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Understand the future value of UNI from the perspective of Uniswap operation, history and market position

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Uniswap's success is largely based on the convenience provided by liquidity.

Source: Lars Hoffmann, The Block

Translation:Encryption valley

Abstract:

Uniswap unveiled the much anticipated Governance Token UNI on Wednesday.

The Block studies The distribution of token to analyze The status of Uniswap in The field of decentralized exchanges.

After months of anticipation, Uniswap has finally introduced its Token, which aims to achieve Shared community ownership by enforcing a system of governance on the chain. The governance system will facilitate the development and use of protocols and the development of the broader Uniswap ecosystem.

Why is Uniswap important

Uniswap is the leading decentralized exchange protocol on Ethereum and one of the few DeFi projects to find a clear product and market alignment. It aims to create "an environment where anyone in the world can access financial services without fear of discrimination or counterparty risk".

In recent weeks, daily trading volumes on Uniswap have begun to match those on centralised exchanges, suggesting there is considerable demand for unlicensed financial services. Uniswap generated $3.02 billion in trading volume last week, of which about $9 million went to liquidity providers (LP).

By comparison, Coinbase, one of the largest centralised exchanges, saw just $2.51bn of trading in the same period.

Since its inception, more than 250,000 different addresses have interacted with the protocol. Nearly 50, 000 different addresses as LP, and made $56 million in the process.

The way Uniswap works

In its current version, Uniswap V2 allows anyone with access to the Internet, the Ethereum wallet and the ETH (or ERC20 token) to seamlessly exchange assets in an unlicensed manner.

Uniswap USES an open source structure with a set of smart contracts on the chain that eliminates the need for mediation and prioritized decentralization, censorship, and security. Its automated market maker (AMM) model, known as the Constant Product market maker model (CPMM), allows anyone to easily and quickly provide liquidity in exchange for a 0.3 per cent fee per transaction.

Source: Uniswap

The history of Uniswap

Uniswap initially received a $100,000 grant from the Ethereum Foundation in November 2018. Its first version, Uniswap V1, was released at DevCon 4 in November 2018. In April 2019, Uniswap raised $1.82 million in seed financing from Paradigm at an early valuation of $5 million. Its second version, Uniswap V2, was launched in May 2020.

Uniswap V1 only accepts pools of capital from ERC20 and ETH -- leading to reliance on Ethereum prices, while Uniswap V2 enables cross-exchanges such as ERC20 stabilisers for DAI and USDT. This improves price execution by reducing gas fees and reducing slippage points. In addition, Uniswap V2 also introduces new price Oracle and Flash swaps.

In June, Uniswap raised $11 million in A Series A funding round at an early valuation of $39 million to fund its next iteration of the agreement, with Uniswap V3 expected to be launched by the end of 2020. This round is led by Andreessen Horowitz with Union Square Ventures, Version One, Parafi Capital, Variant, SV Angel and A.Capital. And Paradigm also participated in A round of financing.

Uniswap's market position

The newer decentralized exchanges are significant improvements over their predecessors in terms of liquidity provision and user experience. Recently, DEX has grown so rapidly that trading volume has begun to rival that of centralized exchanges.

To date, Uniswap is a leader in both volume and liquidity, with monthly turnover exceeding $10bn. So far in September, $9.9 billion has been traded, or 66% of all DEX transactions (excluding SushiSwap and Swerve).

Uniswap's success is largely based on the convenience provided by liquidity.Its liquidity has risen steadily since the start of the year and has recently soared as a result of competing, forked liquidity mining events such as SushiSwap.

Source: The Block Research, Dune Analytics

Meanwhile, Uniswap's user base has grown in tandem with this year's DeFi craze. This phenomenon is traceable: because Uniswap is an essential part of the entire DeFi infrastructure, it integrates hundreds of DAPPS.

Source: Dune Analytics

Despite the recent launch of Sushiswap's community fork, Uniswap is still outperforming Sushiswap in terms of volume and liquidity.

Source: The Block Research, Dune Analytics

Moreover, despite LP's collective migration to SushiSwap during its highly incentivised liquidity mining event, Uniswap remains the most liquid DEX- excluding the special DEX for stability COINS such as Curve and Swerve.

Source: The Block Research, Dune Analytics

UNI Token final direction

60% of UNI supplies are allocated to members of the Uniswap community. At startup, 15% of the total UNI tokens -- - 1000000000 UNI in UNI - 150000000 - users can be made of history (400) each only address, liquidity providers (since Uniswap v1 deployment ratio calculated per second) and SOCKS for/holder (10000) each only address according to as of September 1, 2020 the world coordinate 12:00 am a snapshot of the claim.

At the time of this writing, less than 24 hours after its launch, UNI Token has become the second most widely distributed DeFi token, with over 67,000 unique token-holder addresses and counting. That's more than three times as much as its community fork SushiSwap. In addition, about 76.8 million UNI tokens have been claimed by about 125,000 different addresses, or 51.2% of the 150 million UNI tokens claimed so far.

Of these 125,000 different addresses, about 95,000 have applied for 400 UNI Token addresses, which can be counted as historical users of Uniswap.

At the time of this writing, the top 500 UNI holders jointly hold 96.81% (968,052,542/1,000,000,000) of total UNI supply. Given that teams, investors, advisers, and unaffiliated community UNI allocations -- and that ratio is still declining as more community users apply for initial token allocations -- the token holder base has shown significant signs of fair and equal distribution.

Source: Etherscan

With multiple community members claiming their UNI Token, Gas charges for Ethereum in Gwei soared, making Ethereum congested and almost unuseable again.

Source: Dune Analytics

Aggregate supply and distribution

UNI has been released in Genesis and will be available within four years. The preliminary distribution for the initial four years is as follows:

Forced the ️ 60% to Uniswap community members - 600000000 UNI (UNI)

Forced the ️ & have spent21.5% given to team members and prospective employees, a four-year linear release & NBSP; - 215101000 UNI

Forced the ️ & have spent17.8% to investors, 4-year linear release --178,000,000 UNI

Forced the ️ & have spent0.07% to consultant, 4 years linear release --6,899,000 UNI

Source: Uniswap

Since historical users and liquidity providers have claimed 15% token, the governance library will retain 43% of the UNI supply --430,000,000 UNI. UNI Token continuously releases the Token linearly according to the following schedule. UNI assignments by teams, investors, and advisers will unlock tokens on the same schedule.

Source: Uniswap

UNI tokens will pass through sponsorsGrants, community initiatives, mobile mining and other projects continue to be distributed.

Initial working capital extraction

To incentivise and channel liquidity to the flow, UNI will initially be provided through four liquidity pools -- and from October 18, UNI holders will be able to vote to add more.

The initial mobile mining program will begin at 12:00 am UTC September 18 and continue until 12:00 AM UTC November 17. Initially, four liquidity pools --ETH/USDT, ETH/USDC, ETH/DAI, and ETH/WBTC on Uniswap V2 -- will be eligible for awards. Each pool will allocate 5 million UNI to LP and about 54 UNI every 15 seconds in Ethereum block.

inflation

After four years of linear release, there would be a permanent rate of inflation of 2% a year. This is to ensure the continued participation and contribution of the community to Uniswap at the expense of the mobile UNI holders. It is unclear whether the governance layer will be able to change that policy.

UNI Token today

The UNI Token's main function is to manage the Uniswap protocol.

Governance will be online from day one, but Treasury has a 30-day grace period to ensure widespread distribution of tokens and give community members enough time to familiarize themselves with the governance system. Therefore, the governance system of the Agreement will visit UNI in Treasury starting from 12:00UTC on October 18, 2020.

After the 30-day grace period, UNI Token holders will be able to access Treasury directly through the governance system. According to Uniswap, this opens up "a world of infinite possibilities". The team wants to "see a variety of experiments, including ecosystem grants and public interest grants, both of which could lead to additional growth in the Uniswap ecosystem."

What matters most is that... Control of the fee conversion is locked for 180 days.

Uniswap's initial governance plan is as follows, and governance changes may occur in the future:

Forced the ️ accounted for 1% of total supply UNI (delegate), submit Suggestions.

Forced the ️ & have spentA quorum requires 4% of UNI supplies to vote "yes".

Forced the ️ & have spentThere is a seven-day voting period

Forced the ️ & have spentThere is a 2-day delay lock time for execution

Uniswap stresses the responsibility of UNI holders to ensure that governance decisions are in accordance with applicable laws and regulations and that team members will not be directly involved in governance in the foreseeable future.

Look into the future of UNI Token

So far, Uniswap doesn't directly take a percentage of the deal as its own fee. However, in the future, it is highly likely that the community will implement a transaction fee governance scheme, benefiting from extremely high volumes - as long as the 180-day fee conversion lock expires.

Can Uniswap incorporate Rent-Seeking components into its model without leaving LP and possibly branching outA version that turns off rent-Seeking components remains to be seen. Uniswap V2 introduces the possibility of a 0.05% protocol fee rather than allocating 0.3% of the fee entirely to LP. Once enabled, 0.05% of the fee will be allocated to UNI holders.

The list of

Uniswaps surprised the community with the UNI after Curve introduced CRV tokens. Because Uniswap is dominant in the DeFi ecosystem, the centralized exchanges traded within hours of the launch of the UNI at 00:13 UTC. The speed of listing is unprecedented.