Uniswap launched its L2 mainnet yesterday, almost four months after it was first announced.
Unichain, despite its name is an L2 general-purpose rollup. The chain has been used by at least 12 applications, such as Euler, Renzo and Morpho.
It’s just another L2. What makes Unichain different?
Unichain’s finality is 200-250 microseconds faster than Ethereum’s block time (12 seconds) or the block times of most OP stack chain chains (2 seconds).
Unichain was designed to be a rollup of Stage 1 right from the start. It means that a fault-proof system without permission has been implemented, allowing anyone to independently verify and challenge transactions.
Unichain, when it was announced in late 2017, threatened to exacerbate ETH value’s accrual problems. Why? Uniswap continues to be one of Ethereum L1’s largest gas guzzlers, which leads to a greater burn rate for ETH i.e. a value accrual.
It is likely that many v2 users and v3 customers will take their time to migrate. Users tend to stick around. Uniswap v3 is set to be live for the fourth year in May, but its v2 deployment enjoys a strong moat ($1.5bn TVL) of liquidity.
Even switching frontends is likely to cause friction.
Peter Thiel once said, “Customers will accept switching costs as long as the innovation in products is at least a 10-fold upgrade over existing options and not merely incremental improvements.”
Has Unichain, L2’s rollup, offered that 10 fold improvement? Not sure. Maybe Uniswap v4 hooks, but v4 has already been live for eight chains.
Unichain token holders would be pleased if the vast majority of liquidity, and therefore users, migrated to Unichain.
Last week, Uniswap Foundation released a structure for revenue sharing that will allocate 65% net chain revenues to stakeholders and validators of the Unichain Validation Network.
This development is important.
Since years, UNI holders have complained about the low value of their tokens. The UNI airdrop is a “last resort” Move that helped to prevent the SushiSwap vampire attacks in 2020.
It worked. Uniswap reestablished its position as the number one DEX. UNI was a meme coin with little or no cash flow.
Felipe Montealegre from Theia Research compared UNI’s treatments to a “second class citizen” Comparing Uniswap Labs Equity
The UNI Fee Switch is here. What kind of cashflow should UNI stakeholders expect?
Blockworks Research analysts Luke Leasure, Daniel Shapiro and I were told that Blockworks Research’s net revenues ranged from 16 to 33 million dollars per year.
“Estimating the fees and APY that will accrue to UNI stakers on Unichain’s UVN requires a few assumptions. Firstly, the 65% of net earnings that accrues to the UVN are a function of base fees, priority fees and MEV paid to transact on the L2, less the expenses of posting data to the L1 and the Optimism Collective’s take rate on gross and net chain revenue. With this, the Base L2 may be the most appropriate comparison to estimate Unichain’s financials,” Shapiro & Leasure stated.
“DEX activity is the largest driver of fees by a significant margin. Over the trailing 30 days, Uniswap did ~$100b in trading volumes, whereas Base is around $50b with around $100m in annualized net revenue. Assuming Unchain captures 9-25% of Uniswap’s volume, this would put Unchain L2 activity at 25% to 50% the activity of Base.”
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