It’s time for Uniswap v3 to launch on @avalancheavax
After consulting with @avalabsofficial, we @UMichBlockchain have released a proposal on the Uni forums describing why this deployment is important
Let’s break down the proposal step by step👇
After consulting with @avalabsofficial, we @UMichBlockchain have released a proposal on the Uni forums describing why this deployment is important
Let’s break down the proposal step by step👇
The urgency behind this proposal is due to the impending license expiration
After April 1st, anyone can legally fork Uni v3 code and use it for commercial purposes
Large chains like Avalanche will see a rapid influx of v3 copycats
This will dilute the market on those chains
After April 1st, anyone can legally fork Uni v3 code and use it for commercial purposes
Large chains like Avalanche will see a rapid influx of v3 copycats
This will dilute the market on those chains
So it’s paramount for Uniswap v3 to get ahead of the competitors by launching on large chains before duplicates arise
On Avalanche specifically, we know that duplicate chains will spring quickly because it already has lots of liquidity ($950M TVL) and innovation (281+ protocols)
On Avalanche specifically, we know that duplicate chains will spring quickly because it already has lots of liquidity ($950M TVL) and innovation (281+ protocols)
One of the reasons for Avalanche’s continual growth is its novel architecture
It is broken into three parts: P-Chain, C-Chain, & X-Chain
This 3-pronged setup optimizes for scalability and interoperability
It is broken into three parts: P-Chain, C-Chain, & X-Chain
This 3-pronged setup optimizes for scalability and interoperability
The three chains compose a consortium of validators called the Primary Network
It is responsible for Avalanche’s security
Plus, the security easily compounds because increasing the # of validators does not sacrifice block time
This allows for higher decentralization over time
It is responsible for Avalanche’s security
Plus, the security easily compounds because increasing the # of validators does not sacrifice block time
This allows for higher decentralization over time
In Q4 2022, Avalanche’s Nakamoto coefficient increased from 30 to 32
This surpass most other L1s
Plus, the chain currently touts a whopping 1,226 validators & over 233M AVAX tokens staked
These are all signs of a robust L1
This surpass most other L1s
Plus, the chain currently touts a whopping 1,226 validators & over 233M AVAX tokens staked
These are all signs of a robust L1
Avalanche also permits high scalability via its ecosystem of subnets
Like Ethereum’s L2s, subnets allow for outsourcing blockspace from the Primary Network to alternative blockchains
As congestion increases on the EVM-compatible C-Chain, projects will create their own subnet
Like Ethereum’s L2s, subnets allow for outsourcing blockspace from the Primary Network to alternative blockchains
As congestion increases on the EVM-compatible C-Chain, projects will create their own subnet
The beauty of subnets is that they enable launching application-specific blockchains w/t full customizability
This grants builders control over their dev stack
All subnets can specify their own execution logic, fee regime, state, networking, and security
This grants builders control over their dev stack
All subnets can specify their own execution logic, fee regime, state, networking, and security
Large protocols that initially relied on the C-Chain are now migrating to their individualized subnets
Notable examples of this are @DeFiKingdoms and @StepApp_
And as more subnets join the network, Avalanche’s security simultaneously increases
Notable examples of this are @DeFiKingdoms and @StepApp_
And as more subnets join the network, Avalanche’s security simultaneously increases
https://twitter.com/DeFiKingdoms/status/1624194786574860292
Avalanche also has a strong user base
Although daily active users remained relatively steady since Summer 2022, average daily transactions increased from ~1M to ~3M
This indicates the emergence of power users
Although daily active users remained relatively steady since Summer 2022, average daily transactions increased from ~1M to ~3M
This indicates the emergence of power users
However, Uniswap would not be without competition
Post deployment, the most fierce competitor on Avalanche for Uni v3 will be Trader Joe
In a single day this week, @traderjoe_xyz saw nearly $100M in volume
Post deployment, the most fierce competitor on Avalanche for Uni v3 will be Trader Joe
In a single day this week, @traderjoe_xyz saw nearly $100M in volume
But this level of activity only illustrates Avalanche’s DeFi market size
Even though Trader Joe v2 is equipped with a concentrated liquidity mechanism comparable to Uni v3, Uniswap has a stronger, more established brand
This allows Uni to attract liquidity from existing DEXs
Even though Trader Joe v2 is equipped with a concentrated liquidity mechanism comparable to Uni v3, Uniswap has a stronger, more established brand
This allows Uni to attract liquidity from existing DEXs
A notable anecdote is when Uni v3 launched on @0xPolygon
After deployment, Uniswap quickly acquired market share from both @QuickswapDEX and @SushiSwap
Although this experiment is yet to be tested on a large alt L1, it is likely that a similar pattern will surface on Avalanche
After deployment, Uniswap quickly acquired market share from both @QuickswapDEX and @SushiSwap
Although this experiment is yet to be tested on a large alt L1, it is likely that a similar pattern will surface on Avalanche
Apart from DeFi activity, Avalanche has also made strides in sectors like gaming, NFTs, and user adoption
Further innovation in each of these categories is enabled by a DEX like Uniswap
And in turn, Uniswap stakeholders will attain value from the protocol’s increased usage
Further innovation in each of these categories is enabled by a DEX like Uniswap
And in turn, Uniswap stakeholders will attain value from the protocol’s increased usage
Avalanche NFT Progression in 2022:
- @opensea launched natively on Avalanche
- NFT Minter app (built on Avalanche) integrated with @Shopify
- @joepegsnft, an NFT marketplace, launched in Q2 2022 and became the most used NFT market on Avalanche (50+ projects onboarded)
- @opensea launched natively on Avalanche
- NFT Minter app (built on Avalanche) integrated with @Shopify
- @joepegsnft, an NFT marketplace, launched in Q2 2022 and became the most used NFT market on Avalanche (50+ projects onboarded)
Avalanche Gaming Progression in 2022:
- Numerous subnets for gaming launched
- @DeFiKingdoms subnet generated 1-2M txn/day in Q4 2022
- @swimmer_network subnet integrated @snakecity_io & @PlayCrabada
- Japanese media company @GREEgames partnered with Avalanche to build games
- Numerous subnets for gaming launched
- @DeFiKingdoms subnet generated 1-2M txn/day in Q4 2022
- @swimmer_network subnet integrated @snakecity_io & @PlayCrabada
- Japanese media company @GREEgames partnered with Avalanche to build games
Avalanche User Adoption in 2022:
- Ava Labs enacted developments for Avalanche's multichain wallet, @coreapp
- Fiat onramps have been added to Core using Coinbase Pay
- Core Web and Mobile released, allowing for seamless navigation of Avalanche's ecosystem
- Ava Labs enacted developments for Avalanche's multichain wallet, @coreapp
- Fiat onramps have been added to Core using Coinbase Pay
- Core Web and Mobile released, allowing for seamless navigation of Avalanche's ecosystem
Now what about the bridge?
How should we address cross-chain messaging?
We propose using LayerZero, an omnichain bridging solution, to facilitate cross-chain message passing between Ethereum and Avalanche
How should we address cross-chain messaging?
We propose using LayerZero, an omnichain bridging solution, to facilitate cross-chain message passing between Ethereum and Avalanche
Although the Uni DAO previously voted to use @wormholecrypto for the BNB Chain deployment
We believe that such a decision should not set a precedent for future bridge selection
We need to try our hand at testing out different, reliable bridges
We believe that such a decision should not set a precedent for future bridge selection
We need to try our hand at testing out different, reliable bridges
https://twitter.com/wormholecrypto/status/1624051141033033729?lang=en
A handful of Uni delegates and tokenholders have also pioneered a new messaging system
Using this setup, cross-chain governance relies not on a single bridge but simultaneously on a handful of bridges
Using this setup, cross-chain governance relies not on a single bridge but simultaneously on a handful of bridges
https://twitter.com/StanfordCrypto/status/1629577192601714689?s=20
Yes, we see the merits of a multi-bridge system
But it may take some time for this approach to garner adoption and be fully vetted
The Uni DAO can decide to opt into a multi-bridge system in the future
But for an agile deployment, we believe that LayerZero is the best solution
But it may take some time for this approach to garner adoption and be fully vetted
The Uni DAO can decide to opt into a multi-bridge system in the future
But for an agile deployment, we believe that LayerZero is the best solution
Another reason for using LayerZero is their existing relationship with Avalanche
The first use case of Omnichain Fungible Token (OFT) transfer has been active for nearly 4 months on Avalanche, enabling a composable, unified liquidity system for BTC
The first use case of Omnichain Fungible Token (OFT) transfer has been active for nearly 4 months on Avalanche, enabling a composable, unified liquidity system for BTC
https://twitter.com/LayerZero_Labs/status/1593305261204463616?s=20
The LayerZero-Avalanche relationship is in part why @LayerZero_Labs has volunteered to take care of the technical deployment of v3 on Avalanche
Again, our goal is for this process to take the path of least resistance due to the timely nature of the proposal
Again, our goal is for this process to take the path of least resistance due to the timely nature of the proposal
But is LayerZero safe to use?
In short, yes.
- LZ is supported by thousands of cross-chain builders w/t over 2k contracts deployed on mainnet
- Has ~700 unique apps
- ~2M total messages
- ~$5B txn volume
- And billions of dollars in TVL
In short, yes.
- LZ is supported by thousands of cross-chain builders w/t over 2k contracts deployed on mainnet
- Has ~700 unique apps
- ~2M total messages
- ~$5B txn volume
- And billions of dollars in TVL
The two main components for LZ messaging are the Oracle and the Relayer
The Oracle sends block headers from the source chain to the destination chain
The Relayer sends txn proofs from the source chain to the destination chain
The Oracle sends block headers from the source chain to the destination chain
The Relayer sends txn proofs from the source chain to the destination chain
The Oracle and Relayer work together to pass messages between chains
But the underlying assumption behind this model is that the two entities don’t collude
If they do, then the entire system falls apart
So what makes sure that they don’t collude?
But the underlying assumption behind this model is that the two entities don’t collude
If they do, then the entire system falls apart
So what makes sure that they don’t collude?
Unlike other bridges, LZ doesn’t pose an economic stake or bond to punish malicious actors via a slashing mechanism
Instead, if the default oracle-relayer configuration is compromised, then there is a reputational backlash for those running the Oracle and Relayer
Instead, if the default oracle-relayer configuration is compromised, then there is a reputational backlash for those running the Oracle and Relayer
With a default configuration, LZ runs the Relayer
And Chainlink runs the Oracle
The Chainlink DON would have to actively collude with the LayerZero Labs Relayer at the same time to enable passing of a malicious message
And Chainlink runs the Oracle
The Chainlink DON would have to actively collude with the LayerZero Labs Relayer at the same time to enable passing of a malicious message
If LZ and Chainlink collude, then both will take an enormous hit to their reputations
This makes the incentive of collusion minimal
Plus, if Uniswap does not want LZ or Chainlink to run either one or both of the Relayer or Oracle, Uniswap can do so itself
This makes the incentive of collusion minimal
Plus, if Uniswap does not want LZ or Chainlink to run either one or both of the Relayer or Oracle, Uniswap can do so itself
LZ code is also set in stone
The smart contracts are not upgradable
This is a big deal since most exploits occur due to bugs in code–not due to malicious actors colluding
And the easiest way to introduce new bugs is to upgrade the baseline code
The smart contracts are not upgradable
This is a big deal since most exploits occur due to bugs in code–not due to malicious actors colluding
And the easiest way to introduce new bugs is to upgrade the baseline code
It’s therefore important for the current code to be pristine
How do we judge code to be bug free?
Audits.
LZ has been audited over 35 times AND reviewed numerous times internally by the @LayerZero_Labs team
How do we judge code to be bug free?
Audits.
LZ has been audited over 35 times AND reviewed numerous times internally by the @LayerZero_Labs team
Plus, LZ’s current track record is very clean
They’re the only major cross-chain messaging protocol with billions in TVL to not be exploited
And as a further safeguard, LZ has the largest live bug bounty program in the industry ($15M)
They’re the only major cross-chain messaging protocol with billions in TVL to not be exploited
And as a further safeguard, LZ has the largest live bug bounty program in the industry ($15M)
https://twitter.com/PrimordialAA/status/1509993139007750147?s=20
So, because of Avalanche’s continual expansion and growing DeFi ecosystem, along with LZ’s robust cross-chain messaging architecture, we believe that it’s finally time for @Uniswap to deploy on Avalanche
https://twitter.com/UMichBlockchain/status/1629279824257638400?s=20
Special thanks to @luigidemeo from Ava Labs & @IreneWu27 from LayerZero Labs for their aid in this proposal
If you’re interested in diving into more threads, check out these chads:
@TheDeFISaint
@rektdiomedes
@Chinchillah_
@jake_pahor
@crypto_linn
@thelearningpill
@DeFiMinty
@arndxt_xo
@0xSalazar
@0xFlips
@0xsurferboy
@0xCrypto_doctor
@_FabianHD
@Slappjakke
@TheDeFISaint
@rektdiomedes
@Chinchillah_
@jake_pahor
@crypto_linn
@thelearningpill
@DeFiMinty
@arndxt_xo
@0xSalazar
@0xFlips
@0xsurferboy
@0xCrypto_doctor
@_FabianHD
@Slappjakke
https://twitter.com/abdullahbumar/status/1629608358842974209?s=20
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