Deploy Uni V3 contracts to AH
Tl;dr
Deploy Uni V3 contracts to Asset Hub. This proposal requests funding for the deployment cost of 105,000 USD, payable to GFX labs.
Introduction
@DAOplomats, on behalf of the Polkadot Community, is submitting a proposal to the Uniswap DAO to deploy the Uniswap V3 contracts to the Polkadot Asset Hub. This proposal comes after receiving feedback from the initial discussion we hosted on the forum.
Polkadot will receive its much-anticipated 2.0/Plaza upgrade and deploy EVM-compatible PolkaVM in December. We believe the Asset Hub should enable support for Uniswap V3 contracts as the natural process of upgrading the current Uniswap V2-based asset swapping pallet.
Why Uni V3
A side-by-side comparison of the current asset conversion pallet and Uni V3.
1. Concentrated Liquidity
Uniswp V2 uses the 𝑥*𝑦= k curve where Price: 𝑃 = 𝑦/𝑥. This method is inefficient for tokens that trade in a narrow price range and distribute the liquidity across the entire price range, 0 to infinity.
V3 improves this by introducing price as the root of the two tokens and allowing the concentration of liquidity to a specific price range. This concentration enables more effective trades, reducing slippage. The liquidity is represented by Non-fungible tokens, which make the raged position effective to manage.
2. Capital Efficiency
V2 required the deployment of liquidity in a 50/50 manner, but in V3, the price can be distributed across multiple ranges and provide single-sided liquidity. Liquidity providers can distribute their capital across multiple range orders, enabling on-chain limit orders.
Uni V3 vs Hydration -
| Feature | Uniswap V3 | Hydration |
|---|---|---|
| Liquidity Model | Concentrated liquidity with custom price ranges | Omni-pool with unified liquidity across assets |
| Capital Efficiency | High, but requires active management | High, with passive management |
| Fee Structure | Multiple fee tiers (0.05%, 0.30%, 1%) | Single fee across the omni-pool |
| Cross-Chain Support | Limited | High via Polkadot’s cross-chain messaging |
Cost Breakdown
Uniswap deployment cost:
45,000 USD paid to GFX Labs, a technical contributor to Uniswap DAO, responsible for multiple cross-chain Uniswap deployments.
The deployment cost will cover
- recompiling the code and deployment according to Uniswap DAO Standards.
- Deployment of a Wormhole read Bridge
- deployment registration through onchain vote at Uniswap.
The cost is fixed for all the new chain deployments and is documented by the Uniwap Accountability Committee.
UI maintenance: 5,000 USD/month paid for 1 Year, 60000 USD
Total: 105,000 USD
The allocated funds will be escrowed in a multisig until the deployment
Multisig signers: 2/2
Alex:Parity
DAOplomats
We have invited validators and Polkadot DAOs to be on the multisig; unfortunately, all the requests were denied "due to a lack of compensation for signers."
Stakeholders
Proposer: @DAOplomats
Delegates of Uniswap DAO responsible for coordination between Polkadot DAO, Uniswap DAO and other stakeholders. We are also authoring the proposal.
Deployer: GFX Labs
Technical contributors to Uniswap DAO, responsible for developing the contracts on the target chain.
Frontend: Oku
Users can interact with the new Uniswap v3 deployment on the initial frontend.
Oku received grants from the Uniswap Foundation in 2022 to host alternative UIs, and the DAO’s New chain onboarding package revolves around Oku.
Polkadot OpenGov
Funding the deployment cost of the Uniswap V3 contracts and the UI maintenance.
Liquidity Bootstrapping
DAOplomats is authoring a treasury proposal to the Uniswap DAO to allocate UNI tokens to incentivise liquidity after the deployment on the Asset Hub. The proposal falls under Uniswap's standard Onboarding package.
Liquidity and Pools
wETH-DOT
DOT-vDOT
DOT-USDt
Uniswap’s Onboarding Package
The Uniswap onboarding package aims to incentivise new V3 deployments, allowing them to gain momentum and receive initial liquidity from the community.
Criteria for Package Adoption
After the 7-day RFC of the deployment proposal concludes, a temperature check will be posted to the Uniswap DAO via Snapshot. This off-chain vote will determine how much incentives the Uniswap DAO would like to allocate to this deployment.
The options are:
$250k
$500k
$750k
$1M
No Incentives
Incentives matching
Most of the deployments of Uniswap, who got the onboarding package, were accompanied by incentives matching from the foundations/entities behind the chain. Since the proposal is coming from the DAO, the DAO should consider an incentive programme for the deployment.
Example of incentives matching
- Lisk uni swap deployment
- Manta Network for 250,000 USD matching
- Mantel Network incentives
- Taiko matching for 250,000 USD.
Asset Hub Liquidity Bootstrapping:
For the PolkaVM upgrade to be successful, the treasury should provide liquidity to the Asset Hub Dapps. DAOplomats are in the process of authoring such a proposal.
Disclosure
DAOplomats are not compensated for coordinating this engagement. We are, however, part of the Uniswap DAO’s delegate incentives programme, which compensates for our engagement in governance at the Uniswap DAO.
Comments (2)
Uni V3 on Asset Hub is undeniably a good thing and the amount requested is not huge.
But the proposal should be clearer on what the funds are for (requiring reading a linked Google doc is OK for delving into line items but it seems we need to look there, and in the forum, for even the basics).
Even looking in the links, it's unclear to me why GFX labs charges $45k for deploying contracts. It's not expensive to do, they're being cloned not rewritten, the liquidity is a different funding question, and interacting with the Uni DAO is neither necessary (for us in Polkadot), nor is it $45k of work, nor is it something that should be funded by Polkadot (IMHO, seems appropriate for Uni to fund it).
I'm not suggesting this is grift — I'm 90% sure that there is something I must have missed (something that probably seems obvious to the proposer)— but... if it's not obvious to me reading the proposal, then you should probably update the propoosal to make it clearer why these depoyment costs are $45k.
There appear to be 2 or 3 options in the forum discussion and it appears that 1 was chosen. You should probably reference and summarise those options and the choice here too.
Kudos for your disclosure statement, BTW — I wish more proposers would be as diligent ;)
Thank you, Baer & DAOplomats, for creating this proposal.
For a little more context, Oku launched in July 2023 and has since become the default Uniswap v3 interface for new chain deployments. Our team, GFX Labs, developed Oku after receiving a Uniswap Foundation (UF) grant to close the UX gap between centralized and decentralized trading applications.
In addition, we've been focused on expanding Uniswap v3 to new chains so the DAO can establish early relationships rather than trying to join a chain well after launch.
Oku supports 22 chains today, and we have deployed virtually all the new Uniswap v3 deployments in the last year, including the Base and Binance Smart Chain deployments.
Our team of 17 is focused on building the best DeFi platform across the space.
For readers unfamiliar with Oku, in addition to offering a robust Uniswap v3 experience, we also integrate eight order routing systems and eleven bridges to ensure users can always find the best route. We recently launched our on/off-ramp that supports US dollars and Euros globally. Oku also built a limit order system directly on top of Uniswap v3, so along with each deployment, we can offer a trustless limit order system.
Over the coming months, we will be launching several major features that we expect existing DeFi and traditional CEX users to enjoy.
In the meantime, if anyone has questions or comments, please feel free to reply here or reach out to us on Discord.