Popular decentralized automated market maker (AMM) Uniswap will deploy its smart contracts on Polygon, the Ethereum scaling solution, Proof-of-Stake (PoS) chain. The announcement was made via Twitter by the official handle of Uniswap Labs after the completion of a community vote.
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The AMM will be rollout on Polygon on its third iteration (V3), per the initial proposal. The motion was passed with 72 million votes in favor and 503,009 against which suggest the proposal has wide acceptance within UNI holders.
The Uniswap community has voted to deploy v3 on @0xPolygon through the governance process.
Uniswap Labs will deploy Uniswap v3 contracts within a few days.
Stay tuned. pic.twitter.com/LwVLwEngPl
— Uniswap Labs (@Uniswap) December 18, 2021
Presented on November 19th by Mihailo Bjelic, one of Polygon’s co-founders, claiming it’s “the right moment” to carry on this community driven initiative. Bjelic claimed Polygon has one of the “strongest DeFi ecosystem”, that the implementation could boost Uniswap’s user base, and promised users that they will incentive adoption to achieve that goal.
We initiated the final phase of the governance process – On-chain Vote: https://t.co/PcHcnrcj2u.
If the vote passes, the deployment is officially approved.
Huge thanks to the Uniswap community for the overwhelming support so far!
Let’s make this happen! https://t.co/RePmCRaBlb
— Mihailo Bjelic (@MihailoBjelic) December 10, 2021
As a scaling solution for Ethereum, Polygon can also provide users with a “battle-tested” and cost-efficient implementation of the popular AMM. In the DeFi ecosystem, Uniswap ruled supreme until high transaction fees price-out a large number of users from the protocol.
As Bjelic pointed out, other major Ethereum protocols have chosen Polygon as their preferred scaling solution. The co-founder mentioned Aave, Curve, SushiSwap, Balancer, and others while adding the following on the advantages of Polygon and its ecosystem:
Besides the impressive number of deployed projects, additional strength of Polygon’s DeFi ecosystem is that it is already self-sustainable. We effectively stopped all liquidity mining incentives some time ago, and yet we keep seeing capital and user inflow 25 and very high user retention 14.
Additional data provided by Bjelic claims that protocols deployed on Polygon experience an increase in their use base. After their implementation on this network, Aave reached 700,000 actives users, a 10x increase when compared to the same metric on Ethereum.
Uniswap And Polygon To Onboard Thousands Of New Users?
Of course, most users expect the implementation on Polygon to decrease the cost of usage for Uniswap. The co-founder of this scaling solution claimed that Aave also experienced a 16x increase in its user’s activity.
Bjelic further argued that the integration between Uniswap v3 and Polygon’s PoS will represent a comeback to the original “DeFi vision”. This sector was created to provide people with open, and inclusive financial solutions. He added:
DeFi is envisioned as an open, inclusive financial system, so deploying to Polygon (and other scaling solutions) can be considered as returning to this original vision.
Polygon will explore the possibility to commit around $20 million from their treasury to create liquidity incentives. The project abandoned this practice, but Bjelic claimed they are willing to resume for Uniswap due to its importance as one of the flagship DeFi protocols.
The funds will be distributed as follow: $15 million might be allocated for long term liquidity incentives and $5 million for a “special purpose DAO”. The goal of this organization will be to increase Uniswap adoption on Polygon.
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As of press time, UNI trades at $15,99 with 10.3% profits in the past day.
UNI trends to the upside in the 4-hour chart. Source: UNIUSDT Tradingview