Deploying Uniswap v3 contracts to PVM

Ecosystem
1

Tl;dr

We are considering potentially deploying Uniswap contracts on Polkadot AssetHub’s PVM (PolkaVM), and need community input. Through early discussions, two possible pathways have emerged for this deployment:

  1. Polkadot DAO-led Deployment: Polkadot DAO manages the entire process, including setting up alternative UIs, covering deployment costs, and leading liquidity bootstrapping efforts.
  2. OpenGov-Led Liquidity Bootstrapping: OpenGov provides liquidity bootstrapping, while Uniswap DAO covers deployment costs (through a Request for Proposal - RFP) and uses GFX Labs’ UI.

Introduction

DotSama Asset Hubs will receive the PolkaVM upgrade in the coming months. From Referendum #885, Parity will only provide the essential tools, leaving it to the broader community to handle additional coordination and execution. This upgrade’s success relies on effective community collaboration and flawless execution.

As recognised delegates of Uniswap DAO, we have been actively engaging with Uniswap DAO stakeholders to possibly deploy the Uniswap V3 Core contracts to the Polkadot Asset hub. The Polkadot ecosystem has previously engaged with the Uniswap community through Moonbeam for a successful deployment of the Uniswap V3 contracts. Building on that foundation and with the feedback from the Uniswap DAO stakeholders, we want to present two potential pathways for this deployment, both offering distant benefits.

Option 1: Standard Contract Deployment Process.

Under this option, Polkadot and Opengov shall follow Uniswap’s standard contract deployment process, which involves submitting an RFC for contract deployment to UniswapDAO. The proposer is responsible for finding a contract deployer and UI to access the contracts. This option is ideal to set up our infrastructure and DEX UI.

L2, like Zora and Redstone, went with this route, collaborating with Protofire to deploy the v3 contracts. Redstone also hosted its front end.

GFX labs, which received grants for contract deployment and UI hosting, charges 45,000 USD for the contract deployment and 5,000 USD/month for hosting the UI.

Advantages: Polkadot will maintain complete control over the engagement specifications. This option is also easy to get approved by the Uniswap DAO due to the relatively low risk it takes.

The DeFi bounty from Velocity Labs could cover the deployment cost (?).

Disadvantages: Polkadot will have to hire a service provider and host the UI, and further costs will be incurred for liquidity bootstrapping and TVL.

Option 2: Joint collab Between Polkadot Opengov and Uniswap DAO

Another option we have seen played out in the Uniswap DAO is the possibility of a collaboration. This approach is more streamlined and cost-effective. In this approach, Uniswap could cover the initial setup cost and run the UI (for 12 months) for 105,000 USD.

Polkadot DAO should, in return, commit to providing TVL from day 1 for six months for the deployed contracts and set up a minimum number of pools. Uniswap DAO recently approved a similar proposal from the X chain for a 1 million USD liquidity bootstrapping deal. In our opinion, we should probably commit to a similar amount of liquidity bootstrapping, too.

For UI and deployment, the option will be to use the DAO-approved GFX labs and its UI.

This option will enable close collaboration between Uniswap DAO and Polkadot. Existing dexes like Stellar Swap could easily leverage the liquidity deployment and bootstrap.

Disclosure

DAOplomats are not compensated for coordinating this engagement. We are, however, part of the Uniswap DAO’s delegate incentives programme, which compensates for our engagement in governance at the Uniswap DAO.

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Hi @Baer_DAOplomats
Thank you for posting this discussion here on the forum and presenting your proposal on the AAG show. This is definitely an interesting proposal.
I`m not sure how you are familiar with Polkadot, but one of the biggest issues in the Polkadot Eco-system is the lack of liquidity.
I guess that Option 2 is much more suitable for Polkadot Eco. Because having the pool without the liquidity with a high % of slippage will definitely not help anyone.

However, i`m not quite sure about the amount of Liquidity that Polkadot should provide.
Can you please provide more information:

  • on how this liquidity will be used,
  • what pools will be launched and who will decide this?
  • what happens after 12 months and what will be the costs for Polkadot?
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Thanks for inputs @ImdioR.
We are responsible for presenting all the available options as they are so that the community can make an educated guess, and we don’t want to decide on the community’s behalf.

Yeah 100% true. There is yet no natural and easy way to get DOT on the Polkadot chains. I think the lack of liquidity was/is mainly because of Polkadot’s connectivity with other chains. Snow bridge took years, and we shared too early; thus, the liquidity is divided into multiple para chains.

It will be much easier now to present all the DOT-KSM-governed chains as a “single unite.” and tap into the existing high liquidity sources. We are working to get Polkadot to current Bridge aggregators in the EVM so that it will be easier for users to bridge. That still means we must run routers and resolvers to facilitate these bridges and trades.

Uniswap has three different pool structures based on fees (0.05%, 0.30%, and 1%).
I think it is good to have
DOT-USDc/t
vDOT-DOT
wETH-ETH (we need to source wETH)

on how this liquidity will be used—with concentrated liquidity, we can more easily manage and build strategies to use it effectively. I would deploy a pie in full range and concentrate the further along the price.

DAOplomats can do this, but it should be considered a separate service and not part of this proposal, as it requires more resources than cross-community coordination.

Uniswap/GFX (OKU) bets that the deployment will be profitable and significant enough to justify its continued maintenance; I could imagine that Opengov will continue to maintain the front end further. Other AH DEX UIs would also take over the de facto UI.

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Feedback from the AAG: Liquidity, Liquidity, Liquidity
@BCpowerup : It is good to have the Uni deployment considerably, especially considering the brand.
@ThePhunky1: The slippage in the current AH DEX is very high. We need more liquidity. For this reason, Hydration is the go-to option for many.
@Leemo : (Bearish on DEX on AH): need a comparison on the slippage of V3 and Hydradex. It would also be good to integrate this directly into the Uniswap website as an easy bridge.

I had a sip of mouth in AAG, where I said Uniswap is happy to support option 1, but as mentioned in the thread above, we should follow the regular proposal process and cover the deployment fees. UniswapDAO will only make a cross-chain deployment call through the vote, add the deployment to the V3 core registry/ ENS subdomain, and make it official.

And a clarification: under no options can it be guaranteed that the deployment will be under Uniswap Labs owned UI but will be hosted on the Uniswap DAO approved GFX labs’ Oku frond-end.

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Hi everyone,

We’re a bit confused about the meaning of the “ETH/wETH” pair and would appreciate some clarification.

From our understanding, Snowbridge allows for pegged ETH IOUs (maybe only wrapped ETH, but doesn’t matter) on Asset Hub via a “lock and mint” mechanism. However, we’re struggling to see the incentive for bridging ETH to Asset Hub. Is the goal to provide liquidity for bridging out of Asset Hub, possibly adding a premium on the exchange rate via concentrated liquidity (assuming an Asset Hub-ETH/DOT pair)?

Thanks in advance for any insights!

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The Bridged ERC20 tokens from Snow Bridge are registered in the ForeignAssets pallet on Assethub. If we don’t have any pools to swap wETH to DOT, the new users coming from Ethereum will be stuck and have to rely on a CEX to get their DOT, making the bridge usage insignificant. However, this pool allows the resolvers of intent-based bridges to fulfil the request quickly and enable bridging to DOT.

I would rather incentive bridging stablecoins to the Assethub to kick start the DeFi activities, which vDOT or DOT can then support.

7

What are the options to have a full deployment under Uniswap Labs (UI with BE and smart contracts)?

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