Blockworks Research researcher boccaccio recently shared his views on Uniswap building L2 network Unichain on X. It believes that the launch of Unichain may continue to weaken liquidity providers (LP) and Ethereum, and pose a potential threat to other L2s.
1/@Uniswap's Unichain: The Continuous Shafting of LPs and Ethereum, and the Potential Shafting of Other L2s: â To be a validator on the Uniswap Validation Network, node operators need to stake UNI tokens on the Ethereum mainnet. â The active set of validators will be⊠pic.twitter.com/zf2Mc2GC83
â boccaccio (@salveboccaccio) October 16, 2024
According to the current design architecture, if you want to become a validator on the Uniswap Verification Network (UVN), node operators need to stake UNI tokens on the Ethereum mainnet, and the active validator set will be participated by the minority with the highest UNI pledge weight. The person decides. Boccaccio believes that UVNâs weight pledge verification mechanism may cause most of Unichainâs âMaximum Extractable Value (MEV)â and fee rewards to be in the hands of a few people (the worst case is Uniswap Labs, the best case is funding institutions ).
For Uniswap, the biggest challenge in launching Unichain is how to attract users to this new system when other L2 solutions (such as Base on Superchain, etc.) are already available. At the moment, it seems that Uniswap's goal is to have enough liquidity on Unichain to make exchanges cheaper than other options (even taking into account cross-chain interoperability costs), while the long-term goal is to make Unichain a liquidity layer .
Boccaccio believes that Unichain may initially compete with other L2s, especially L2s on the Optimism super chain. But Ethereum will still retain a large amount of liquidity, which cannot be easily transferred to other networks. On the other hand, boccaccio also pointed out that Unichain may also resolve the long-standing discussion about Uniswapâs fee switch mechanism. A potential solution may involve Uniswap allocating a portion of the revenue from MEV to UNI token stakers on the Ethereum chain.
Finally, Boccaccio emphasized that Unichainâs impact on asset issuance on Ethereum and L2 is very important. While existing liquidity cannot be transferred directly, protocols, applications and users may choose to issue tokens on the new Unichain. In this case, Unichain not only threatens the transaction volume of Ethereum L1 and other L2s, but also affects the issuance of assets on the chain.
Judging from Unichainâs plans, this is a significantly different solution from the existing L2 ecosystem. If Unichain can successfully capture transaction volume and distribute it to token holders and stakers, especially if it can solve cross-chain swaps and transactions of ETH, WETH, USDC, USDT, then it may succeed. Furthermore, being able to capture these cross-chain fees and return them to UNI token holders may even significantly change the value proposition of UNI.
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