Chainfeeds Summary:
In 2022, Dan Elitzer wrote that Unichain is inevitable due to the inefficiency and value leakage of the existing Uniswap system. Today, this prediction has become a reality, as Uniswap has announced the launch of its Layer 2, named Unichain, aimed at addressing key challenges in the DeFi ecosystem.
Source:
https://4pillars.io/en/opinions/unichain-was-inevitable
Authors:
Heechang, Eren
Perspectives:
Four Pillars: Dan's argument on the necessity of Unichain: Unichain can help reduce the inefficiency of value capture due to transaction fees and MEV costs, and increase the value for UNI holders. Running its own chain will allow Uniswap to significantly reduce transaction fees, especially beneficial for small transactions. Additionally, solutions such as threshold encryption or batch swaps can minimize traders' MEV costs. The most significant advantage of Unichain is better incentive coordination among Uniswap participants. Currently, UNI token holders' value capture options are limited, mainly confined to governance decisions such as adjusting swap fees. A dedicated chain will enable UNI holders to benefit from transaction fees and internalized MEV, thereby enhancing the token's value proposition. This approach not only rewards UNI holders but also creates a more efficient trading platform for users, solidifying Uniswap's position as the leading DEX.
Pantera's Mason Nystrom's insights on Unichain and its significance: - Token value accrual: UNI evolves from a governance token to a fee-accruing token. Validators with the highest UNI staked are rewarded for verifying the network and collecting fees. - Unichain supports the "fat app" thesis: Apps create their own chains to achieve economic control and block space management. The Uniswap chain will collect fees from various transactions, such as swaps, lending, and perpetuals. - Internalized MEV: Unichain's verifiable block construction and "flashblock" ordering show promise. Apps are exploring internalizing MEV or redistributing it to users and stakers. - Unichain and Ethereum: Unichain may have a significant impact on the Ethereum mainnet. Attracted by UNI staking ordering fees and improved user pricing, DeFi activity may shift to Unichain. - Vertical integration: Larger apps are incentivized to control the entire stack - from the application (Uniswap wallet, frontend + Uniswap X) and protocols (Uniswap V4, V3, V2) to the chain (Unichain).
Syncracy Capital's Ryan Watkins: Ryan Watkins believes we are entering an era of blockchain application diversification, with many revenue-generating and fast-growing apps on platforms like Ethereum and Solana. However, the value of these apps is still underestimated compared to the underlying blockchain infrastructure. There is a trend where the share of blockchain fees earned by apps is growing, even surpassing that of infrastructure assets, which may mark a turning point in blockchain development. The rise of "fat apps" represents a shift towards enhanced application autonomy, driven by the need for better scalability, improved user experience, and greater economic control relative to the underlying infrastructure. With the advancement of chain abstraction and smart wallets, this application-centric approach is expected to become more seamless, potentially reshaping the distribution and control of value within the blockchain ecosystem.
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