[Proposal] Deployment of Uniswap v3 fork to Gnosis Chain as a Gnosis Ecosystem DEX with concentrated liquidity

Governance
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Summary

0xPlasma Labs propose to deploy the fork of Uniswap v3 to Gnosis Chain and build a separate Gnosis AMM v3 UI, aiming to provide the most advanced DEX for Traders and Protocols on Gnosis Chain.

Abstract

The initial proposal to implement Uniswap v3 on the Gnosis Chain, which received community approval in April 2022, has unfortunately encountered some unexpected issues, particularly regarding bridge infrastructure. Let’s delve into the historical context of this original proposal:

Part 1: Temperature Check - Should Uniswap v3 be deployed to Gnosis Chain? - Temperature Check - Uniswap Governance

Part 2: Continue the Uniswap V3 deployment on Gnosis Chain with different bridge provider - Proposal Discussion - Uniswap Governance

Temperature Check Snapshot: Snapshot

Given the indefinite standstill of the present proposal and its execution, we suggest proceeding with an alternative course of action: establishing Gnosis Chain’s own Automated Market Maker (AMM) featuring concentrated liquidity.

Motivation

The DeFi protocols currently active on the Gnosis Chain require a more capital-efficient DEX with concentrated liquidity. In light of the expiration of the Uniswap v3 license, our team proposes to undertake the full responsibility of deploying, integrating, and developing a new DEX. This initiative aims to offer the Gnosis community, associated protocols, and traders access to the state-of-the-art Automated Market Maker v3. To further optimize user experience, we plan to create a distinct user interface specifically for the Gnosis Chain, which will be hosted on a separate domain.

About 0xPlasma Labs

0xPlasma Labs has built a notable reputation in the DeFi landscape, credited for the multitude of protocols it has designed and subsequently incorporated into the Plasma.Finance platform. 0xPlasma Labs is a team focused on creating a universal platform to unite robust market protocols and provide easy access to services and assets on all EVM blockchains. Plasma.Finance is designed to simplify the DeFi market and supports 8 chains with the ambitious goal of attracting 1 billion users to the world of decentralized finance.

Proposal Implementation Plan:

  • Phase 1 (Approximately 2-3 weeks): The initial phase will focus on the deployment of Uniswap v3 contracts and the development of associated subgraphs.

  • Phase 2 (Approximately 1-2 months): The second phase will concentrate on adopting the original Uniswap UI (swap, liquidity, info, analytics) to Gnosis Chain. This stage will also encompass integration with DeFiLlama analytics to ensure transparent and comprehensive tracking of the DEX’s performance, enabling better user decision-making.

  • Phase 3 (Approximately 12 months): The final phase will be dedicated to the consistent support and maintenance of the platform, ensuring its robust operation and efficiency. During this period, a concerted effort will be made towards marketing activities, aiming to increase awareness of the platform and attract substantial liquidity. This phase ensures the platform’s relevance, competitiveness, and ability to effectively serve the Gnosis community.

Funding Requested

In order to facilitate the execution of this initiative, we are seeking a grant amounting to $150,000 in GNO tokens from the treasury. These funds will be allocated towards contracts deployment, the development and ongoing maintenance of the new DEX platform, ensuring its smooth operation over the forthcoming 12 months.

We extend an invitation to the Gnosis community to engage in a robust discussion concerning this proposal. We encourage your input on the proposal’s deliverables, as well as the best possible methods for its swift and efficient execution. Your involvement and collaboration are paramount in shaping the trajectory and success of this initiative.

Looking forward,
0xPlasma Labs

Twitter: https://twitter.com/0xPlasma
TG: Telegram: Contact @ilia_0x

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Hi 0xPlasma - thank you for authoring this post on the Gnosis Forum. I want to direct you to our Governance Tutorial. It’s an important resource that shows you how to walk through the entire governance process when authoring a proposal.

Please let me know if you have any questions and I’m happy to help.

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maybe someone familiar with the internals can give me some insight why after Uniswap Interface we still can’t expect uniV3 in due time on gnosischain? The links cited above are all from last year and I haven’t found further discussion after this positive vote from April this year.

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You can check other chains’ proposals. There is not only this one that has not been executed. Currently, Uniswap’s attention is concentrated on launching v4 on the mainnet, which is likely to occur by the end of this year. As a consequence, the emphasis on v3-related matters will likely be reduced and deprioritized.

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Thank you for your proposal. Personally, I would rather spend the time & effort working directly with the Uniswap team to resolve any issues that may be preventing them from moving forward.

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We are here to help bring AMM v3 to Gnosis chain and its DeFi ecosystem. Uniswap Team won’t be doing any deployment or integration by themselves. You will need to go through the new governance proposal and process, which will take another six months and probably will get the same result, as now they are focusing on delivering Uni v4. The real question is whether the Gnosis ecosystem needs a more financially efficient DEX now or not.

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agree on this. The question behind is: how much more capital influx will this bring. Personally I am still using V2 deployments in many cases even where V3 is available, but this might be due to my laziness and is of course not representative.
Maybe someone familiar with the ‘large money flows’ like @Karpatkey can make a guesstimate?

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Concentrated liquidity is certainly an attractive AMM LP type to have on GC as it can be particularly interesting for LPing on certain asset types such as RWAs. The Uni V3 contracts are already deployed on Gnosis, the front-end integration is merely missing. But from my understanding there is no ETA for this. We are continuously exploring opportunities to get Uni V3 on Gnosis, whether this be a temporary UI to the official Uniswap contracts or a Uni V3 fork.

But personally, I also don’t think a Uni V3 deployment in itself is an overnight gamechanger for Gnosis. We already have great DEXs (Balancer, Curve, Honeyswap) for users and the concentrated liquidity is mostly interesting for LPing. Moreover, considering that trading through aggregators like CowSwap is becoming the norm, I could also envision that professional market makers are able to simply LP on the official Uniswap V3 contracts and have CowSwap solvers route through them - i.e. a user could simply trade through CowSwap and would be routed through the V3 pools if they have the best price. That would be the most pragmatic solution in the short-term IMO.

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The feature of concentrated liquidity in Uniswap v3 offers LPs more control over their price ranges, leading to more efficient capital utilization. As mentioned, this is considerably interesting for attracting LPs to Gnosis Chain and increasing the chain’s overall TVL. From a trader perspective, while Balancer and Curve offer simpler, multi-asset pools and stable swap functionality, the lack of Uniswap’s unique features can be partially covered through aggregators by routing trades to the pools giving the best price.

However, as stated, the introduction of Uniswap alone may not significantly alter the Gnosis ecosystem, given the existing robust setup with Balancer, Curve, and Honeyswap. The potential capital inflow, while challenging to estimate, could be mainly driven by the Uniswap brand, so a fork at this point might not bring the expected results as this adoption is yet to be tested.

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The reputation of a UNI doesn’t automatically generate volume/TVL(there was many examples of that). Take Arbitrum and Optimism, for instance, they apply and promote farming/incentivizing campaigns on top of Uniswap v3 pools. This strategy successfully attracts TVL and produces favorable for liquidity APY on-chain. This could be a viable strategy for utilizing a Uniswap v3 fork to increase TVL on Gnosis.

In addition, I have suggested launching a v3 fork as an indigenous Gnosis Decentralized Exchange (DEX), which would carry the Gnosis name and represent the interests of the community. This AMM v3 could be governed by Gnosis Governance, with the possibility of establishing the swap fee to support the buyback of GNO tokens. Consider the potential of this approach.