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CodexDAO appeared at Uniswap community meeting and presented mobile mining solutions

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Founded in 2019, CodexDAO is a decentralized autonomous organization made up of a group of senior blockchain engineers, professional market makers, and decentralized protocol researchers

Qilin Protocol on Uniswap Community Call #6

原文来源： Qilin Protocol

Uniswap is a decentralized trading protocol based on the Ethereum blockchain that enables automatic liquidity provision by exchanging cryptocurrencies in an exchange pool rather than an order book. The Uniswap Governance team launched the Uniswap Grant Program in the first half of this year with the goal of expanding ecological construction, broadening community participation, building a strong developer toolkit, and encouraging more teams to work on smart contracts for mobile mining.

CodexDAO 成立于 2019 年，是由一群资深区块链工程师、专业做市商和去中心化协议研究人员组成的去中心化自治组织。 DAO 致力于持续的去中心化实验，以推动密码朋克世界的形成。

In May this year, CodexDAO designed a liquid mining solution based on Uniswap V3 architecture. The core idea is to allocate liquid mining rewards based on fees. And CodexDAO formally applied for the Uniswap Grant Program, hoping to get support from the UNI community. Make the tool more widely exposed and better used.

On July 28, CodexDAO member JC Zhang participated in Uniswap's 6th community meeting to present new mobile mining solutions and answer related questions from the Uniswap community. The following is part of the meeting.

Q: What is the background behind CodexDAO's liquid mining solution?

A: What we are presenting to the Uniswap community is a new liquidity mining solution based on a peripheral smart contract developed for Uniswap V3. We proposed this solution in May this year when it was the first publicly available liquid mining tool on Uniswap V3.

We believe that the liquidity migration from V2 to V3 will stimulate faster evolution of the overall DeFi market as Uniswap V3 is more capital efficient than V2 and V3 can provide more functionality.

However, one of the core problems of liquidity migration is that there is no liquidity mining tool available for V3, and the tool-based solution provided by CodexDAO can accelerate the migration process of liquidity from V2 to V3.

Q: What is the main problem solved by this mobile mining scheme?

A: Our mining contract uses a different approach to Paradigm's V3 buy and sell contract proposed by Dan Robinson. The buy and sell contract is based on the criteria of a liquid mining model: the user's liquidity share of overall active liquidity. This is also the first mobile mining model used. After a redesign, we added a Tick range to better fit Uniswap V3. Our mining contract, which is currently undergoing internal testing, revolves around a liquidity share approach and Tick, with effective liquidity as the basis for rewards.

One problem with the standard liquidity provision model is that it has a flaw in unpledged liquidity, a known problem in the previous Dan Robinson proposal. Since this issue is not completely resolved, the user will receive additional rewards that will remain unallocated indefinitely. Qilin's model, on the other hand, is based on transaction costs in order to reasonably allocate rewards according to effective liquidity.

Q: How exactly does this liquid mining solution work?

A: This mining contract is built on Uniswap V3's publicly licensed peripheral contract and has a liquid mining capability. In essence, it is more accurate to call them "enhanced peripheral contracts with built-in liquidity mining capabilities". Users can deposit working capital through our capital pool and apply for transaction fees, from which they receive corresponding mining incentives.

The way the contract works is that we first define what is effective liquidity and then allocate liquidity mining rewards based on the proportion of the user's transaction costs to the total transaction costs generated by the liquidity pool. This approach would solve the problem of unpledged liquidity.

Q: What's next for the CodexDAO liquid mining scheme?

A: We submitted this solution to the Uniswap Grant Program several weeks ago. We realize that this tool will be used more widely in the future, so we plan to continue to develop the product on the main web and other test networks, and open source the code for everyone to make the product known and available to more people. The product is currently undergoing internal testing. After its official launch, the project side will jointly hold liquidity mining activities based on V3 to accelerate the large-scale migration of liquidity from V2 to V3.