Uniswap, the world’s largest decentralized exchange, has conducted its first community call, but the call ended with unclear direction fromUniswap, and no proposals submitted for extending UNI farming or launching new pools.
It has been reported that Uniswap has been running four ETH-based liquidity pools since September 17 that have been earning 583,333 UNI per week, per pool.
However, the collateral injection of over $2.4 billion has propelled the DEX to the top of the DeFi list in terms of total value locked, but those incentives are about to come to an end.
The report said that the fear among UNI holders is that token prices may dump in the short term if users withdraw liquidity and sell off previously mined UNI when incentives dry up. In the long term, the reduction in new UNI could help prices. UNI prices have made a slight comeback over the past week, topping $3.
Also, there is the concern that up to $1.1 billion dollars’ worth of ETH could be withdrawn from these four pools and either sold or reinvested into higher-earning incentives.
FYI Liquidity Mining program confirmed to end on 17 Nov as discussed on latest governance call. https://t.co/OTETQTg75m — Wangarian (@Wangarian1) November 12, 2020
ETH rallied when UNI farming began, so the opposite could occur when it ends.
The community call was hosted by Uniswap team member “Monet Supply.” It began with a roundup of recent governance issues but was quickly steered toward the burning topic of what will happen when liquidity mining ends on Tuesday.
Thank you 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/uMDWKa2PJ0 If anyone is interested in making a transcript, please get in touch! — monetsupply.eth (@MonetSupply) November 13, 2020
Likewise, Matt Aaron, the crypto podcaster, asked about internal discussions regarding this date in order to prevent another “vampire attack” such as the SushiSwap incident, in which a clone offered large incentives to drain liquidity from Uniswap. Aaron was concerned about liquidity leaving the protocol and asked how it will incentivize users to remain there once rewards had dried up.
Matteo Liebowitz, the head of strategy at Uniswap, did not give much away with a “no comment” response.
He just said:
“Any decisions regarding liquidity mining has to be made by community members rather than the Uniswap team.”
Furthermore, 0xMaki from SushiSwap, who was also part of the call, said that if anyone has a subsidy or incentive for liquidity on the platform, someone has to pay for it, and in this case, it is UNI token holders.
“If you look at DEX statistics, Uniswap is leading on unique number of traders and I am willing to bet that that has absolutely nothing to do with the liquidity mining program.”
As he didn’t see any threat from other protocols trying to subsidize their system to get ahead, there were going to be no definitive answers on the liquidity farming issue. The discussion moved on to the faster Ethereum layer-2 Uniswap v3 and integrations, but again, Liebowitz was giving nothing away when questioned, maintaining that he was just an observer.
The chat that accompanied the video call discussed some potential new liquidity pools, but there were no conclusive answers as to what will happen when the four farms containing over $2.4 billion close.
The report said that in one concrete development to emerge in the past 24 hours, it appears the General Counsel of Protocol Labs Marvin Ammori has joined Uniswap as its Chief Legal Officer.
Crypto news: Looks like @ammori's moved from FileCoin to Uniswap. Big deal as Marvin's one of the top tech/regulatory lawyers in the countryhttps://t.co/LEDXRue2FN pic.twitter.com/rF2RemSLjm — Jeff Roberts (@jeffjohnroberts) November 12, 2020
Thus, a number of legal issues were discussed at the community call, and now it seems Uniswap has the man for the job.