Uniswap Votes on Extending UNI Liquidity Farms: What’s Next?

Uniswap, the world’s leading decentralized exchange, has conducted a ‘temperature check’ poll to gauge community sentiment on the future of its UNI liquidity farming program, which expired on November 17, 2024. This pivotal decision comes as liquidity on the protocol declines ahead of the closure of its four UNI mining pools.

UNI Liquidity Farming Program Recap

Uniswap’s liquidity mining initiative was launched to:

• Distribute 20 million UNI tokens over two months.
• Reward DeFi farmers across four pools:
  • ETH/USDT
  • ETH/USDC
  • ETH/DAI
  • ETH/WBTC

Each pool received 2.5 million UNI tokens per month, encouraging substantial participation and liquidity.

What is the Temperature Check Poll?

The poll serves as a preliminary community vote to decide whether UNI liquidity farming should continue with modified incentives.

Proposed Next Steps

If the temperature check gains at least 25,000 UNI votes, it will lead to a second formal vote to finalize:

1. Incentive Duration: An additional two months.
2. Reduced Distribution: Incentives will be halved, with 1.25 million UNI tokens per pool per month instead of the original 2.5 million.

Goals of the Proposal

Cooper Turley and Monet Supply, two prominent community members, explained the proposal’s purpose:

• Maintain the status quo of liquidity mining while reducing incentives.
• Allow time for the community to optimize long-term allocation strategies.

“The goal of this proposal is to ‘maintain the status quo,’ using reduced incentives as a means to continue distribution as we look to optimize allocations in the medium term,” said Turley.

Community Sentiment and Voting Results

At the time of reporting:

• 60% of voters support extending liquidity farming with reduced incentives.
• 32% oppose the proposal.
• The outcome indicates strong community interest in continuing UNI distribution to incentivize participation.

Impact on Uniswap Protocol

1. Decline in Liquidity

• Liquidity on Uniswap has already shown signs of decline as the original mining program ended.
• Extending incentives could stabilize liquidity and maintain the protocol’s competitiveness in the DeFi ecosystem.

2. Balancing Rewards and Sustainability

• Halving rewards reduces distribution pressure on UNI while retaining incentives for liquidity providers.
• It ensures Uniswap’s growth and market presence without over-diluting UNI’s value.

What’s Next?

If the temperature check passes:

1. Formal Vote: A second consensus vote will finalize the extended program’s parameters.
2. Implementation: If approved, reduced UNI incentives will be distributed to the four liquidity pools for another two months.

Conclusion

Uniswap’s temperature check poll highlights the importance of community governance in shaping the platform’s future. By proposing reduced incentives for an extended liquidity farming program, the platform aims to balance liquidity stability with UNI token sustainability.

As the vote progresses, Uniswap’s community demonstrates its commitment to fostering innovation while ensuring the protocol’s long-term success.

For more insights on Uniswap governance and DeFi developments, explore our article on DeFi governance trends.