As a seasoned crypto investor with years of experience navigating the volatile and ever-evolving blockchain landscape, I find the development of Uniswap’s new layer 2 blockchain, Unichain, to be an intriguing proposition. Having witnessed the meteoric rise and fall of numerous projects in this space, it is always refreshing to see a well-established player like Uniswap making strategic moves to improve their ecosystem.
Uniswap Lab’s fresh layer 2 blockchain, Unichain, might significantly benefit them and the holders of their project’s token. This new setup could potentially generate around $500 million annually in fees that would have otherwise gone to the Ethereum network.
According to Michael Nadeau, the founder of DeFi Report, if Unichain launches, approximately $368 million that was distributed to Ethereum validators over the past year will now be directed towards Uniswap Labs and potentially the holders of the Uniswap (UNI) token. This information was shared in a post on October 13th.
In simpler terms, since Uniswap Labs controls all the validators in the Unchain network, they can seize all Maximum Extractable Value (MEV) rather than letting validators on the Ethereum network reap such value by exploiting it.
According to Nadeau, MEV (Minimum Viable Extractable Value) is roughly 10% of the total fees collected on Uniswap in the past year, which amounts to approximately $100 million. He also mentioned that they have the possibility to distribute some of this revenue to token holders.
He mentioned that Uniswap’s liquidity providers might also gain advantages from the fresh blockchain by having an opportunity to engage in settlement and MEV extraction via staking.
According to Nadeau’s statement, those who validate Ethereum transactions as validators and those holding Ether tokens stand to lose the most after the launch of Unichain. This is because there will be less Ether being burned and fewer transaction fees returning to the Ethereum blockchain.
Over the past twelve months, the decentralized exchange platform Uniswap has amassed more than 1 billion dollars in transaction and processing charges from trades conducted on five main networks: Ethereum, Optimism, Binance Smart Chain, xDai (Base), and Polygon.
As a researcher, I’m excited to share that Uniswap, the leading decentralized exchange in terms of trading volume, unveiled Unichain on October 10th. The goal? To deliver faster, more affordable transactions and enhance interoperability between multiple blockchain networks, making cross-network interactions smoother than ever.
The launch drew a range of reactions from experts in Decentralized Finance (DeFi), with some arguing that adding another layer 2 blockchain was not essential.
Supporters claim that Unichain, marketed as a unique layer-2 network designed specifically for Decentralized Finance (DeFi) applications, promises to deliver a smoother user experience for the average DeFi user, increased liquidity in a more focused manner, and fewer complications associated with fragmentation across multiple blockchains.
Meanwhile, skeptics found a September 2022 X post from Ethereum co-founder Vitalik Buterin which criticized the idea of a layer 2 blockchain from Uniswap.
As an analyst, I’d rephrase this as follows: “In his post, Vitalik Buterin emphasized that Uniswap’s key advantage lies in its ability to execute trades swiftly – within mere seconds without requiring much thought. The concept of a Uniswap chain or even a rollup on its own seems misplaced given this context. Instead, having a replica of Uniswap on every rollup could be more fitting.
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2024-10-14 04:48