Total Volume + Fees
This week trading volume jumped significantly, ignited by a series of airdrops and revenue-sharing initiatives. In the past few days we saw a notable surge in volume for some newcomers and some established coins experiencing a surge.
WETH/STRK
StarkNet is ZK flavored roll-up and since its airdrop has seen significant trading generating $497,714 in the past 7 days.
WETH/UNI
Uniswap's latest proposal (yes just a proposal!) has skyrockted it's volume in the past 24 hours.
While the UNI pool generated $419,079.50 from just 3,143 trades.
WETH/WLD
WorldCoin is now synonymous with one of its founders Sam Altman. If he wins WLD goes up. Just wait till he raises 7 trillion. WLD pool did 3,697 trades in the past 7 days and generated $146,685
and WETH/PANDORA still reigns on top this week at $1,106,486 generated in LP fees.
Uniswap Fee Proposal & effects on LPs.
Uniswap Foundation just announced its most recent snapshot vote for a mighty significant change in the protocol for Uniswap V3. Just the submission of the snapshot proposal sent the UNI price up by > 70%, a 4 Billion dollar pump! Not just that but nearly all large Defi protocols/apps are significantly up after the announcement of this proposal.
If the proposal and the subsequent DAO vote pass; the Uniswap protocol is set to activate the highly anticipated "fee switch" for UNI token holders who stake and delegate their tokens (on Uniswap V3)
We did see a lot of insiders pulling their WETH/UNI liquidity and buying $UNI before the submission of the proposal.
$UNI holders and investors are thrilled, but the impact on liquidity providers (LPs) remains uncertain. Although the proposal claims the protocol fee is vital for success, LPs may be displeased with reduced fees.
However, AMMs where LPs share fees with token holders are already in use by many DEXes. Furthermore, revenue sharing with token holders in the current hostile environment is being appreciated.
There are some questions regarding whether all of this is also...legal
Some critics are arguing that "you can now value $UNI on earnings instead of 'hopium' limitless future potential".
We doubt that would be the case since the governance tokens fees would be realistically a fraction (about 1/10th) of the total fees and many crypto natives are looking for fees better than that, the fees are just a cherry on top.
I’m sure some boomer stocks have a higher dividend income than this
2
The 10% statistic is derived from a Gauntlet research project conducted in January, which examined the impact of a uniform 10% fee on Liquidity Providers (LPs) regarding governance token fees. Their findings were bullish in favor of the fee, and the resulting loss in volume was a loss of mostly toxic flow, but that comes along with a ~10% loss in liquidity for pools aswell.
The DAO is scheduled to cast their votes on March 7th, contingent upon the outcome of the preliminary snapshot vote and other prerequisites. This may cause significant developments for the UNI token soon.
The fate of LPs, half of whom are reportedly already at a loss, will be decided at this juncture. Yet, with the introduction of V4, the narrative around governance fees shifts dramatically, offering LPs greater influence over fee structures. Even considering the governance fee for UNI holders, LPing with V4 could be a much better offering for LPs.
In-fact, this might be the catalyst that convinces LPs to migrate liquidity to V4 since optimally;
V4 LP profits - Governance fees > V3 LP profits - Governance fees.
Top Pools of the Week
High-Risk
PNDC/ETH in the high risk pairs category for the ones feeling adventurous.
PNDC is an exchange that rewards it's users with fees. Given that the Defi ecosystem is gaining massive traction in any company that adds a points or dividend system, PNDC seems like a bullish LP bet.
Low-Risk
At its current rate PANDORA will keep the TVL(Volume) throne for a while and is a good candidate to LP in.
Safe
WBTC/USDT & WBTC/ETH for the safe paddlers.
Its rough waters out there right now. There are massive wins and equally big losses too. Safe bets with BTC, stable coins and a long term strategy even in the middle this bull run would be good choice for the masses.
Equally important are pools such as $UNI and other DEFI protocols that may end up employing a similar strategy in order to appreciate the market value of their tokens.
That's all for this week.
Happy fee farming!
Let us know in the reply to this email if you think the Uniswap protocol fee is a revolutionary new era for Defi,DAOs and revenue sharing or is it a cash grab by whales and VCs?