralized / distributed governance opens up quite some new research areas!
I guess (and hope) this pro / con list for the fee switch will consider multiple perspectives though, in order to have a neutral baseline? :slight_smile:
About the fee-switch itself: I've got to admit that the Uni-Token having some additional financial, passive incentive was / is a (psychologically) nice thing, especially for small fish like myself (rather plancton). I do also understand the party that does reject this mechanism (why should you get money for "having stuff sitting around idle?"... well... banks seem to have an answer about this :D). In the end I'd have liked something like this: as long as you hold uni-token on an adress, all LP that same address actually provides receives a minor boost in collected fees. The more UNI you've got, the bigger that bonus (though diminishing returns should really be considered). ALL of this bonus payment can be paid from the marginally increased trading fee that is enabled after activating the fee-switch. This way both UNI-holders and LP-providers would be fine and the distribution of UNI-token should even be optimized over time (due to said diminishing returns).
I'm not saying this is the best solution as I am very likely missing LOTS of aspects, but to me - so far - it seemed fair and interesting at the same time.
I don't think we'll see LPs leaving over the fee switch implementation. They're much less elastic than many seem to think especially given that when it comes to ETH based DEXs UNI is by far the biggest player by volume, and that's unlikely to change. Furthermore, when it comes to migration incentives, having the fee implemented across the board on V2 will help push LPs to migrate to V3 come May. Perhaps I'm wrong though. Should that be the case, and there be a need to attract more LPs later on, it could be done with a portion of the fees earned from turning on the switch.
So far as I've seen the fees earned will accrue to the treasury. From there, it's a whole other matter what governance decides to do with that additional capital.
I think using a fee switch on V2 to incentivize migration to V3, as _uniswapper suggested, should be considered further.
Probably best to still handle this within the community.
From my understanding, we either need a single delegate with enough votes to kick off the proposal, or enough smaller holders to delegate someone their votes so they can do the same. Correct?
Any ideas on the best way to contact large holders? And/or how to rally small holders to delegate their votes to a representative?
I agree with you it makes no sense to turn it now on in V2, but I hope you will propose a vote after the v3 launch! I think you miss out some points with why reward UNI holders, if you think about it the big value behind it is the network-effect. If UNI holders get rewards, more people trust in the protocol more people want to hold UNI -> UNI is in the news. So more people talk about Uniswap, more people use Uniswap -> LP get more rewards -> UNI holders get more rewards -> more people use Uniswap, talk about it and spread it.
The clear benefit is the network-effect and the catalysts for it would be turning on the fee switch in v3 so UNI holders have real value and therefore use the network-effect to get the volume of the DEX to surpass all major centralized exchanges.
@allo, I hear you and I agree with most of what you're saying. Perhaps I wasn't clear enough in my previous post. I don't see engaging the fee switch on v2 as a short term "rent-seeking" or "easy gains" move. Rather, it goes hand in hand with the transition to v3, and LP migration incentives. At a base level, engaging the switch on the current protocol would work as a negative incentive for LPs to migrate. They would want to move from v2 pools with higher flat fees to v3 pools with lower or no fees (at inception) as those will naturally provide higher yields for them. In addition, the accrued fees from the switch help bolster the treasury. This increase in treasury funds can then be allocated, if needed, to additional positive incentives (UNI distribution) for LPs to migrate. In this way we can provide both positive, and negative incentives for LPs to migrate to v3 next Month.
sad this is a ghost town, hopefully this changes post V3
Im not sure if this applies here as well but it appears that very few participate in governance which does not help UNI as a whole, an incentive for those who partake in governance should be also considered.
I concur to this change. Uniswap can not become stagnant in the realm of Defi and LPs. With the competition and how everything appears to be headed, this can benefit all but what is to come of the lower amount stakes? I feel there should be some incentive to bring in more stakers who do not have the ability to add thousands or millions to an LP.
Great. That brings me back to my original post then of how best to go about kicking this off. We either need a single delegate with enough votes to kick off the proposal, or enough smaller holders to delegate someone their votes so they can do the same. I think there may be another way that was discussed a bit last year where a form of crowd proposal is created without needing 1% of the UNI supply.
Any ideas for the above? Best way to contact large holders? How to rally small holders to delegate their votes to a representative? Method for creating a proposal that then is backed after the fact?
Great. That brings me back to my original post then of how best to go about kicking this off. We either need a single delegate with enough votes to kick off the proposal, or enough smaller holders to delegate someone their votes so they can do the same. I think there may be another way that was discussed a bit last year where a form of crowd proposal is created without needing 1% of the UNI supply.
Any ideas for the above? Best way to contact large holders? How to rally small holders to delegate their votes to a representative? Method for creating a proposal that then is backed after the fact?
@chrisblec did you have any success with Twitter?
Why not automatic staking with no reinvestment for V3? There definitely needs to be a small return to UNI holders off of transactions...
now if UNI could somehow boost transaction completion or improve user experience when actually making swaps, like a toggable attachment to wallets to allow for automatic transfer approvals then that would be great as a means to keep liquidity providers in because it will draw more volume
Just do it! UNI so secretive and no update for so long.
The core team can neither vote for or against a fee switch at all, legally that makes uniswap more like a security. The fee switch implementation needs to come from the community and be voted on by the community.
well, fish.vote can help with that.
The 2.5m submission needs to come from one single address right? Only a handful of UNI holders can do that right now.
Im not sure if this applies here as well but it appears that very few participate in governance which does not help UNI as a whole, an incentive for those who partake in governance should be also considered.
I concur to this change. Uniswap can not become stagnant in the realm of Defi and LPs. With the competition and how everything appears to be headed, this can benefit all but what is to come of the lower amount stakes? I feel there should be some incentive to bring in more stakers who do not have the ability to add thousands or millions to an LP.
Great. That brings me back to my original post then of how best to go about kicking this off. We either need a single delegate with enough votes to kick off the proposal, or enough smaller holders to delegate someone their votes so they can do the same. I think there may be another way that was discussed a bit last year where a form of crowd proposal is created without needing 1% of the UNI supply.
Any ideas for the above? Best way to contact large holders? How to rally small holders to delegate their votes to a representative? Method for creating a proposal that then is backed after the fact?
Great. That brings me back to my original post then of how best to go about kicking this off. We either need a single delegate with enough votes to kick off the proposal, or enough smaller holders to delegate someone their votes so they can do the same. I think there may be another way that was discussed a bit last year where a form of crowd proposal is created without needing 1% of the UNI supply.
Any ideas for the above? Best way to contact large holders? How to rally small holders to delegate their votes to a representative? Method for creating a proposal that then is backed after the fact?
@chrisblec did you have any success with Twitter?
Why not automatic staking with no reinvestment for V3? There definitely needs to be a small return to UNI holders off of transactions...
now if UNI could somehow boost transaction completion or improve user experience when actually making swaps, like a toggable attachment to wallets to allow for automatic transfer approvals then that would be great as a means to keep liquidity providers in because it will draw more volume
Just do it! UNI so secretive and no update for so long.
The core team can neither vote for or against a fee switch at all, legally that makes uniswap more like a security. The fee switch implementation needs to come from the community and be voted on by the community.
well, fish.vote can help with that.
The 2.5m submission needs to come from one single address right? Only a handful of UNI holders can do that right now.
Lets do it!! (I think there is lack of knowledge on uniswap governance in here. We need to make a youtube video on it). If no one responds soon lets push to consensus.
Yeah, thats the downside. Governance is expensive atm...
Im not sure an agreement was made, but buy and burn/buy and keep works either way. Just depends on what the delegates prefer.
The last time the delegates preferred buy and keep.
I believe as long as a proposal is formally submitted. The community will for sure to vote for it. A decentralized community shouldn’t wait for the SEC to give guidance.
Do we have the 2,5M votes to formally submit it?
It could be proposed if a big delegate decides its a good time to do it.
Timeline aside, have we settled on the way of turning the fee switch on? Would it be buy back and burn if that days arrive? Presumably after SEC probe
Lets do it!! (I think there is lack of knowledge on uniswap governance in here. We need to make a youtube video on it). If no one responds soon lets push to consensus.
Yeah, thats the downside. Governance is expensive atm...
Im not sure an agreement was made, but buy and burn/buy and keep works either way. Just depends on what the delegates prefer.
The last time the delegates preferred buy and keep.
I believe as long as a proposal is formally submitted. The community will for sure to vote for it. A decentralized community shouldn’t wait for the SEC to give guidance.
Do we have the 2,5M votes to formally submit it?
It could be proposed if a big delegate decides its a good time to do it.
Timeline aside, have we settled on the way of turning the fee switch on? Would it be buy back and burn if that days arrive? Presumably after SEC probe
The topic of the fee switch has died down with the SEC conducting a formal probe of the Uniswap Labs so its hard to say whats gonna happen when.
If I were you, I´d not count on the fee switch turning on anytime soon.
See, increase does not equal to proper forward projection of fees and volume. Not all of UNI would be accounted for in the first example, but I will not delve deeper there because nearly everybody agrees its not the optimal way to do things.
In order to do a solid analysis of the buyback programme, you´d have to analyse sell volume and buy volume for the entire day and then add on top of the buy volume the amount which would the money coming from the fee contribute. Saying the contribution would be low is just outright irresponsible without conducting a proper analysis with deeper meaning. Another factors which cannot be accounted for via a simple analysis are the psychological effects of the market participants: there might be a switch of behavior when it comes to the supply of UNI which is totally left out. Such superficial estimates do not even provide a raw estimate of the effect the buyback programme would have.
Your assumptions lack a forward projectment of UNI´s fees and volume
The current reality are somewhere between 2% and 1% of APY. This is already accounting for a huge increase.
The buyback analysis is done really poorly
Your assumptions lack a forward projectment of UNI´s fees and volume
The current reality are somewhere between 2% and 1% of APY. This is already accounting for a huge increase.
The buyback analysis is done really poorly
The buyback I know but I just don't have any better solution, comparing it to UNI's volume is just to show that it's nearly nothing and thus we can't really expect it to have much impact (it could double the price for example).
If you have any better idea about the buyback, then share it.
Your assumptions lack a forward projectment of UNI´s fees and volume; therefore, they are both invalid. However, Im glad we both agree on the fact that the buyback is the way to do things. Its unfortunate that you cant vote on it.
The buyback analysis is done really poorly. Sorry, but I might have missed it: what relevance does the volume analysis have to the price?
I really think distributive fee switch maximalist over estimate the fee switch. This also applies to buyback fee switch maximalist. Let me share this tiny equation I've just made to proove my point:
I really think distributive fee switch maximalist over estimate the fee switch. This also applies to buyback fee switch maximalist. Let me share this tiny equation I've just made to proove my point:
(dailyVolume*feeTierRatio*feeSwitchRatio*numberOfDays)/(expectedUniAffectedByIt*UniPrice)
dailyVolume is the daily volume on uniswap, the goal is to extract the fees we are gonna capture from it, I'll take 1b5 as this is clearly on the upper hand of what fees uniswap have seen, this doesn't make a huge difference anyway as it only scales linearly (you would need a *20 to start see some good numbers anyway)feeTierRatio is the fee tier used by pools, idealy you would not use the volume but the number of fees but I was too lazy to find it as this wasn't obvious to me. I'll then consider that all swaps on uniswap are made at 1% fee tier (the biggest).feeSwitchRatio the part of that fees that are going for fee switch, I'll take 1/6 as this is the only possible value on V2.numberOfDays is how long thoses fees acumulate, I use a plain multiplication and not proper APY as fee switch has no compounding feature, unless you manually go add them back yourself as LP (or other invesment) but this depends on case per case and complicates a lot for not a huge difference.expectedUniAffectedByIt is the number of shares the fee switch is gonna be broken into, I'll take 564m970k520 as this is the current circulating supply of uni (according to coinmarketcap) and you can resonably expect it to be lower (as not all people would likely stake their UNI into a fee switch distributor contract)UniPrice is the price of uni, this is used to normalise this with the volume with have on the left hand of the division (you could remove this to have a share per UNI)Just trying to see how much USD would be yielded over one year per UNI gives use : (1500000000*0.01/6*365)/(564970520) = 1$60, remember that I've already over estimated that likely.
We can also include the current price too: (1500000000*0.01/6*365)/(564970520*27.27) we then see that per $ invested we produced 5.9 cents over 1 year (so ~6%).
Fun thing then, given my estimation, how much should the price of UNI should be for the feeswitch yields to be equaly 40% apy (which was a high but still realistic target for V2), we then replace the price by x and ask to solve for x given a target of 40 cents produced per year: solve (1500000000*0.01/6*365)/(564970520*x)=0.4 for x = 4$.
I'm not saying that the price is gonna jump by 4$, nor that it's gonna lower it self at 4$. It's just that in comparision to the current price, if a distributive fee switch was enabled, the UNI price is very likely not gonna be effected much by it (it might actually crash if most people are here for the money, as if you want only money, a distributive fee switch makes no sense, sell your UNI and provide LP, use charm.fi and get way more money that way).
To compare this to a buyback it's a bit more hard, as this is a slow steady flow of money, I can't just go input that into 1inch and say "well the price impact is xx%" as there is lots of trading on CEX such as binance too. So I'll just compare the number of money that this would generate per day to the trading volume of UNI. This is simply : dailyVolume*feeTierRatio*feeSwitchRatio as we don't try to correct for any length of time nor share between uni holders.
This is 1500000000*0.01/6 = 2m5$ compare this to the ~400m of $ traded in the past 24h, and note that 400m$ is in the very low average compare to the past, if you go back 1 week we were arround 1b$.
Remember that this is a huge overestimation since I don't even need precise value to proove my point, the 2m5 of fee switch money is already about twice the actual fees to LP in the past day (the main part is likely that most volume is made on 0.3% and 0.05%, not 1% like I estimated).
Lets not turn this into personal attacks, but it is true that in order to post relevant comments on such matters one should own the UNI token...otherwise, it is highly suspicious whether the actor´s intent is truly for the cause of the protocol.
The UNI fee switch topic will be dealt with. UNI holders do not worry.
After the Community Call on the 16th of June, the topic of the fee switch being turned on as a, "Buyback and Keep" model was thoroughly discussed with the community being overwhelmingly in favor of implementing such a proposal.
Some key delegates also expressed their approval of such a proposal and the next steps will be discussed on the Penguin´s Party discord.
I´ll keep you in the loop.
Well, see, in your proposal. There is no incentive to hold UNI. Why would you hold UNI?
We need to create incentives for LPs to get involved in the governance and thats why providing a buyback for the sake of a buyback is the perfect way to do it.
As I was informed, you hold no UNI yourself Jorropo so its time to change it and join the governance of the protocol :smiley:
Well, see, in your proposal. There is no incentive to hold UNI. Why would you hold UNI?
We need to create incentives for LPs to get involved in the governance and thats why providing a buyback for the sake of a buyback is the perfect way to do it.
As I was informed, you hold no UNI yourself Jorropo so its time to change it and join the governance of the protocol :smiley:
Im glad we can both agree on the fact that the buyback provides more benefit for both the protocol and the token holders + forces LPs to get involved as well otherwise they´ll lose out on the income.
Win - win!
Why bother selling liquidity away ? If there are people willing to buy the liquidty with UNI that mean they except to make money with this.
Why not just add liquidity it self and use the 35% APY we were seeing on stable / ETH on V2 for example (I don't give APY example for V3 due to ranging you know).
Liquidity holders hold UNI too. Pull the switch all the way
For me a sell of UNI, would aim at finnancing a project of the governance, not selling stuff just to sell stuff.
Except than a buyback, do you have any plans for the money of the buy back ?
UNI sold would create benefit for Uniswap without actually giving anything back to the UNI token holders
Either I'm missing something obvious or what you say is completely wrong. A UNI sold would get back DAI, ETH, ... whatever the sold accepts. Then the UNI holders would use thoses tokens to invest in what they want and the investiment made (I give the example of self rebalancing liquidity on some important pools) would yield profits for the governance (that could be used to buy back uni, distribute, ...). For me a strong alternative to fee switch is trading money now by selling some UNI, with a promise of money later for thoses who stay (which is how initial invesment works in corporations, emit share, get money, invest money, wait, make money, shares worth more).
Yes, but the UNI sold would create benefit for Uniswap without actually giving anything back to the UNI token holders effectively turning them into holding a charity case token. I dont think people would be thrilled about doing that so.
Why would you buy UNI if you know that all the benefits will go to using Uniswap instead? I´d rather than just consume the benefits, why would I pay for them by buying and holding UNI? It has to be a balanced trade off.
Yes, but the UNI sold would create benefit for Uniswap without actually giving anything back to the UNI token holders effectively turning them into holding a charity case token. I dont think people would be thrilled about doing that so.
Why would you buy UNI if you know that all the benefits will go to using Uniswap instead? I´d rather than just consume the benefits, why would I pay for them by buying and holding UNI? It has to be a balanced trade off.
And you do support a buyback programme, you just dont know it yet :) Deep down, you support it all the way cause you know its the proper way to do things.
It's not an argument, I can not hold any UNI and still think I have better options than a buyback, if you think buyback or distributing fee switch is a good idea just propose let a vote happen and we will see the results.
I heard it with my own ears from you in the Jun UNI community call (as well as saw it in the call chat), that you don't hold any UNI and for you it is way too expensive. You even managed to co-host that meeting and it was blatantly one sided because of this. It is obvious you are trying to thwart/bypass the main governance mechanism which resides in the value in the UNI GOVERNANCE token. I don't care if you are the largest LP in the world, if UNISWAP is to be stay the #1 decentralized exchange its governance token must not loose value the way you pretend by wiping your bottom with it as if it were paper money.
Using a sell order (not a V3 based one as they are biddirectional until completion, a custom tiny fixed ratio swapping contract would be better I guess), this couldn’t make the price fall by itself, this could only let it not raise
Using a sell order (not a V3 based one as they are biddirectional until completion, a custom tiny fixed ratio swapping contract would be better I guess), this couldn’t make the price fall by itself, this could only let it not raise
Your points are not valid as the treasury value is derived from the UNI price token.....Lower price = more UNI needs to be sold from the treasury to fund the governance. Higher price = less UNI has to be sold to achieve the same means. You cant simply infer that the value attached to the treasury comes from thin air. If people decide they do not want to subsidize a charity like token, then there is no governance to do.
I never said that flipping the fee switch in the form of a buyback would be bad. In fact, I do think its the best way to go about it and I am glad that you support flipping the fee switch on for the buyback.
So, lets do it! :)
This will likely not create much buy pressure (if any at all).
But this will make the governance more rich.
This will likely not create much buy pressure (if any at all).
But this will make the governance more rich.
Thoses are just 2 different targets. I don't think a buyback for the sake of a buyback achieve much of anything that the providing of LP doesn't (from point of view of LP, from point of view of your wallet I can understand that a buyback is tempting), for me this sounds a lot like the charity coin you described earlier. Providing liquidity makes :
The topic of the fee switch has died down with the SEC conducting a formal probe of the Uniswap Labs so its hard to say whats gonna happen when.
If I were you, I´d not count on the fee switch turning on anytime soon.
See, increase does not equal to proper forward projection of fees and volume. Not all of UNI would be accounted for in the first example, but I will not delve deeper there because nearly everybody agrees its not the optimal way to do things.
In order to do a solid analysis of the buyback programme, you´d have to analyse sell volume and buy volume for the entire day and then add on top of the buy volume the amount which would the money coming from the fee contribute. Saying the contribution would be low is just outright irresponsible without conducting a proper analysis with deeper meaning. Another factors which cannot be accounted for via a simple analysis are the psychological effects of the market participants: there might be a switch of behavior when it comes to the supply of UNI which is totally left out. Such superficial estimates do not even provide a raw estimate of the effect the buyback programme would have.
Your assumptions lack a forward projectment of UNI´s fees and volume
The current reality are somewhere between 2% and 1% of APY. This is already accounting for a huge increase.
The buyback analysis is done really poorly
Your assumptions lack a forward projectment of UNI´s fees and volume
The current reality are somewhere between 2% and 1% of APY. This is already accounting for a huge increase.
The buyback analysis is done really poorly
The buyback I know but I just don't have any better solution, comparing it to UNI's volume is just to show that it's nearly nothing and thus we can't really expect it to have much impact (it could double the price for example).
If you have any better idea about the buyback, then share it.
Your assumptions lack a forward projectment of UNI´s fees and volume; therefore, they are both invalid. However, Im glad we both agree on the fact that the buyback is the way to do things. Its unfortunate that you cant vote on it.
The buyback analysis is done really poorly. Sorry, but I might have missed it: what relevance does the volume analysis have to the price?
I really think distributive fee switch maximalist over estimate the fee switch. This also applies to buyback fee switch maximalist. Let me share this tiny equation I've just made to proove my point:
I really think distributive fee switch maximalist over estimate the fee switch. This also applies to buyback fee switch maximalist. Let me share this tiny equation I've just made to proove my point:
(dailyVolume*feeTierRatio*feeSwitchRatio*numberOfDays)/(expectedUniAffectedByIt*UniPrice)
dailyVolume is the daily volume on uniswap, the goal is to extract the fees we are gonna capture from it, I'll take 1b5 as this is clearly on the upper hand of what fees uniswap have seen, this doesn't make a huge difference anyway as it only scales linearly (you would need a *20 to start see some good numbers anyway)feeTierRatio is the fee tier used by pools, idealy you would not use the volume but the number of fees but I was too lazy to find it as this wasn't obvious to me. I'll then consider that all swaps on uniswap are made at 1% fee tier (the biggest).feeSwitchRatio the part of that fees that are going for fee switch, I'll take 1/6 as this is the only possible value on V2.numberOfDays is how long thoses fees acumulate, I use a plain multiplication and not proper APY as fee switch has no compounding feature, unless you manually go add them back yourself as LP (or other invesment) but this depends on case per case and complicates a lot for not a huge difference.expectedUniAffectedByIt is the number of shares the fee switch is gonna be broken into, I'll take 564m970k520 as this is the current circulating supply of uni (according to coinmarketcap) and you can resonably expect it to be lower (as not all people would likely stake their UNI into a fee switch distributor contract)UniPrice is the price of uni, this is used to normalise this with the volume with have on the left hand of the division (you could remove this to have a share per UNI)Just trying to see how much USD would be yielded over one year per UNI gives use : (1500000000*0.01/6*365)/(564970520) = 1$60, remember that I've already over estimated that likely.
We can also include the current price too: (1500000000*0.01/6*365)/(564970520*27.27) we then see that per $ invested we produced 5.9 cents over 1 year (so ~6%).
Fun thing then, given my estimation, how much should the price of UNI should be for the feeswitch yields to be equaly 40% apy (which was a high but still realistic target for V2), we then replace the price by x and ask to solve for x given a target of 40 cents produced per year: solve (1500000000*0.01/6*365)/(564970520*x)=0.4 for x = 4$.
I'm not saying that the price is gonna jump by 4$, nor that it's gonna lower it self at 4$. It's just that in comparision to the current price, if a distributive fee switch was enabled, the UNI price is very likely not gonna be effected much by it (it might actually crash if most people are here for the money, as if you want only money, a distributive fee switch makes no sense, sell your UNI and provide LP, use charm.fi and get way more money that way).
To compare this to a buyback it's a bit more hard, as this is a slow steady flow of money, I can't just go input that into 1inch and say "well the price impact is xx%" as there is lots of trading on CEX such as binance too. So I'll just compare the number of money that this would generate per day to the trading volume of UNI. This is simply : dailyVolume*feeTierRatio*feeSwitchRatio as we don't try to correct for any length of time nor share between uni holders.
This is 1500000000*0.01/6 = 2m5$ compare this to the ~400m of $ traded in the past 24h, and note that 400m$ is in the very low average compare to the past, if you go back 1 week we were arround 1b$.
Remember that this is a huge overestimation since I don't even need precise value to proove my point, the 2m5 of fee switch money is already about twice the actual fees to LP in the past day (the main part is likely that most volume is made on 0.3% and 0.05%, not 1% like I estimated).
Lets not turn this into personal attacks, but it is true that in order to post relevant comments on such matters one should own the UNI token...otherwise, it is highly suspicious whether the actor´s intent is truly for the cause of the protocol.
The UNI fee switch topic will be dealt with. UNI holders do not worry.
After the Community Call on the 16th of June, the topic of the fee switch being turned on as a, "Buyback and Keep" model was thoroughly discussed with the community being overwhelmingly in favor of implementing such a proposal.
Some key delegates also expressed their approval of such a proposal and the next steps will be discussed on the Penguin´s Party discord.
I´ll keep you in the loop.
Well, see, in your proposal. There is no incentive to hold UNI. Why would you hold UNI?
We need to create incentives for LPs to get involved in the governance and thats why providing a buyback for the sake of a buyback is the perfect way to do it.
As I was informed, you hold no UNI yourself Jorropo so its time to change it and join the governance of the protocol :smiley:
Well, see, in your proposal. There is no incentive to hold UNI. Why would you hold UNI?
We need to create incentives for LPs to get involved in the governance and thats why providing a buyback for the sake of a buyback is the perfect way to do it.
As I was informed, you hold no UNI yourself Jorropo so its time to change it and join the governance of the protocol :smiley:
Im glad we can both agree on the fact that the buyback provides more benefit for both the protocol and the token holders + forces LPs to get involved as well otherwise they´ll lose out on the income.
Win - win!
Why bother selling liquidity away ? If there are people willing to buy the liquidty with UNI that mean they except to make money with this.
Why not just add liquidity it self and use the 35% APY we were seeing on stable / ETH on V2 for example (I don't give APY example for V3 due to ranging you know).
Liquidity holders hold UNI too. Pull the switch all the way
For me a sell of UNI, would aim at finnancing a project of the governance, not selling stuff just to sell stuff.
Except than a buyback, do you have any plans for the money of the buy back ?
UNI sold would create benefit for Uniswap without actually giving anything back to the UNI token holders
Either I'm missing something obvious or what you say is completely wrong. A UNI sold would get back DAI, ETH, ... whatever the sold accepts. Then the UNI holders would use thoses tokens to invest in what they want and the investiment made (I give the example of self rebalancing liquidity on some important pools) would yield profits for the governance (that could be used to buy back uni, distribute, ...). For me a strong alternative to fee switch is trading money now by selling some UNI, with a promise of money later for thoses who stay (which is how initial invesment works in corporations, emit share, get money, invest money, wait, make money, shares worth more).
Yes, but the UNI sold would create benefit for Uniswap without actually giving anything back to the UNI token holders effectively turning them into holding a charity case token. I dont think people would be thrilled about doing that so.
Why would you buy UNI if you know that all the benefits will go to using Uniswap instead? I´d rather than just consume the benefits, why would I pay for them by buying and holding UNI? It has to be a balanced trade off.
Yes, but the UNI sold would create benefit for Uniswap without actually giving anything back to the UNI token holders effectively turning them into holding a charity case token. I dont think people would be thrilled about doing that so.
Why would you buy UNI if you know that all the benefits will go to using Uniswap instead? I´d rather than just consume the benefits, why would I pay for them by buying and holding UNI? It has to be a balanced trade off.
And you do support a buyback programme, you just dont know it yet :) Deep down, you support it all the way cause you know its the proper way to do things.
It's not an argument, I can not hold any UNI and still think I have better options than a buyback, if you think buyback or distributing fee switch is a good idea just propose let a vote happen and we will see the results.
I heard it with my own ears from you in the Jun UNI community call (as well as saw it in the call chat), that you don't hold any UNI and for you it is way too expensive. You even managed to co-host that meeting and it was blatantly one sided because of this. It is obvious you are trying to thwart/bypass the main governance mechanism which resides in the value in the UNI GOVERNANCE token. I don't care if you are the largest LP in the world, if UNISWAP is to be stay the #1 decentralized exchange its governance token must not loose value the way you pretend by wiping your bottom with it as if it were paper money.
Using a sell order (not a V3 based one as they are biddirectional until completion, a custom tiny fixed ratio swapping contract would be better I guess), this couldn’t make the price fall by itself, this could only let it not raise
Using a sell order (not a V3 based one as they are biddirectional until completion, a custom tiny fixed ratio swapping contract would be better I guess), this couldn’t make the price fall by itself, this could only let it not raise
Your points are not valid as the treasury value is derived from the UNI price token.....Lower price = more UNI needs to be sold from the treasury to fund the governance. Higher price = less UNI has to be sold to achieve the same means. You cant simply infer that the value attached to the treasury comes from thin air. If people decide they do not want to subsidize a charity like token, then there is no governance to do.
I never said that flipping the fee switch in the form of a buyback would be bad. In fact, I do think its the best way to go about it and I am glad that you support flipping the fee switch on for the buyback.
So, lets do it! :)
This will likely not create much buy pressure (if any at all).
But this will make the governance more rich.
This will likely not create much buy pressure (if any at all).
But this will make the governance more rich.
Thoses are just 2 different targets. I don't think a buyback for the sake of a buyback achieve much of anything that the providing of LP doesn't (from point of view of LP, from point of view of your wallet I can understand that a buyback is tempting), for me this sounds a lot like the charity coin you described earlier. Providing liquidity makes :
Look, if you can demonstrate how it would create more buy pressure for the UNI token compared to a direct buyback, then Im all ears.
The problem with your plan is that you create sell pressure with a promise of turning it into buy pressure in the future.
The buyback programme in turn creates buy pressure with a promise of turning it into sell pressure in the future.
The problem with your plan is that you create sell pressure with a promise of turning it into buy pressure in the future.
The buyback programme in turn creates buy pressure with a promise of turning it into sell pressure in the future.
The difference is that with the buyback programme, the gain realized is much bigger. You have to account for the fact that the UNI token has 2 % inflation after 4 years. So basically, the ammunition in the treasury is infinite. Its better to utilize buy pressure now, sell pressure later than vice versa.
Yes let’s turn it on and fund some things. Optimism coming but why not v3 on Polygon, or zkSync too? Plus, as I’ve written in another proposal, use fees to grow and encourage liquidity by reimbursement of pool creation. So much we can do, but first need to monetize.
Your points are not valid as the treasury value is derived from the UNI price token
It's not actually my point, just a tiny thing I think support it.
My actual point is that if whatever the governance does with the UNI generates more buy pressure from people that wanna be a part of it then the sell pressure of selling UNI, this will raise the price too and doesn't require fee switch.
Your points are not valid as the treasury value is derived from the UNI price token
It's not actually my point, just a tiny thing I think support it.
My actual point is that if whatever the governance does with the UNI generates more buy pressure from people that wanna be a part of it then the sell pressure of selling UNI, this will raise the price too and doesn't require fee switch.
I never said that flipping the fee switch in the form of a buyback would be bad. In fact, I do think its the best way to go about it and I am glad that you support flipping the fee switch on for the buyback.
I don't, I just find this way less bad than distributing fee switche to uni holders. (if you are for a buyback, pls ignore all the part where I try to explain why I think distributing fee switch is just a bad version of a buy back :D )
I'm for a slow compounding of the fee switch (activating fee switch and adding liquidity back into uniswap with it).
To specifically go after point 3. After what I learned from recent 88mph governance for their upcoming V3; I believe a buyback and distribute, to stakers in UNI, method would be best.
Pros:
Creates an interest bearing token that could still be tied to governance (xUNI).
Auto-Compounding rewards stakers who remain holders and not speculators.
Cons:
To specifically go after point 3. After what I learned from recent 88mph governance for their upcoming V3; I believe a buyback and distribute, to stakers in UNI, method would be best.
Pros:
Creates an interest bearing token that could still be tied to governance (xUNI).
Auto-Compounding rewards stakers who remain holders and not speculators.
Cons:
Everyone will want to be staked and could lead to the overall pool being diluted. Split in liquidity between UNI and xUNI.
People could have their UNI locked up in different DeFi protocols and have to eat the gas to migrate over to the staking pool.
While I do think earning DAI from the risk of a potential bear market has merit, having a native token not tied to other protocols also decreases risk in my opinion.
From what I understand this argument relly on the fact that if the governance sells UNI the price must drop.
Proposing sell pressure proposals all the time is not sustainable for the growth of Uniswap´s treasury and presents a strong threat to the UNI token project as a whole. Afterall, who wants to hold a token which basically redistributes its value to other people??
From what I understand this argument relly on the fact that if the governance sells UNI the price must drop.
Proposing sell pressure proposals all the time is not sustainable for the growth of Uniswap´s treasury and presents a strong threat to the UNI token project as a whole. Afterall, who wants to hold a token which basically redistributes its value to other people??
But there are multiple ways to go about selling lots of UNI :
So for me a project like an automated self rebalancing V3 position (like does charm.fi) where the profit are shared to UNI holders funded by selling UNI would rise the price more than it cost to do (because this is dope AF and this would sell the idea of high efficiency passive income on V3) and would force a bunch of people to buy UNI to take a part of the profits. The governance compete with almost no one and can just say "we are selling 25m UNI at 28$" while people that will want to jump on board will have to compete with each others to get a part of the cake.
Don't forget than governance could invest in other things too. I know some people were talking about investing in other new starting DeFi, then the governance would play an invesment funds like role.
The fee switch is a 0 sum action, before you have 600$ of fee going to LPs, now you have 500$ for LP and 100$ for UNI holders, a UNI buyback, ...
This achieve nothing, you just moved a bunch of numbers arround, it's only changing the wealth distribution but doesn't create any new wealth.
However if the governance use that money to provide it uniswap, it provides less price impact, will attract more transaction fees (from dex agregator such as paraswap, 1inch, 0x, ...). And thus the situation of the uniswap ecosystem is better in this state as the sum of LPs, UNI holders and governance is higher.
There are ways to generate more money, why do you want to bother with something that bother LPs and just moves stuff arround ?
Basically as long as when the governance sells UNI it uses them to create more value than the value of the UNI it sold (which is kinda like the whole point of invesment) the price of UNI can't drop just by a sell of UNI because their will be more buyers willing to buy thoses UNI. If there aren't thoses buyers that mean that the governance either messed up and is paying more money than something is worth or it isn't following profit as a target (like funding charity), at this point there is no reason to talk about making money, it's just not a goal anymore.
Corporation (which you seems to target with dividend like rewards for UNI holders) invest all the time and they are mostly going fine. I don't see why the governance couldn't attempt this.
You don't need to give money to UNI holders to create a buy pressure, you can sell them the idea of money but later.
Now, if we propose sell pressure proposals all the time with no buy pressure proposals, what is the incentive for anybody to be a willing UNI token buyer?
Because the uniswap governance would be capable to create more value with your money that you exchanged against UNI than you could doing yourself. Example with self rebalancing strategy, the bigger you are the more worthwhile this become (because gas fee become a smaller part of the total and you can rebalance more often)
The value of this treasury is determined by the price of the UNI token. This means that if there are willing UNI token buyers, the value of the treasury grows.
Distributing fees to LP is a bad way to go about it, if a higher UNI price is a target to you just do a UNI buy back with the fee switch money. Because there are 3 options with a fee switch distribution :
Buy backs are way clearer and achieve the same goal on the price. It is almost impossible to under estimate the value of a buyback, because well it is there and it is happenning, this can still lead to speculative reactions but they are all good for the price, everyone would consider twice selling his coins when a buyback is announced, because you know there is a huge buy pressure on the price. (actually they could sell instant if the buyback is a fixed size and instant they could then try to be the first to arb it before others, but if it were to come from fee switch this would be a slow stream of buyback, not anything major to arb) For me there is way less chance for the buyback to be undervalued and the governance is yielding less results out of it, plus this is giving more power to the governance.
If the whole plan of a high UNI price is so the governance will be able to make money selling his own UNI in the future, why not keep the UNI in the governance and just use the fee switch to fund the thing the governance wants to fund in the first place ? It seems to me you have a huge complicated step of fee switch into UNI holders, the creating a buy pressure on the UNI price, then selling UNI in tresury to get funds. That can just be simplified by activate fee switch, use fee switch money to fund governance's expenses. This has way less unkown, is way simpler to do and require no middle man seeking to make money.
with the timelocked code
First forks are appearing, they aren't serious yet (only about ~15k$ of TVL) but we don't know how the situation will evolve, this is something really hard to enforce on the blockchain, the OFAC isn't capable to stop IRA from using ETH as an invesment medium, I have very high doubt about wether or not they can even force shutdown a concurrent that would steal V3's code.
The second argument is also not valid because the LPs which suffer the loss of the income can simply offset it by buying UNI tokens and collect the fees to cover for the loss arising from the fee switch.
Personaly, that not a problem for me, I'm ok with LPs having less money, actually I'm for a certain type of fee switch. My problem is that your option it's 0 summed.
I think we should enable fee switch, all money would then be placed into providing liquidity on uniswap.
This acknolege the other users of uniswap no one here seems to talk about, the swappers. What swappers like : high output for their swaps. This mean low swap fees and low price impact, the first one I don't think we need to change it, the 0.05% is already one of the cheapest way on the market. But the TVL we can just provide liquidity, own by a self rebalancing contract (for V2 pretty easy, litteraly receive LP tokens, and do nothing, there is no balancing and they compound by themself, V3 need a rebalancing stuff, there is also the question of does the V2 liquidity should be moved to V3 ? (I think yes, without a doubt personnaly))
This would draw more liquidity for everyone, as a transaction from an aggregator that would go on balancer would now go on uniswap instead, but this new transaction yielded by this better price impact would be shared accross all LPs. This will compound (up to a certain market saturation, we don't know how close is uniswap to it, maybe this can push so far that uniswap is capable to propose better prices than CEX, this might result in people who don't care about decentralisation but just want to trade to use uniswap then) and have really good results in the future. It's something we can setup now, not for us, but for the governance in 1 year, 2, or even more. As we all seems to agree on it's hard to get lots of money instantly, if the governance were to sell about 25m$ of UNI instantly, spliting accross multiple DeFi this would result in 11% of price impact. But if we setup a growing supply of money, in the future when needed this question will not be, just take it from the vault.
Yes, I wanted to expand on your argument :)
Turning the switch on is actually a complicated process + it is irrational to turn on right now since the volumes will increase dramatically when V3 hits. The fee switch is a mechanism which should be turned on when Uniswap is in a mature position, we are just not there yet.
Yes for sure ! thanks
But keep in mind here we are talking about the v2 (and only v2) fee switch after v3 goes live as a means to :
Yes for sure ! thanks
But keep in mind here we are talking about the v2 (and only v2) fee switch after v3 goes live as a means to :
I keep seeing people saying UNI has no utility beyond governance and I think it's time to show how that narrative is false and that the Uni governance can come together and vote to turn on the v2 fee switch. Or at least just have a good debate on the matter. I guess it will make us, uni holders, feel more alive regardless of the outcome !
@DCinvestor is a new delegate who, contrary to the others, seems interested in actually getting proposals out the door. maybe @rleshner would be interested as well...
I think we might want to contact big delegates but go the autonomous proposals route autonomous proposals allow us to submit a proposal w/o the treshold. I think the penguin party built the tool by forking compound gov code. but I can't find the UI right now...
@DCinvestor is a new delegate who, contrary to the others, seems interested in actually getting proposals out the door. maybe @rleshner would be interested as well...
I think we might want to contact big delegates but go the autonomous proposals route autonomous proposals allow us to submit a proposal w/o the treshold. I think the penguin party built the tool by forking compound gov code. but I can't find the UI right now...
I think voting for the v2 fee switch (after v3 goes live on L1 ethereum) would also send a strong signal that UNI governance can vote a fee switch and that there are reasons to hold UNI besides governance.
edit : found the interface https://unigov.eth.link/#/ap (except there's no way to launch a new proposal... you probably have to do it through etherscan or something...)
Its time to get serious.....
I want to talk about the unfairness of the governance and the sustainability of the UNI Treasury value if the fee switch does not get turned on.
Its time to get serious.....
I want to talk about the unfairness of the governance and the sustainability of the UNI Treasury value if the fee switch does not get turned on.
Now, I dont know about you, but when I bought UNI token, I was buying it with the intent of deploying my capital effectively to propel the growth of Uniswap. I did not buy the token with the intent to become a piggybank for somebody else to siphon off all my value to 0. Proposing sell pressure proposals all the time is not sustainable for the growth of Uniswap´s treasury and presents a strong threat to the UNI token project as a whole. Afterall, who wants to hold a token which basically redistributes its value to other people?? Like the point of the token was it to be a governance token, but this is slowly becoming a charity type of a token where the only vote is to decide to whom we should give out money and how much....
Let me explain:
UNI has a treasury which holds a specific amount of UNI tokens. The value of this treasury is determined by the price of the UNI token. This means that if there are willing UNI token buyers, the value of the treasury grows. On the other hand, if there are willing sellers of the UNI token, the value of the treasury falls. Now, if we propose sell pressure proposals all the time with no buy pressure proposals, what is the incentive for anybody to be a willing UNI token buyer? Proposing dilution is clearly not a sustainable path for the token to be taking as it will diminish the buying power of the UNI treasury; therefore, there will be a limit on what it can fund.
Now, I think it would be much more beneficial for the protocol if we TURN ON the fee switch and PAY the token holders. This way we create a buy pressure proposal for the token which actively creates value in the form of a higher UNI price = more valuable UNI in the treasury = more things which we can fund in order to foster growth for Uniswap.
The main argument against the fee switch up until now was the fact the competitors would have an advantage by providing better LP fees and the fact Uniswap LPs would suffer. Now, I strongly think the situation has developed in such a way that these arguments do not hold true anymore. Uniswap V3 assured the dominance among DEXes with the timelocked code which cannot be copied over. This means that the competitors will not be able to simply adjust incentives to siphon off the liquidity of off Uniswap.
The second argument is also not valid because the LPs which suffer the loss of the income can simply offset it by buying UNI tokens and collect the fees to cover for the loss arising from the fee switch. Actually, this would be incredibly good for Uniswap as there would be a flood of willing buyers which would transfer their wealth into the treasury meaning Uniswap´s influence to propose sell proposals would increase tremendously in a sustainable fashion. Therefore, I see this as a net positive for the protocol
All in all, I do think the time to turn on the fee switch has come. With arbitrum & optimism deployment around the corner, Uniswap is in the best position to further its position as the market leader among the DEXes & enhance the value of its treasury by a good margin.
First of all, I'm super happy that a delegate with a sizeable amount of delegated votes comes here and actually discusses the proposals with us smaller holders/non delegates. It's not something that happens a lot. Big delegates have been mostly absent and as a result, governance has been pretty much dead. I think this is changing, and I'm really happy. We are hearing that community managers are being hired. As a sidenote I think we need more active moderation here. More precisely we need to delete threads about future airdrops as they are really counterproductive and encourage scammers preying on gullible users. We should have a big banner saying there are no more airdrops planned.
Back on topic : I think we agree that our goal should be to have our LPs transition to v3, just like they transitioned to v2 about a year ago. V2 is the new V1 if you will. The transition should/will happen ; it's a matter of time essentially, insofar as V3 is a superior product and that it makes V2 (along with protocols who copy-pasted the code) obsolete.
Good point. I think after V3 is a good idea after we get tons more LP providers.
Tbh my position is that it's really not productive to be thinking about turning on the fee switch now. We have so much more to do than just focusing on the easy gains for now. We have to solidify our position as leading DEX. We have to ensure a nice migration to v3 and L2. We have to grow the ecosystem and dev community around v3.
We should be discussing a new liquidity mining campaign to make up for the risks of moving liquidity to L2 (where smart contract risks are next-level compounded).
Tbh my position is that it's really not productive to be thinking about turning on the fee switch now. We have so much more to do than just focusing on the easy gains for now. We have to solidify our position as leading DEX. We have to ensure a nice migration to v3 and L2. We have to grow the ecosystem and dev community around v3.
We should be discussing a new liquidity mining campaign to make up for the risks of moving liquidity to L2 (where smart contract risks are next-level compounded).
I really think the main difference between Sushi and Uni is the short-term "muh gains & rewards now" mentality vs. the long-term play and 4d chess Uniswap is playing.
Uni v3 is probably going to reinvent DEX. We want LPs to migrate massively, we want to be as welcoming as possible to both LPs and swappers. We want new types of professional market markers to take advantage of concentrated liquidity so that swappers (retail) gets better prices (less slippage/price impact). It's not the time to be feeding on LP profit margins.
When volume is up 10x, that will be the time. Until then, it's in our interest to focus on growth, not on rent-seeking.
Also, we already have a HUGE treasury. What's the point to grow it with fees ?
I wouldn't be against that.
The problem is that we have no major delegates discussing these matters with us here... :-/
Look, if you can demonstrate how it would create more buy pressure for the UNI token compared to a direct buyback, then Im all ears.
The problem with your plan is that you create sell pressure with a promise of turning it into buy pressure in the future.
The buyback programme in turn creates buy pressure with a promise of turning it into sell pressure in the future.
The problem with your plan is that you create sell pressure with a promise of turning it into buy pressure in the future.
The buyback programme in turn creates buy pressure with a promise of turning it into sell pressure in the future.
The difference is that with the buyback programme, the gain realized is much bigger. You have to account for the fact that the UNI token has 2 % inflation after 4 years. So basically, the ammunition in the treasury is infinite. Its better to utilize buy pressure now, sell pressure later than vice versa.
Yes let’s turn it on and fund some things. Optimism coming but why not v3 on Polygon, or zkSync too? Plus, as I’ve written in another proposal, use fees to grow and encourage liquidity by reimbursement of pool creation. So much we can do, but first need to monetize.
Your points are not valid as the treasury value is derived from the UNI price token
It's not actually my point, just a tiny thing I think support it.
My actual point is that if whatever the governance does with the UNI generates more buy pressure from people that wanna be a part of it then the sell pressure of selling UNI, this will raise the price too and doesn't require fee switch.
Your points are not valid as the treasury value is derived from the UNI price token
It's not actually my point, just a tiny thing I think support it.
My actual point is that if whatever the governance does with the UNI generates more buy pressure from people that wanna be a part of it then the sell pressure of selling UNI, this will raise the price too and doesn't require fee switch.
I never said that flipping the fee switch in the form of a buyback would be bad. In fact, I do think its the best way to go about it and I am glad that you support flipping the fee switch on for the buyback.
I don't, I just find this way less bad than distributing fee switche to uni holders. (if you are for a buyback, pls ignore all the part where I try to explain why I think distributing fee switch is just a bad version of a buy back :D )
I'm for a slow compounding of the fee switch (activating fee switch and adding liquidity back into uniswap with it).
To specifically go after point 3. After what I learned from recent 88mph governance for their upcoming V3; I believe a buyback and distribute, to stakers in UNI, method would be best.
Pros:
Creates an interest bearing token that could still be tied to governance (xUNI).
Auto-Compounding rewards stakers who remain holders and not speculators.
Cons:
To specifically go after point 3. After what I learned from recent 88mph governance for their upcoming V3; I believe a buyback and distribute, to stakers in UNI, method would be best.
Pros:
Creates an interest bearing token that could still be tied to governance (xUNI).
Auto-Compounding rewards stakers who remain holders and not speculators.
Cons:
Everyone will want to be staked and could lead to the overall pool being diluted. Split in liquidity between UNI and xUNI.
People could have their UNI locked up in different DeFi protocols and have to eat the gas to migrate over to the staking pool.
While I do think earning DAI from the risk of a potential bear market has merit, having a native token not tied to other protocols also decreases risk in my opinion.
From what I understand this argument relly on the fact that if the governance sells UNI the price must drop.
Proposing sell pressure proposals all the time is not sustainable for the growth of Uniswap´s treasury and presents a strong threat to the UNI token project as a whole. Afterall, who wants to hold a token which basically redistributes its value to other people??
From what I understand this argument relly on the fact that if the governance sells UNI the price must drop.
Proposing sell pressure proposals all the time is not sustainable for the growth of Uniswap´s treasury and presents a strong threat to the UNI token project as a whole. Afterall, who wants to hold a token which basically redistributes its value to other people??
But there are multiple ways to go about selling lots of UNI :
So for me a project like an automated self rebalancing V3 position (like does charm.fi) where the profit are shared to UNI holders funded by selling UNI would rise the price more than it cost to do (because this is dope AF and this would sell the idea of high efficiency passive income on V3) and would force a bunch of people to buy UNI to take a part of the profits. The governance compete with almost no one and can just say "we are selling 25m UNI at 28$" while people that will want to jump on board will have to compete with each others to get a part of the cake.
Don't forget than governance could invest in other things too. I know some people were talking about investing in other new starting DeFi, then the governance would play an invesment funds like role.
The fee switch is a 0 sum action, before you have 600$ of fee going to LPs, now you have 500$ for LP and 100$ for UNI holders, a UNI buyback, ...
This achieve nothing, you just moved a bunch of numbers arround, it's only changing the wealth distribution but doesn't create any new wealth.
However if the governance use that money to provide it uniswap, it provides less price impact, will attract more transaction fees (from dex agregator such as paraswap, 1inch, 0x, ...). And thus the situation of the uniswap ecosystem is better in this state as the sum of LPs, UNI holders and governance is higher.
There are ways to generate more money, why do you want to bother with something that bother LPs and just moves stuff arround ?
Basically as long as when the governance sells UNI it uses them to create more value than the value of the UNI it sold (which is kinda like the whole point of invesment) the price of UNI can't drop just by a sell of UNI because their will be more buyers willing to buy thoses UNI. If there aren't thoses buyers that mean that the governance either messed up and is paying more money than something is worth or it isn't following profit as a target (like funding charity), at this point there is no reason to talk about making money, it's just not a goal anymore.
Corporation (which you seems to target with dividend like rewards for UNI holders) invest all the time and they are mostly going fine. I don't see why the governance couldn't attempt this.
You don't need to give money to UNI holders to create a buy pressure, you can sell them the idea of money but later.
Now, if we propose sell pressure proposals all the time with no buy pressure proposals, what is the incentive for anybody to be a willing UNI token buyer?
Because the uniswap governance would be capable to create more value with your money that you exchanged against UNI than you could doing yourself. Example with self rebalancing strategy, the bigger you are the more worthwhile this become (because gas fee become a smaller part of the total and you can rebalance more often)
The value of this treasury is determined by the price of the UNI token. This means that if there are willing UNI token buyers, the value of the treasury grows.
Distributing fees to LP is a bad way to go about it, if a higher UNI price is a target to you just do a UNI buy back with the fee switch money. Because there are 3 options with a fee switch distribution :
Buy backs are way clearer and achieve the same goal on the price. It is almost impossible to under estimate the value of a buyback, because well it is there and it is happenning, this can still lead to speculative reactions but they are all good for the price, everyone would consider twice selling his coins when a buyback is announced, because you know there is a huge buy pressure on the price. (actually they could sell instant if the buyback is a fixed size and instant they could then try to be the first to arb it before others, but if it were to come from fee switch this would be a slow stream of buyback, not anything major to arb) For me there is way less chance for the buyback to be undervalued and the governance is yielding less results out of it, plus this is giving more power to the governance.
If the whole plan of a high UNI price is so the governance will be able to make money selling his own UNI in the future, why not keep the UNI in the governance and just use the fee switch to fund the thing the governance wants to fund in the first place ? It seems to me you have a huge complicated step of fee switch into UNI holders, the creating a buy pressure on the UNI price, then selling UNI in tresury to get funds. That can just be simplified by activate fee switch, use fee switch money to fund governance's expenses. This has way less unkown, is way simpler to do and require no middle man seeking to make money.
with the timelocked code
First forks are appearing, they aren't serious yet (only about ~15k$ of TVL) but we don't know how the situation will evolve, this is something really hard to enforce on the blockchain, the OFAC isn't capable to stop IRA from using ETH as an invesment medium, I have very high doubt about wether or not they can even force shutdown a concurrent that would steal V3's code.
The second argument is also not valid because the LPs which suffer the loss of the income can simply offset it by buying UNI tokens and collect the fees to cover for the loss arising from the fee switch.
Personaly, that not a problem for me, I'm ok with LPs having less money, actually I'm for a certain type of fee switch. My problem is that your option it's 0 summed.
I think we should enable fee switch, all money would then be placed into providing liquidity on uniswap.
This acknolege the other users of uniswap no one here seems to talk about, the swappers. What swappers like : high output for their swaps. This mean low swap fees and low price impact, the first one I don't think we need to change it, the 0.05% is already one of the cheapest way on the market. But the TVL we can just provide liquidity, own by a self rebalancing contract (for V2 pretty easy, litteraly receive LP tokens, and do nothing, there is no balancing and they compound by themself, V3 need a rebalancing stuff, there is also the question of does the V2 liquidity should be moved to V3 ? (I think yes, without a doubt personnaly))
This would draw more liquidity for everyone, as a transaction from an aggregator that would go on balancer would now go on uniswap instead, but this new transaction yielded by this better price impact would be shared accross all LPs. This will compound (up to a certain market saturation, we don't know how close is uniswap to it, maybe this can push so far that uniswap is capable to propose better prices than CEX, this might result in people who don't care about decentralisation but just want to trade to use uniswap then) and have really good results in the future. It's something we can setup now, not for us, but for the governance in 1 year, 2, or even more. As we all seems to agree on it's hard to get lots of money instantly, if the governance were to sell about 25m$ of UNI instantly, spliting accross multiple DeFi this would result in 11% of price impact. But if we setup a growing supply of money, in the future when needed this question will not be, just take it from the vault.
Yes, I wanted to expand on your argument :)
Turning the switch on is actually a complicated process + it is irrational to turn on right now since the volumes will increase dramatically when V3 hits. The fee switch is a mechanism which should be turned on when Uniswap is in a mature position, we are just not there yet.
Yes for sure ! thanks
But keep in mind here we are talking about the v2 (and only v2) fee switch after v3 goes live as a means to :
Yes for sure ! thanks
But keep in mind here we are talking about the v2 (and only v2) fee switch after v3 goes live as a means to :
I keep seeing people saying UNI has no utility beyond governance and I think it's time to show how that narrative is false and that the Uni governance can come together and vote to turn on the v2 fee switch. Or at least just have a good debate on the matter. I guess it will make us, uni holders, feel more alive regardless of the outcome !
@DCinvestor is a new delegate who, contrary to the others, seems interested in actually getting proposals out the door. maybe @rleshner would be interested as well...
I think we might want to contact big delegates but go the autonomous proposals route autonomous proposals allow us to submit a proposal w/o the treshold. I think the penguin party built the tool by forking compound gov code. but I can't find the UI right now...
@DCinvestor is a new delegate who, contrary to the others, seems interested in actually getting proposals out the door. maybe @rleshner would be interested as well...
I think we might want to contact big delegates but go the autonomous proposals route autonomous proposals allow us to submit a proposal w/o the treshold. I think the penguin party built the tool by forking compound gov code. but I can't find the UI right now...
I think voting for the v2 fee switch (after v3 goes live on L1 ethereum) would also send a strong signal that UNI governance can vote a fee switch and that there are reasons to hold UNI besides governance.
edit : found the interface https://unigov.eth.link/#/ap (except there's no way to launch a new proposal... you probably have to do it through etherscan or something...)
Its time to get serious.....
I want to talk about the unfairness of the governance and the sustainability of the UNI Treasury value if the fee switch does not get turned on.
Its time to get serious.....
I want to talk about the unfairness of the governance and the sustainability of the UNI Treasury value if the fee switch does not get turned on.
Now, I dont know about you, but when I bought UNI token, I was buying it with the intent of deploying my capital effectively to propel the growth of Uniswap. I did not buy the token with the intent to become a piggybank for somebody else to siphon off all my value to 0. Proposing sell pressure proposals all the time is not sustainable for the growth of Uniswap´s treasury and presents a strong threat to the UNI token project as a whole. Afterall, who wants to hold a token which basically redistributes its value to other people?? Like the point of the token was it to be a governance token, but this is slowly becoming a charity type of a token where the only vote is to decide to whom we should give out money and how much....
Let me explain:
UNI has a treasury which holds a specific amount of UNI tokens. The value of this treasury is determined by the price of the UNI token. This means that if there are willing UNI token buyers, the value of the treasury grows. On the other hand, if there are willing sellers of the UNI token, the value of the treasury falls. Now, if we propose sell pressure proposals all the time with no buy pressure proposals, what is the incentive for anybody to be a willing UNI token buyer? Proposing dilution is clearly not a sustainable path for the token to be taking as it will diminish the buying power of the UNI treasury; therefore, there will be a limit on what it can fund.
Now, I think it would be much more beneficial for the protocol if we TURN ON the fee switch and PAY the token holders. This way we create a buy pressure proposal for the token which actively creates value in the form of a higher UNI price = more valuable UNI in the treasury = more things which we can fund in order to foster growth for Uniswap.
The main argument against the fee switch up until now was the fact the competitors would have an advantage by providing better LP fees and the fact Uniswap LPs would suffer. Now, I strongly think the situation has developed in such a way that these arguments do not hold true anymore. Uniswap V3 assured the dominance among DEXes with the timelocked code which cannot be copied over. This means that the competitors will not be able to simply adjust incentives to siphon off the liquidity of off Uniswap.
The second argument is also not valid because the LPs which suffer the loss of the income can simply offset it by buying UNI tokens and collect the fees to cover for the loss arising from the fee switch. Actually, this would be incredibly good for Uniswap as there would be a flood of willing buyers which would transfer their wealth into the treasury meaning Uniswap´s influence to propose sell proposals would increase tremendously in a sustainable fashion. Therefore, I see this as a net positive for the protocol
All in all, I do think the time to turn on the fee switch has come. With arbitrum & optimism deployment around the corner, Uniswap is in the best position to further its position as the market leader among the DEXes & enhance the value of its treasury by a good margin.
First of all, I'm super happy that a delegate with a sizeable amount of delegated votes comes here and actually discusses the proposals with us smaller holders/non delegates. It's not something that happens a lot. Big delegates have been mostly absent and as a result, governance has been pretty much dead. I think this is changing, and I'm really happy. We are hearing that community managers are being hired. As a sidenote I think we need more active moderation here. More precisely we need to delete threads about future airdrops as they are really counterproductive and encourage scammers preying on gullible users. We should have a big banner saying there are no more airdrops planned.
Back on topic : I think we agree that our goal should be to have our LPs transition to v3, just like they transitioned to v2 about a year ago. V2 is the new V1 if you will. The transition should/will happen ; it's a matter of time essentially, insofar as V3 is a superior product and that it makes V2 (along with protocols who copy-pasted the code) obsolete.
Good point. I think after V3 is a good idea after we get tons more LP providers.
Tbh my position is that it's really not productive to be thinking about turning on the fee switch now. We have so much more to do than just focusing on the easy gains for now. We have to solidify our position as leading DEX. We have to ensure a nice migration to v3 and L2. We have to grow the ecosystem and dev community around v3.
We should be discussing a new liquidity mining campaign to make up for the risks of moving liquidity to L2 (where smart contract risks are next-level compounded).
Tbh my position is that it's really not productive to be thinking about turning on the fee switch now. We have so much more to do than just focusing on the easy gains for now. We have to solidify our position as leading DEX. We have to ensure a nice migration to v3 and L2. We have to grow the ecosystem and dev community around v3.
We should be discussing a new liquidity mining campaign to make up for the risks of moving liquidity to L2 (where smart contract risks are next-level compounded).
I really think the main difference between Sushi and Uni is the short-term "muh gains & rewards now" mentality vs. the long-term play and 4d chess Uniswap is playing.
Uni v3 is probably going to reinvent DEX. We want LPs to migrate massively, we want to be as welcoming as possible to both LPs and swappers. We want new types of professional market markers to take advantage of concentrated liquidity so that swappers (retail) gets better prices (less slippage/price impact). It's not the time to be feeding on LP profit margins.
When volume is up 10x, that will be the time. Until then, it's in our interest to focus on growth, not on rent-seeking.
Also, we already have a HUGE treasury. What's the point to grow it with fees ?
I wouldn't be against that.
The problem is that we have no major delegates discussing these matters with us here... :-/
First of all, I'm super happy that a delegate with a sizeable amount of delegated votes comes here and actually discusses the proposals with us smaller holders/non delegates. It's not something that happens a lot. Big delegates have been mostly absent and as a result, governance has been pretty much dead. I think this is changing, and I'm really happy. We are hearing that community managers are being hired. As a sidenote I think we need more active moderation here. More precisely we need to delete threads about future airdrops as they are really counterproductive and encourage scammers preying on gullible users. We should have a big banner saying there are no more airdrops planned.
Back on topic : I think we agree that our goal should be to have our LPs transition to v3, just like they transitioned to v2 about a year ago. V2 is the new V1 if you will. The transition should/will happen ; it's a matter of time essentially, insofar as V3 is a superior product and that it makes V2 (along with protocols who copy-pasted the code) obsolete.
So turning on the fee switch maybe a couple of weeks (the timeframe is what should be debated here in my view) after V3 goes live on L1 (Ethereum mainnet) could help us give a wake up call to LPs who still haven't transitioned. But mostly -- at least in my view -- it would be a strong symbolic action for governance to take at this point. Because it will also serve as a huge reminder that UNI holders can come together and take a collective decision on a fee switch proposal. In this way, the DeFi community can be reminded that UNI isn't just a pure governance token : one of its main purposes is to act as a stake in future protocol fees.
V2 fee switch also is a very nice compromise/middleground between no fee-switch at all and v3 fee switch.
In any event I don't see the turning on of the v2 fee switch as having any bad consequences. The reason for that is that v2 will be a "legacy" product very soon and the volume should naturally drop sharply once v3 goes live (same as when v2 was launched, really).
There are many advantages to a v2 fee switch turn-on proposal but one of them is that the code is extremely easy. As far as I know, it's a one-liner.
I think one of the next step to envision is to come up with a full proposal and maybe post it on snapshot as an informal temperature check.
But first we really need to debate this idea a bit more (especially the timeframe) and find additional delegates who would be willing to support this proposal.
Hopefully though this week brings optimism + v3, which then clears any hurdles fir fee switch.
I think that Uniswap team could remember, in a full trasparent way with a tweet or better a blog post, that sice March 15 it's possible to vote to activate fees switch.
My position is that we need to wait until volume really picks up with L2.
Until then and we need LPs to feel at ease during the migration... and w/o incentives (at the moment, it does look like there won't be any new incentives campaign... it's so quiet on this forum compared to what it was !), the best incentives remains 100% LP fees.
My position is that we need to wait until volume really picks up with L2.
Until then and we need LPs to feel at ease during the migration... and w/o incentives (at the moment, it does look like there won't be any new incentives campaign... it's so quiet on this forum compared to what it was !), the best incentives remains 100% LP fees.
v3 also gives us custom fee switch on a per-pool basis, so when volumes goes through the roof with v3 on L2, we can begin with select pools :slight_smile:
no need to rush the fee switch. all the impatient UNI holders should really sell if they think the switch needs to be turned on now... we need v3 to mature quite a bit before it makes sense ! good things come to those who wait... it makes perfect sense in this case
All the LPS hold UNI in huge amounts. Theres no legit reasons not to pull this switch
No way. They can’t have anything to do with fee switch or mentioning it. My guess is v3, then there will be a whales proposal for fee switch.
We pulling this switch today or what
I hear your points, but im not technically inclined enough to get the information you are looking for. More so I wanted to begin the discussion since such a critical opportunity is coming up and there is little to no discussion on the subject.
As for non-whale lp's, if bottom line was their biggest concern they would be lp'ing on sushiswap already because you can earn sushi on top of transaction fees. So a further exodus is imo overblown.
I hear your points, but im not technically inclined enough to get the information you are looking for. More so I wanted to begin the discussion since such a critical opportunity is coming up and there is little to no discussion on the subject.
As for non-whale lp's, if bottom line was their biggest concern they would be lp'ing on sushiswap already because you can earn sushi on top of transaction fees. So a further exodus is imo overblown.
However I would be curious for someone to analyze the overlap between all uniswap lp's and uni holders. I would wager its greater than 70% when compared to overall liquidity provided by the overlap.
5bps reduction will not have a material impact on people
For the sake of credibility, you should not misrepresent it as "just 5bps" or ".005%". The difference for an LP is 16.6% of income, it is not immaterial.
5bps reduction will not have a material impact on people
For the sake of credibility, you should not misrepresent it as "just 5bps" or ".005%". The difference for an LP is 16.6% of income, it is not immaterial.
large lp’s are likely to also be large uniswap stake holders and will also benefit
What about less-than-large LPs? What about those that don't hold UNI or hold few relative to their LP shares?
Why don't you collect address data and present a thorough analysis for everyone, so community can compare guaranteed losses of liquidity providers and potential gains in case they happen to hold UNI? I find the current proposal quite heavy on opinion and light on details.
Let’s do it! It’s a no brainer!
updates ? It seems a unreal situation....
Still no whales discussing this monumental issue nor overwhelming/active discussion. It’s just odd at this point.
To be, turning on the fee switch is an easy no brainer decision with much much more benefit than risks. People thought, without the liquidity reward, LPs would leave, but as it turned out, they did come back. Fee earned is only one factor in any LP's mind. security, volume and leading tech innovation (V3, L2 etc.) will all be reasons for LPs to stay with Uniswap even after 16.6% loss of income. Also, we will never know if LP will leave or not if we don't turn on the fee switch to try it out. So let's just turn it on to see what happens. If it really leads to significant LP leaving, which I think won't happen after all, community can always vote to add liquidity reward to attract LPs back.
agree. LPs should push fot this upgrade !
First of all, I'm super happy that a delegate with a sizeable amount of delegated votes comes here and actually discusses the proposals with us smaller holders/non delegates. It's not something that happens a lot. Big delegates have been mostly absent and as a result, governance has been pretty much dead. I think this is changing, and I'm really happy. We are hearing that community managers are being hired. As a sidenote I think we need more active moderation here. More precisely we need to delete threads about future airdrops as they are really counterproductive and encourage scammers preying on gullible users. We should have a big banner saying there are no more airdrops planned.
Back on topic : I think we agree that our goal should be to have our LPs transition to v3, just like they transitioned to v2 about a year ago. V2 is the new V1 if you will. The transition should/will happen ; it's a matter of time essentially, insofar as V3 is a superior product and that it makes V2 (along with protocols who copy-pasted the code) obsolete.
So turning on the fee switch maybe a couple of weeks (the timeframe is what should be debated here in my view) after V3 goes live on L1 (Ethereum mainnet) could help us give a wake up call to LPs who still haven't transitioned. But mostly -- at least in my view -- it would be a strong symbolic action for governance to take at this point. Because it will also serve as a huge reminder that UNI holders can come together and take a collective decision on a fee switch proposal. In this way, the DeFi community can be reminded that UNI isn't just a pure governance token : one of its main purposes is to act as a stake in future protocol fees.
V2 fee switch also is a very nice compromise/middleground between no fee-switch at all and v3 fee switch.
In any event I don't see the turning on of the v2 fee switch as having any bad consequences. The reason for that is that v2 will be a "legacy" product very soon and the volume should naturally drop sharply once v3 goes live (same as when v2 was launched, really).
There are many advantages to a v2 fee switch turn-on proposal but one of them is that the code is extremely easy. As far as I know, it's a one-liner.
I think one of the next step to envision is to come up with a full proposal and maybe post it on snapshot as an informal temperature check.
But first we really need to debate this idea a bit more (especially the timeframe) and find additional delegates who would be willing to support this proposal.
Hopefully though this week brings optimism + v3, which then clears any hurdles fir fee switch.
I think that Uniswap team could remember, in a full trasparent way with a tweet or better a blog post, that sice March 15 it's possible to vote to activate fees switch.
My position is that we need to wait until volume really picks up with L2.
Until then and we need LPs to feel at ease during the migration... and w/o incentives (at the moment, it does look like there won't be any new incentives campaign... it's so quiet on this forum compared to what it was !), the best incentives remains 100% LP fees.
My position is that we need to wait until volume really picks up with L2.
Until then and we need LPs to feel at ease during the migration... and w/o incentives (at the moment, it does look like there won't be any new incentives campaign... it's so quiet on this forum compared to what it was !), the best incentives remains 100% LP fees.
v3 also gives us custom fee switch on a per-pool basis, so when volumes goes through the roof with v3 on L2, we can begin with select pools :slight_smile:
no need to rush the fee switch. all the impatient UNI holders should really sell if they think the switch needs to be turned on now... we need v3 to mature quite a bit before it makes sense ! good things come to those who wait... it makes perfect sense in this case
All the LPS hold UNI in huge amounts. Theres no legit reasons not to pull this switch
No way. They can’t have anything to do with fee switch or mentioning it. My guess is v3, then there will be a whales proposal for fee switch.
We pulling this switch today or what
I hear your points, but im not technically inclined enough to get the information you are looking for. More so I wanted to begin the discussion since such a critical opportunity is coming up and there is little to no discussion on the subject.
As for non-whale lp's, if bottom line was their biggest concern they would be lp'ing on sushiswap already because you can earn sushi on top of transaction fees. So a further exodus is imo overblown.
I hear your points, but im not technically inclined enough to get the information you are looking for. More so I wanted to begin the discussion since such a critical opportunity is coming up and there is little to no discussion on the subject.
As for non-whale lp's, if bottom line was their biggest concern they would be lp'ing on sushiswap already because you can earn sushi on top of transaction fees. So a further exodus is imo overblown.
However I would be curious for someone to analyze the overlap between all uniswap lp's and uni holders. I would wager its greater than 70% when compared to overall liquidity provided by the overlap.
5bps reduction will not have a material impact on people
For the sake of credibility, you should not misrepresent it as "just 5bps" or ".005%". The difference for an LP is 16.6% of income, it is not immaterial.
5bps reduction will not have a material impact on people
For the sake of credibility, you should not misrepresent it as "just 5bps" or ".005%". The difference for an LP is 16.6% of income, it is not immaterial.
large lp’s are likely to also be large uniswap stake holders and will also benefit
What about less-than-large LPs? What about those that don't hold UNI or hold few relative to their LP shares?
Why don't you collect address data and present a thorough analysis for everyone, so community can compare guaranteed losses of liquidity providers and potential gains in case they happen to hold UNI? I find the current proposal quite heavy on opinion and light on details.
Let’s do it! It’s a no brainer!
updates ? It seems a unreal situation....
Still no whales discussing this monumental issue nor overwhelming/active discussion. It’s just odd at this point.
To be, turning on the fee switch is an easy no brainer decision with much much more benefit than risks. People thought, without the liquidity reward, LPs would leave, but as it turned out, they did come back. Fee earned is only one factor in any LP's mind. security, volume and leading tech innovation (V3, L2 etc.) will all be reasons for LPs to stay with Uniswap even after 16.6% loss of income. Also, we will never know if LP will leave or not if we don't turn on the fee switch to try it out. So let's just turn it on to see what happens. If it really leads to significant LP leaving, which I think won't happen after all, community can always vote to add liquidity reward to attract LPs back.
agree. LPs should push fot this upgrade !
Guessing we can start with a consensus check since this vote already passed? https://snapshot.org/#/uniswap/proposal/QmVnsMXvSG84x3u2iYZ3nGWeXU4pRcfuKWwXnyjpD9j6To
I agree, The on fee switch and liquidity should be turned on simultaneously
Guessing we can start with a consensus check since this vote already passed? https://snapshot.org/#/uniswap/proposal/QmVnsMXvSG84x3u2iYZ3nGWeXU4pRcfuKWwXnyjpD9j6To
I agree, The on fee switch and liquidity should be turned on simultaneously
I think the primary goal of uniswap is to seize the market share. At present, it is necessary to give market makers higher incentives. I think once the cost switch is started, the interests of market makers must be hedged through uni mining incentives. I judge that 0.05% cost switch will not be opened in the short term.
It costs around $600 to interact with fish.vote :(
Wish I had enough votes to get this started. Tagging @Getty to get his thoughts and to get traction on a proposal.
I think the primary goal of uniswap is to seize the market share. At present, it is necessary to give market makers higher incentives. I think once the cost switch is started, the interests of market makers must be hedged through uni mining incentives. I judge that 0.05% cost switch will not be opened in the short term.
It costs around $600 to interact with fish.vote :(
Wish I had enough votes to get this started. Tagging @Getty to get his thoughts and to get traction on a proposal.
Has there been any update on this?
Both of these goals can be reached without the fee switch by just utilizing the treasury.
Both of these goals can be reached without the fee switch by just utilizing the treasury.
If participation in Uniswap governance is rewarded through staking rewards to governance participants, more voting power becomes available in case there is an important decision to be made.
It doesn't mean that these rewards have to come through fees, though. They can come in the form of inflation (treasury rewards distribution) towards actors who presumably bring more value to the governance token.
I'm yet to find a good reason why making Uniswap V2 a worse product for LPs and traders is superior to distributing the treasury that is meant to be distributed.
If the treasury is not distributed at a decent enough pace, Uniswap governance becomes more centralized to investors and the team due to the vesting schedule.
Glad to see great discussions that have been taking place related to the fee switch! We'd love to get more insight from the community related to the following questions:
Which liquidity pools in v2 should be turned on? The idea of turning on the switch for three different pools that reflect the three fee tiers that exist in v3 seems like it might provide valuable data points in the event we decide to turn on the fee switch in v3.
In the event we do turn it on, should we turn it on completely (.05%, which is a 16% decrease in LP's income) or should we do something smaller to hypotest the sensitivity LP's have to a fee switch? For example, V3 allows the fee switch to be as small as .03% (a 10% decrease in income), and starting at 10% for v2 might provide insightful data for us to refer to later.
What is the best mechanism to reward UNI holders after turning the switch on? Burning tokens, buybacks, or consolidating all switch fees and converting to ETH/DAI/etc? There may be different tax consequences to each approach, so that is very important to consider here.
Glad to see great discussions that have been taking place related to the fee switch! We'd love to get more insight from the community related to the following questions:
Which liquidity pools in v2 should be turned on? The idea of turning on the switch for three different pools that reflect the three fee tiers that exist in v3 seems like it might provide valuable data points in the event we decide to turn on the fee switch in v3.
In the event we do turn it on, should we turn it on completely (.05%, which is a 16% decrease in LP's income) or should we do something smaller to hypotest the sensitivity LP's have to a fee switch? For example, V3 allows the fee switch to be as small as .03% (a 10% decrease in income), and starting at 10% for v2 might provide insightful data for us to refer to later.
What is the best mechanism to reward UNI holders after turning the switch on? Burning tokens, buybacks, or consolidating all switch fees and converting to ETH/DAI/etc? There may be different tax consequences to each approach, so that is very important to consider here.
Additionally, it'd be incredibly useful to hear from anyone who strongly believes we shouldn't turn on the fee switch in V2.
I'm curious to hear your thoughts on what the long term ramifications of turning on the fee switch on v2. In the event it does incentivize migration to v3, might this demonstrate that a fee switch in general can lead LPs to flee Uniswap—i.e. if in the future we wanted to turn on the fee switch in v3 in the future a response we'd face is, "when you turned on the switch for v2 it led all the LPs to leave, so if we turn it on in v3, LPs will leave to a different DEX."
Also, what is justification for awarding UNI holders who don't participate in governance with a fee switch? Is it that it builds excitement to the UNI community, pumps up the price of UNI in the short-medium term, rewards people for acting as investors in the UNI project, or something else altogether?
Hello! We're a pretty sizable delegate (around 7,000,000 votes) with a solid following on Twitter and other student groups. We're in the process of crafting a recommendation for/against the fee switch. We've been working on this for a while now (v3 going live more quickly than anticipated threw a wrench in our plans) and planned on publishing a small Medium post on the pros and cons with our ultimate recommendation. Do you all think this would be beneficial?
The core team has not publicly identified all of their wallets. There would be no way to know whether or not they participated in a vote.
Let's go. We should have a vote, no matter what side you're on. https://twitter.com/ChrisBlec/status/1372658450434555904
Has there been any update on this?
Both of these goals can be reached without the fee switch by just utilizing the treasury.
Both of these goals can be reached without the fee switch by just utilizing the treasury.
If participation in Uniswap governance is rewarded through staking rewards to governance participants, more voting power becomes available in case there is an important decision to be made.
It doesn't mean that these rewards have to come through fees, though. They can come in the form of inflation (treasury rewards distribution) towards actors who presumably bring more value to the governance token.
I'm yet to find a good reason why making Uniswap V2 a worse product for LPs and traders is superior to distributing the treasury that is meant to be distributed.
If the treasury is not distributed at a decent enough pace, Uniswap governance becomes more centralized to investors and the team due to the vesting schedule.
Glad to see great discussions that have been taking place related to the fee switch! We'd love to get more insight from the community related to the following questions:
Which liquidity pools in v2 should be turned on? The idea of turning on the switch for three different pools that reflect the three fee tiers that exist in v3 seems like it might provide valuable data points in the event we decide to turn on the fee switch in v3.
In the event we do turn it on, should we turn it on completely (.05%, which is a 16% decrease in LP's income) or should we do something smaller to hypotest the sensitivity LP's have to a fee switch? For example, V3 allows the fee switch to be as small as .03% (a 10% decrease in income), and starting at 10% for v2 might provide insightful data for us to refer to later.
What is the best mechanism to reward UNI holders after turning the switch on? Burning tokens, buybacks, or consolidating all switch fees and converting to ETH/DAI/etc? There may be different tax consequences to each approach, so that is very important to consider here.
Glad to see great discussions that have been taking place related to the fee switch! We'd love to get more insight from the community related to the following questions:
Which liquidity pools in v2 should be turned on? The idea of turning on the switch for three different pools that reflect the three fee tiers that exist in v3 seems like it might provide valuable data points in the event we decide to turn on the fee switch in v3.
In the event we do turn it on, should we turn it on completely (.05%, which is a 16% decrease in LP's income) or should we do something smaller to hypotest the sensitivity LP's have to a fee switch? For example, V3 allows the fee switch to be as small as .03% (a 10% decrease in income), and starting at 10% for v2 might provide insightful data for us to refer to later.
What is the best mechanism to reward UNI holders after turning the switch on? Burning tokens, buybacks, or consolidating all switch fees and converting to ETH/DAI/etc? There may be different tax consequences to each approach, so that is very important to consider here.
Additionally, it'd be incredibly useful to hear from anyone who strongly believes we shouldn't turn on the fee switch in V2.
I'm curious to hear your thoughts on what the long term ramifications of turning on the fee switch on v2. In the event it does incentivize migration to v3, might this demonstrate that a fee switch in general can lead LPs to flee Uniswap—i.e. if in the future we wanted to turn on the fee switch in v3 in the future a response we'd face is, "when you turned on the switch for v2 it led all the LPs to leave, so if we turn it on in v3, LPs will leave to a different DEX."
Also, what is justification for awarding UNI holders who don't participate in governance with a fee switch? Is it that it builds excitement to the UNI community, pumps up the price of UNI in the short-medium term, rewards people for acting as investors in the UNI project, or something else altogether?
Hello! We're a pretty sizable delegate (around 7,000,000 votes) with a solid following on Twitter and other student groups. We're in the process of crafting a recommendation for/against the fee switch. We've been working on this for a while now (v3 going live more quickly than anticipated threw a wrench in our plans) and planned on publishing a small Medium post on the pros and cons with our ultimate recommendation. Do you all think this would be beneficial?
The core team has not publicly identified all of their wallets. There would be no way to know whether or not they participated in a vote.
Let's go. We should have a vote, no matter what side you're on. https://twitter.com/ChrisBlec/status/1372658450434555904