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The largest decentralized exchange in the world, Uniswap, has just conducted its first community appeal primarily to discuss which direction to take when UNI agriculture concludes on November 17th.
But the call ended with no clear direction from Uniswap and no proposals made to extend UNI farming or launch new pools, so next week could bring a lot of volatility into space.
Uniswap has operated four ETH-based liquidity pools since September 17 that have earned 583,333 UNI per week, per pool. The collateral injection of over $ 2.4 billion pushed DEX to the top of the DeFi list in terms of total locked-in value, but those incentives are about to end.
The fear among UNI holders is that token prices may drop in the short term if users withdraw cash and sell off previously drawn UNI when incentives run out. In the long run, the reduction of the new UNI could help prices. UNI prices have made a slight comeback over the past week, surpassing $ 3.
There is also the concern that up to $ 1.1 billions of dollars of ETH it could be withdrawn from these four pools and sold or reinvested in higher earning incentives. ETH bounced back when UNI farming started, so the opposite could happen when it ends.
1 / November 17th, $ UNI agriculture will end.
At this time ~ $ 2.3 billion in UNI agriculture funds are being distributed, with $ ETH being the reference token.
This means that there are currently ~ $ 1.1 billion in ETH blocked, which are about to be released into the wild.
Where do you think ETH will go? pic.twitter.com/nW3via0vH6
– Wangarian (@ Wangarian1) November 11, 2020
The community call was hosted by Uniswap team member “Monet Supply”. It started with a roundup of recent governance issues, but was quickly steered towards the burning topic of what will happen when the cash draw ends on Tuesday.
Thanks to everyone who attended the @UniswapProtocol community call today!
For those who missed it, here are the video and chat logs of the event:
️ https://t.co/cdSg53yGgP
https://t.co/uMDWKa2PJ0If anyone is interested in doing a transcript, contact us!
– monetsupply.eth (@MonetSupply) November 13, 2020
Crypto podcaster Matt Aaron asked about internal discussions on this date in order to prevent another “vampire attack” like the SushiSwap incident, in which a clone offered great incentives to drain cash from Uniswap. Aaron was concerned about the liquidity leaving the protocol and asked how it will incentivize users to stay there once the rewards run out.
Uniswap strategy chief Matteo Liebowitz didn’t reveal much with a “no comment” response, but added:
“Any decisions regarding cash extraction must be made by community members rather than the Uniswap team.”
0xMaki of SushiSwap, also part of the call, said that if you have a subsidy or liquidity incentive on the platform, someone has to pay for it, and in this case they are UNI token holders.
“If you look at the DEX stats, Uniswap leads the unique number of traders and I’m willing to bet that this has absolutely nothing to do with the cash extraction program.”
He didn’t see any threats from other protocols trying to subsidize their system to move forward.
Realizing that there would be no definitive answers on the issue of liquidity farming, the discussion moved on to the faster Ethereum layer-2 Uniswap v3 and integrations, but once again Liebowitz didn’t reveal anything when questioned, claiming he was alone. an observer.
The chat that accompanied the video call discussed some potential new cash pools, but there have been no conclusive answers on what will happen when the four farms containing over $ 2.4 billion are closed.
In a concrete development to emerge in the last 24 hours, it appears that Protocol Labs General Counsel Marvin Ammori has joined Uniswap as its legal officer. One of the most high-profile attorneys in space, advised President Obama on net neutrality and recommended the TV show Silicon Valley mashed potato.
Numerous legal issues were discussed during the community call and now it appears Uniswap has the man for the job.
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