I’d like to preface this post by saying I understand very little about Uniswap V3. Because there is not much in terms of specifics here in cost or outcomes I do not feel comfortable voting on this PTIP. I am alarmed however by the security threat presented. I hope we can discuss both the specifics of providing liquidity on V3 - how it will be executed, and managed, the costs, and goals, as well as the security implications if we do not act now.
Let me pretend to be the bad guy. I am looking at Uniswap.org, and it will only let me buy $2 million worth of POOL before it says insufficient liquidity. A 2 million USDC swap for 152,293 POOL which incurs a 84% price impact, and I’d be paying $13.13 per POOL. It doesn’t seem like I can make a governance attack. Maybe I’m not savvy enough?
Some rough numbers
- 10 million total POOL supply
- 5 million POOL in treasury
- 5 million POOL circulating
- 2 million POOL held by team and early investors (as per token launch medium)
- 400k POOL still vested from VC diversification
Being that 2 million + 400k represents half of the circulating supply - Is there risk to the treasury without team/investors selling? With such a wide distribution otherwise it seems to me the concentration of circulating supply in that 2.4 million controls the majority of the risk.
Two other things to note -
- We do still currently have some FEI/POOL liquidity with 258k POOL in the pair
- I’m aware of something drcpu has mentioned a few times - that generally the protocol owning the majority or all of the liquidity is somewhat of an ideology debate.
I think my stance on Olympus PRO was pretty clear - bad deal. My impression is that the FEI deal has not worked out great for us either. I believe that liquidity as a service operates on our very own mantra of “no-loss”, so when there is loss we can expect to take it. To add insult to injury it seems Ondo rebalanced (sold POOL) outside of our verbal agreement. At the same time it’s clear that the token has not been doing well and I personally believe this is most reflective of the traction the protocol has as opposed to any liquidity or tokenomics issue. Never-the-less all issues must be addressed and as we continue to experiment with liquidity solutions it’s clear to me that the implications of them become more serious. I hope we can get this one right.