Uniswap (UNI) Liquidity Mining Extension Proposal Ready for Final Voting
The proposal to continue distributing Uniswap (UNI) tokens for two more months at half the earlier rate has been moved forward as a formal governance proposal. By Nov 28, the snapshot poll had the required threshold of 50,000 UNI after five days of voting.
Quorum Met, Final Voting in the Next Few Days
The community is now preparing to vote on the proposal one more time.
10 million UNI will be required for submission in a poll that will last six days. This time, 40 million UNI tokens are needed for consensus. If it passes, there will be a two-day time-lock before execution.
A multi-stage voting process is vital because of how proposals can impact the Uniswap ecosystem.
Launched in November 2018, the protocol has grown exponentially to be the largest decentralized exchange in Ethereum.
UNI to Incentivize Liquidity Providers
Uniswap had no governance tokens before mid-September. It was, therefore, susceptible to vampire attacks from competing protocols like Sushiswap.
Contributors of liquidity to any Automated Market Makers (AMM) pools stand to lose funds through impermanent loss. Deflationary and value governance tokens are seen as mitigation, drawing liquidity providers to the platform.
To counter this, Uniswap launched a governance token, UNI, in September. They also airdropped tokens to historical users and SOCK redeemers.
At the same time, they announced a two-month liquidity mining program. 20 million UNI would be distributed equally to five pools.
Signaling the beginning of liquidity mining, Uniswap’s total value locked (TVL) rose.
The New UNI Distribution Proposal
However, on Nov 17, the day the initial distribution ended, LPs withdrew their assets. Subsequently, Uniswap’s liquidity fell by over 50 percent. It is during this time when the current proposal was passed.
Unlike before, the total number of tokens distributed to the four pools would be halved. Moreover, there were other changes. From the latest temperature check, UNI tokens wouldn’t be distributed equally to all pools.
Instead, WBTC/ETH would receive 1.67 million UNI tokens. The USDC/ETH, USDT/ETH, and DAI/ETH pools will each receive 1.25 million and 850k, respectively.
Commentators now say the skewed distribution on UNI pools would help maintain the BTC surge but may not overly improve the protocol’s functionality.
As BTCManager reported, there are several projects with better features and functionality. Watermelon, for instance, launched from IOST and enables liquidity mining from seven pools. The project has a dual-token issuance system from where 90 percent of the four million XG tokens will be available for yield farmers.
