DEFIDEVELOPMENT

【Dapp Pocket】DeFi Weekly Report - Week 4 of September: Uniswap Returns as King, but How Will DeFi Continue to Combat Forks?

share
【Dapp Pocket】DeFi Weekly Report - Week 4 of September: Uniswap Returns as King, but How Will DeFi Continue to Combat Forks?

Dear DeFi enthusiasts,

This week, Uniswap announced the issuance of its governance token UNI! They generously distributed 400 UNI to all existing users, bringing Uniswap's total locked value to a new high of 1.8 billion. In addition, discussions arose regarding its governance model, where 1% of UNI is required to initiate governance proposals. Another AMM project, Curve, which faced threats of forking, retaliated against Swerve by imposing governance fees. This week, we will discuss how DeFi should face this rampant forking storm.

In our featured perspectives this week, we see Anthony Sassano of Set offering a fresh interpretation of DeFi airdrops; Ryan Adams of Bankless once again highlighting the differences between DeFi projects and traditional tech companies; and our revered Andre Cronje urging everyone not to let their UNI governance rights go to waste and to authorize him to participate in governance on your behalf!

Advertisement - Please scroll down for more content

Uniswap Returns to the Throne, But How Will DeFi Continue to Fight Forks?

Uniswap vs. SushiSwap

With the introduction of a new governance model and governance token UNI by Uniswap, it not only reclaimed the spotlight from the Fork project SushiSwap, but also saw the price of UNI nearly triple within 48 hours of the airdrop. Most importantly, Uniswap's total value locked quickly surged back to the top in DeFi/DEX, bringing justice, originality, and a spirit of victory back to the DeFi community. However, we cannot consider token airdrops as the solution to Forks, as Fork projects will continue to occur, especially in open-source blockchain environments.

How Should We View Forks

In traditional business, copying and appropriation are common. For example, Samsung referencing Apple's smartphones, or Instagram copying Snapchat's stories feature. In the open-source DeFi environment, copying becomes even easier, where one can simply Ctrl+C/V to replicate the efforts of world-class engineers. We might even wonder why the SushiSwap incident took this long to happen. With Sushi leading the way, we can imagine that "Fork resistance" will be a crucial aspect of future DeFi project development. We cannot expect new projects to always be prepared to combat future Fork crises with token airdrops.

How DeFi Projects Can Achieve "Fork Resistance"

Internal Solutions

The biggest harm that Forks can cause to projects may include: 1. Taking away users and liquidity 2. Being ahead in integrating with major platforms 3. Optimizing the Fork version to attract specific user groups, and more. Mechanisms to prevent Forks in program and service design may include: enhancing community experience to increase stickiness, building a reputable team, integrating with real-world projects to increase the difficulty of Forks, and more. If Forks are truly unavoidable, then why not consider giving Fork projects incentives to proactively integrate with the original project in the code? For example, sharing Total Value Locked (TVL), redirecting Fork project profits back to the original project, etc., which could make the project stronger even if it gets Forked in the future!

External Solutions

In fact, Forks on the blockchain are similar to intellectual property infringement in the real world, but there are no mechanisms to restrict them on Ethereum — at least not yet. Could there be mechanisms in the future? We speculate that since projects can govern through token governance, can the blockchain itself also be governed? With Ethereum moving towards a PoS mechanism where staking ETH allows mining, could staking also grant voting rights and decide whether to allow Forked projects to continue, or impose penalties like doubling transaction fees on them? Or perhaps more idealistically — embedding copyright protection rules into the blockchain? Automatically detecting smart contracts with excessively high redundancy and increasing deployment thresholds or requiring more information for deployment, etc. Of course, these rules can be decided and adjusted through voting.

Conclusion

The above are our speculations and suggestions for the future development of blockchain. Returning to the present, open-source remains a characteristic and tradition of the DeFi and blockchain ecosystem, enabling developers to integrate and progress more easily. However, SushiSwap has shown the risks associated with being Forked to the community. We believe that DeFi projects must consider Forks as a new normal and incorporate "Fork resistance" from the start, while blockchain must develop more on-chain governance mechanisms to protect developers.

References

https://synthesis.substack.com/p/fast-follower-forks-in-defi

II. This Week's Highlights

✨ Headlines of the Week

Uniswap Releases Governance Token UNI with Initial Supply of 1 Billion

The decentralized exchange Uniswap has now released the governance token UNI. The initial supply of UNI is 1 billion, with 60% allocated to the Uniswap community members, 21.51% to the team, 17.80% to investors, and 0.69% to advisors. 15% of the total supply has been airdropped to users and liquidity providers, with each receiving 400 UNI.

Uniswap Announces Governance Parameters and Rights of UNI Holders

The Uniswap governance protocol is now in effect, and UNI holders have governance rights including Uniswap governance, control over the UNI community treasury, protocol fee conversion, and more. Governance parameters include: holders of over 1% of UNI can propose improvements, each proposal requires over 4% approval votes to pass, proposals last for seven days, and more.

Andre Cronje Initiates Fundraising for Uniswap Governance

Since governance parameters require holding 1% or 10 million UNI to propose improvements, yearn founder Andre Cronje has launched his fundraising plan on yuni.finance, hoping that if you HODL UNI and are not planning to sell or participate in governance, you can transfer your governance rights to him without locking them up, allowing you to withdraw UNI at any time.

Curve Introduces Governance Administrative Fee, Outshining Clone Protocol Swerve

To increase governance participation, the decentralized stablecoin exchange platform Curve has begun distributing governance administrative fees starting today, allocating 50% of the original 0.04% trading fee to holders of veCRV with governance participation rights. CRV holders can lock CRV on the DAO page to gain governance voting rights veCRV.

🚀 DeFi Protocols

🏛 Stablecoins

👫 Cross-chain

💰 Financing

III. Insights from Leaders

Anthony Sassano Set Protocol: DeFi airdrops are like giving universal basic income to those who don't need it

Ryan Sean Adams Bankless: Google doesn't issue GOOG to searchers; Amazon doesn't issue AMZN to book buyers; but Uniswap issues UNI to users

Andre Cronje Yearn Finance: If you don't plan to sell UNI and don't want to participate in governance, let me be your proxy

IV. Data Statistics

This week's data covers the period from 9/15 to 9/21. TVL (Total Value Locked) indicates how much value (in USD) is stored on the platform; IPY (Interest Per Year) is the current lent funds * annual interest rate, i.e., the platform's annual interest income. Data sources: DeFi Pulse, CoinGecko. (Unit: million USD)

DeFi Overall Metrics

Lending Platform Scale

DEX Scale

V. Memes