An interesting discussion point was raised recently on the announcement of Uniswaps V3 release which is tipped for a May launch. The project aims to reduce slippage by providing liquidity providers the ability to lock in the value at which they wish to trade at. This itself will protect investors from major slippage events.
Furthermore, Uniswap is also redressing their fee structure and better allocating it to mirror risk. The fee tiers will be 0.05% 0.30% and 1% based on the risk LP enter into. In the hopes of opening up more markets and provide a better liquidity environment. Effectively providing financial incentives for LP's to enter other pools.
The fees will also tier towards different pairs as Uniswap seems to be a little salty that stable coins remain the preferred pairing option and come at the least amount of risk yet generated the same amount of profits for LP's. Further assessments indicated that those profits weren't being reinvested into Uniswap but were being taken as profit. A move Uniswap is looking at addressing be incentivising people to retain their profits on the DEX by ensuring lesser returns so that more liquidity is provided.
Uniswap is ultra salty at its competitors such as Sushiswap who, due to open source code was able to copy and paste their entire business model and now account for 20% of the market. Uniswaps market is a whopping 60% and their view is that they should retain the 80% of DEX.
Further aim was taken at Binance and other DEX's popping up with Uniswap code and have taken out licensing under BSL1.1 which will provide it with the opportunity to take action against DEX's springing up using their code.
However, integrations will still be able to link their services directly to uniswap, a move it believes will increase it's market dominance in the sector.
Uniswap also is planning to focus on out pricing its competitors by providing $US2Billion in start up capital to any new projects launched through uniswap through a community grants scheme.
Governance token holders will be able to vote on which project they deem to be worthy of listing and the final decision remains with token holders.
2021 has gotten off to a firey start with Uniswap perceiving itself as being under attack by competitors. A naturally occurring instance in any business sector. Eventually you will have rivals entering the market.
Their strategy on tackling the issue I must admit is a little at odds with decentralisation and appears to me that they are attempting to centralise DEX's. I can understand their saltiness at someone utilising their source code but alas, that is block chain tech.
I think the key factor Uniswap hasn't considered is that it is built on a High GAS consuming chain and jts success relies on Ethereum's ability to keep the masses engaged and participating. If fees exceed community expectations the community will naturally flee to a cheaper chain.
This made me think, was uniswap focusing in on CUB? Still a relatively young player but any company dominating the sector does so by scanning it's horizons and assessing future up and coming projects and their potential ramifications on their main business plan.
Leo Bridge will also provide an avenue for people to exit Ethereum and enter binance relatively easy. A much needed service for cryptocurrancy users but a business killer for the top of the chain.
Only time will tell but my money is on CUB being perceived as an incoming threat and we will see this major players attempt to retain the market through any means necessary.
What are your thoughts?
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