[Temperature Check] Enable 1bp Fee Tier for UniswapV3 on Arbitrum

By GFX Labs & ConsenSys

Rationale:

This proposal seeks to deploy a 1bp fee tier for UniswapV3 on Arbitrum. This will allow users to trade with lower fees, making it more accessible and competitive with other decentralized exchanges. The optionality of a 1bp fee tier is useful for stable-to-stable swapping and can often be found among the top ten liquidity pools on each of Uniswap’s respective deployments.

Since the launch of the 1bp fee tier on mainnet, Polygon, and Optimism, the 1bp fee tier has directly led to growth in Uniswap’s DEX market share and directly competes with stablecoin DEX protocols.

Source Source Source

Benefits:

Lower fee tiers increase competitiveness and incentivize more user activity.
As liquidity is more concentrated, 1bp pools are more capital efficient, especially for stable-to-stable swaps.
Lower fee tiers can also lead to increased volume and earnings for liquidity providers.

Why Arbitrum:

Favorable outcomes from deploying the 1bp fee tier on all other existing Uniswap v3 deployments make this an uncontroversial upgrade of the Arbitrum deployment.

Arbitrum has a thriving ecosystem of DeFi dapps that will benefit from less stable-to-stable friction. The Uniswap deployment on Arbitrum currently has ~200M of TVL and ~160M of volume. With Curve’s liquidity bribing mechanism losing efficiency, Uniswap is in a strong position to compete for traders’ flow and LPs’ liquidity by providing more competitive fee tiers.

Outlined from the discussion + additions.

Proposal

Target: Arbitrum Delayed Inbox Function: createRetryableTicket

To: Arbitrum UniswapV3 Factory
l2CallValue: 0
maxSubmissionCost: 300000000000000
excessFeeRefundAddress: Uniswap Timelock
callValueRefundAddress: Uniswap Timelock
gasLimt: 200000
maxFeePerGas: 1000000000
Data: 0x8a7c195f00000000000000000000000000000000000000000000000000000000000000640000000000000000000000000000000000000000000000000000000000000001

start

February 2, 2023

8:42 PM

end

February 7, 2023

8:40 PM

Voting

off-chain

Voting type

single-choice

Voters

9,707

Votes

38,105,686

Final Votes

closed

For

38.1M UNI

100%

Against

118.4 UNI

Abstain

145.1 UNI

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0x000000000000

Mon 00, 2024 00:00

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