Michael Nadeau of The DeFi Report claims that Unchain has the potential to redistribute millions of dollars of value to Uniswap Labs and UNI token holders. Not everyone is convinced that layer 1 liquidity will migrate.
Posted on October 14, 2024 at 6:24 AM EST.
Uniswap Labs is the latest entrant to the Layer 2 ecosystem – the company behind decentralized exchange Uniswap, which last week revealed We plan to release 'Unchain' in the coming weeks.
Uniswap founder Hayden Adams said the motivation behind the new Layer 2 is the fragmentation of decentralized finance (DeFi), where liquidity on each network is siled from capital on other networks. He told Unchained that it was about working on the user experience.
According to the study According to The DeFi Report, one of the biggest beneficiaries of Unchain will be Uniswap Labs at the expense of Ethereum validators.
Michael Nadeau, founder of the DeFi report, said that instead of paying Ethereum validators $368 million in settlement fees, Uniswap Labs and potential UNI holders will receive that value when they launch on Unchain. I pointed out that I would get everything.
Nadeau also estimates that Uniswap Labs will be able to capture maximum extractable value (MEV) since it owns Unchain's validators. MEV is the maximum amount of value that can be extracted from a blockchain network by manipulating the ordering, inclusion, or exclusion of transactions within a block.
“MEV is estimated to be around 10% of the total fees paid on Uniswap ($100 million last year). They will also have the option to share a portion of this with token holders.” Nadeau said.
Other winners in the transition to Unichain will be Uniswap liquidity provider, which could potentially participate in payments and MEV, and Optimism, which underpins the network of layer 2 blockchains called “superchains” on which Unchain is built.
In addition to Ethereum validators, Nadeau expects ETH token holders to also suffer losses due to the reduction in ETH burnout and payment fees. Arbitrum and Base sequencers may also lose some of their fees and MEV to Unchain.
Several members of the community challenged Nadeau's reasoning. Some critics have argued that trading volumes do not automatically transfer to Unichain, while others have argued that one of Unichain's main selling points is that it allows little or no MEV to be generated. I argued that this is by design.
