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Uniswap liquidity mining after the moratorium on three possibilities

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Will UNI Flow Mining restart?

Original title: "Three Possibilities after the Suspension of Uniswap Liquid Mining"

Source: Babbitt

According to the original plan, leading decentralized exchange Uniswap will end its initial liquidity mining program at 8:00 on November 17, Beijing time, which may result in the loss of some of Uniswap's liquid funds. It is reported that the Uniswap protocol has locked up $3.18 billion in cryptography assets so far.

As for whether Uniswap will restart its mobile mining after the suspension of its mobile mining activities, and whether there are other possibilities, the author Vault Research has conducted some analysis. He believes that it is not very likely that Uniswap will restart its mobile mining activities at present.

The following is the translation:

UNI mobile Mining to Last?

I don't think so.

On November 17th, the initial mining activities of Uniswap governance token UNI will end. Some project communities (SNX, YFI, etc.) have tried to enter the UNI mining list through governance, but so far none of the projects have been successful, and every governance proposal has failed. This is because the project side sets a high requirement for the number of participants and governs a low participation rate. UNI mining will therefore stop until the new mining proposal is approved.

So the future of UNI is in the hands of the community. What does that community think? Let's guess.

From the perspective of governance participation, the community refers to the UNI token holders. What do they want? The rise in currency prices, of course.

So will token holders want to resume liquidity mining? I don't think so.

Why flow mining?

A few days ago, there was an unofficial UNI community meeting. According to tweets from some of the participants (@AutismCapital and @0xMaki), it didn't seem to be a great success. But fortunately, just before the end of the meeting, Robert Leshner stepped in, proposing to maintain the liquid mining of ETH/USDC and ETH/WBTC trading pairs, while Gauntlet worked on the analysis related to the reward program.

What about the vote?

Basic question: Why flow mining?

1. Acquire users for the product;

2. Collect liquidity to improve the "tradability" of tokens;

3. Distribution of tokens;

I think these are the three core reasons for fluid mining. Let's look at them one by one.

1. Get users & NBSP; for the product;

Uniswap is currently the most popular DEX, and there are reasons to expect it to continue to hold that lead; One possible threat to Uniswap is that as its tradability declines, its liquidity shifts to rivals. But because Uniswap now has such a big advantage, the threat does not seem that big, at least for a while; We'll see this when the mining is over;

2. Collect liquidity to improve the "tradability" of tokens

1) UNI Liquidity Mining has no 2 pool program like ETH/UNI. So the original plan was to collect liquidity for Uniswap;

2) UNI tokens have enough liquidity without mining rewards. In addition, many large CEX have launched these tokens, so from the perspective of tradability, THE UNI community does not have enough motivation to create 2 pools. In addition, the cryptocurrency community has a very bad impression of pool 2, so opening pool 2 is an inappropriate option;

3) No 2 pool, means back to the first point;

"Increasing liquidity just means that price discovery can be faster and more accurate. If your project is shit, increasing liquidity will only help it go to zero faster. If your project is good, it doesn't matter if the token is temporarily illiquid."

3. Give out tokens

1) Many of the early projects were difficult to allocate tokens and establish initial liquidity. One way to solve this problem is liquid mining;

2) But since each Uniswap user can initially receive 400 UNI tokens, UNI has no initial supply/liquidity problem;

3) I think the distribution of 400 UNI per user is a good idea. Handing out more tokens lowers the price, so if we're going to influence the price, it's better to do so in the early stages from a price point of view + the psychological security of the product builder (which is very important);

None of these three reasons fits the current Uniswap. Therefore, UNI does not need liquid mining. If it does, it will be to promote the Uniswap Exchange.

Ironically, promoting Uniswap won't be that important for ordinary UNI holders in the near future, as Uniswap is currently successful.

Promoting Uniswap is very important for the Uniswap team and VC, and fortunately they have a lot of tokens, as I've written in the past. So when there is an emergency, the Uniswap team and the VC team participate in the vote. There may be some legal issues here, but the Uniswap team recently hired a chief legal officer, so they will find a way to mitigate them.

Summary & have spent

1) UNI token holders (except teams and VC's) have no reason to vote to restore liquidity to mining as this may cause the currency price to fall;

2) If there is a case for recovery in the future, it will be when competitors run out of Uniswap liquidity, as we saw with Sushiswap at the time;

3) Liquidity mining will resume only if the team /VC or people who support their vision vote;

Possible Scenarios: The bold and ideal situation & NBSP;

A bold hypothesis: Burn the rest of UNI.

The probability of this happening? Token holders hoping for a short-term profit are likely to vote once a proposal is made. Of course, the team and the VC are likely to object, but if they are as silent as they are right now, that could happen.

Another possibility is to continue to retain the ETH/USDC and ETH/WBTC trading pairs for liquidity mining.

A more long-term ideal would be to announce another use case for UNI at the protocol level and combine the rewards with it. This is likely to happen when Uniswap V3 is released, and I assume the team is trying to find such a solution.

Let's see how UNI is going to evolve.