Uniswap's UNI Instantly Becomes One of DeFi's Most Widely Held Tokens
Thousands of DeFi traders just got airdropped about $1k.
|Sep 17, 2020||11||1|
Hello Defiers! Of course, the big news today is the launch of Uniswap’s UNI token.
DeFi’s largest DEX, the Etheruem dapp that’s processing more fees than Bitcoin itself, and the first decentralized exchange to beat a major centralized counterpart in daily volume, today airdropped 400 UNI directly into the wallets of anyone who had interacted with the protocol at any time, no matter the size of the transaction. More than 50k addresses are holding UNI less than a day after launch, already higher than addresses holding MKR and COMP. With the move, Uniswap proved this retroactive airdrop model can result in decentralized ownership, and provided the DeFi community with a taste of what universal basic income feels like as most in the space woke up with (at least) an additional ~$1k in their wallets.
The open economy is taking over the old one. Subscribe to keep up with this revolution. Click here to pay with DAI (for 70 Dai/yr vs $100/yr).
Check out the just-released video on The Defiant’s YouTube channel! The amazing story of SushiSwap. The video was produced in partnership with Robin Schmidt of Harmony Protocol.
🙌 Together with Zerion, a simple interface to access and use decentralized finance, Perpetual Protocol, which provides decentralized perpetual contracts for any asset, and HackAtom V, a two-week virtual hackathon organized by Cosmos.
UNI Instantly Becomes DeFi’s Third Most Decentralized Token Less than 24hrs After Launch
Uniswap dropped the mic with the surprise launch of its native governance token - UNI.
Uniswap, the leading DeFi DEX averaging more than $350M in daily volume over the past month, airdropped 15% of the total 1 billion UNI minted at genesis, to anyone who had ever interacted with the protocol since its inception.
UNI is now held by more than 50k Ethereum addresses, making it instantly one of the most decentralized tokens in DeFi, only trailing Dai and LEND among the top 10 by market cap, according to Etherscan.
Uniswap has become a cornerstone of DeFi, the basic building block for other dapps and likely the first DEX most newcomers use, and all of them today are waking up with an extra $1.2k in UNI in their wallets, in a move that feels similar to a DeFi stimulus check or to a universal basic income, at least in this niche within crypto. Each trader who used Uniswap V1 or V2 received 400 UNI, currently valued at around $1,200, regardless of the historical volume transacted.
For historical liquidity providers, that bounty was even sweeter. Uniswap made sure to track liquidity from inception, meaning the earliest LPs stood to earn a larger portion of rewards for their early commitments. For the 220 traders holding at least 1 $SOCKS, or community-favorite tokenized Uniswap merch, 1000 UNI was (not so) quietly available for claim yesterday evening.
Here’s how the tokens are split among three distinct user groups:
Historical Liquidity Providers - ~49k addresses (4.92%)
Uniswap Traders - ~251k addresses (10.06%)
$SOCKS Holders - 220 holders (0.02%)
UNI is shaping up to be DeFi’s biggest token launch to date, with gas prices soaring to over 500 gwei per transaction, the highest it’s ever been in recorded history. Both Binance and Coinbase Pro listed UNI in under 4 hours, the fastest listing of any token on Coinbase.
The UNI/ETH pool has already aggregated nearly $500k in trading fees, putting it on par to have the highest 24h volume of any Uniswap pair to date.
The UNI airdrop precedes a liquidity mining campaign set to go live Sept. 18 at 12:00am UTC. Of the 1B total genesis supply, 5M UNI will be allocated to the USDT, USDC, DAI and WBTC pools over the next two months. Users can provide liquidity and stake their positions via the new UNI mining dashboard to earn a pro-rata claim of the 54 UNI allocated to each pool per block.
A community treasury will retain 43% of the supply to be allocated for future incentives including contributor grants, community initiatives, and liquidity mining, as seen fit by governance. Here’s how the rest of the supply breaks down.
The 1 billion UNI supply will be put in circulation over the next four years, with 60% going to users, 21.51% to team members and future employees, 17.80% to investors and .069% to advisors. Team, investor and advisor tokens are subject to four-year continuous lockups, meaning their positions become liquid in real-time.
After the four-year genesis supply is distributed, a perpetual inflation rate of 2% will start, to incentivize participation in the protocol over passive ownership.
More than an Airdrop
The stories underpinning the airdrop is what makes this launch truly unique. From children testing Ethereum for the first time to marginalized individuals in third world countries receiving enough token to feed their families for months, this global wealth distribution event is one which shuts down all indicators that DeFi has lost its way.
Alexis Gauba @AlexisGauba5/ She used @UniswapExchange 🦄 to get some @MakerDAO Dai to make her coins stable since she didn’t want to lose her free money (was super straightforward!) ✅
VC Backed Narrative
UNI comes in the wake of a rising narrative which painted VC-backed projects as misaligned with their communities, while fully community-owned projects were hailed as the new gold standard. In this context, Uniswap was criticized for raising $11M in its latest round from big Silicon Valley funds and SushiSwap leveraged this sentiment to fork the project and try to lure away liquidity providers with its SUSHI token.
UNI’s rollout following the vampire mining attack from SushiSwap shows that the most well-respected team in DeFi can pack a punch and that “VC-backed=bad” was a gross oversimplification.
Path to Decentralization
If DeFi teams can learn anything, retroactive incentives to value-added actors is a clear path to decentralization. While it was widely speculated that Uniswap would launch a token, the timing and distribution mechanics were unknown, which means nobody could prepare for the drop, a fact that has been met with high praise in the DeFi community.
Best shown by the price of UNI, the token given away for free is now trading at $3, up 300% from its first liquid market price of $1.
UNI holders will have the power to govern key protocol decisions from day one, except for control over the treasury, which will be delayed until October 17. One change UNI holders are likely to consider is to turn on Uniswap V2’s 0.05% protocol fee (which is now disabled), good for ~1/5th of the protocols $438M project annualized revenue according to Token Terminal following a 180 day timelock.
While it’s still early days for UNI, it's safe to say that food coins just got served.
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.
About the founder: I’m Camila Russo, author of The Infinite Machine, the first book on the history of Ethereum. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.