Blockchain@Columbia, in conjunction with the Gnosis Team, are proposing to deploy Uniswap V3 to Gnosis Chain.
Overview of Gnosis Chain
Formerly known as the xDai Chain, Gnosis has been in development since 2018 and has continued to build and grow throughout the years. Gnosis includes a beacon chain framework, rollups, and other features that enable faster blocks and epochs, low-cost transactions, and the ability to construct trustless bridges.
The Gnosis Chain team has demonstrated their dedication towards the growth and adoption of the Ethereum ecosystem. Gnosis Chain's objective is to expedite the advancement of Ethereum and expand its reach. We are convinced that deploying Uniswap v3 on Gnosis Chain will offer various advantages to both Uniswap Labs and its users.
With Uniswap v3 as a cornerstone DeFi engine, various protocols will have the opportunity to interact within the ecosystem, further promoting growth. Perpetual Protocol, the flagship protocol on Gnosis Chanin, relies on Uniswap v3 and this deployment will enable Perpetual to continue to flourish on Gnosis Chain. Other bluechip deployments including Curve, Balancer, and Sushi have also chosen Gnosis as their home bases and shown steady growth in TVL. Complete metrics of Gnosis Chain are available at https://defillama.com/chain/Gnosis. Many new protocols will soon be deployed on Gnosis and we believe that Uniswap can be at the forefront of the next wave of DeFi on GC.
Gnosis Chain’s ability to offer stable, low-cost transactions are directly beneficial to Uniswap users. With low gas costs that don’t impact swaps and trades, GC can offer users the ability to deploy efficient strategies at a higher volume, generating more fees – an opportunity not available on Ethereum mainnet.
Gnosis can provide an iterative environment where Uniswap Labs can experiment with new functionalities and front-run new features. Unlike a test environment, a real value environment like GC allows for a more accurate evaluation of the platform’s capabilities. This also provides an opportunity for uniswap to identify and address any potential issues stemming from important Ethereum updates before their mainnet activation. With optimized slot and epoch times, Uniswap can ensure faster iteration and improve the overall efficiency of the platform.
Deploying Uniswap on Gnosis Chain ensures tight compatibility with Ethereum. GC currently supports various tools, resources, projects, and protocols that are already supported by Ethereum, with more being onboarded regularly. A full list of protocols on GC is available at https://gnosischain.world/. Many existing projects are using Gnosis Safe for their daily operations. The Gnosis team is also working on a trustless bridge architecture that will connect Ethereum and GC, providing seamless interoperability between the two chains. The Gnosis Beacon Chain validator set is expanding rapidly with 113,665 active validators at the moment, bringing massive decentralization to the chain. While the GBC shares many similarities with the Ethereum Beacon Chain, there are some notable differences. Notably, GBC has 5-second blocks and < 2-min epochs, which allow for faster transactions and has a lower gas target of $.01 per 100k gas, providing stable transactions. The validator set is economically and geographically diverse, ensuring greater decentralization with lower-stakes, lower-TVL environment.
The Gnosis Chain’s unique characteristics such as stable, low-cost transactions offer significant advantages to Uniswap users. With predictable and low gas costs, traders can explore new strategies and approaches that may not be feasible on other chains with variable and high fees, such as the Ethereum mainnet. This presents an opportunity for Uniswap users to optimize their trades and maximize their returns, ultimately enhancing the overall user experience.
Gnosis Chain is committed to increasing their user base and on-chain activity by providing user incentives. To achieve this goal, GC has established an ecosystem fund that is strategically allocated from the GnosisDAO treasury to promote adoption. As part of our joint proposal, we suggest utilizing a portion of these funds to promote Uniswap v3 adoption. This initiative will encourage users to trade and stake their assets, ultimately promoting greater liquidity and activity on the platform. Through this program, we aim to attract more users and establish Uniswap as a leading DeFi protocol on the platform.
Proposal
This proposal has already been in discussion since April 2022, where it has passed both a snapshot check and temperature check with overwhelming support. Unfortunately, due to the Nomad bridge incident, deployment was put on hold. The Gnosis team has continued to work and push this proposal throughout this time and we believe that it’s fair for their work to come into fruition after a year.
This proposal comes at a crucial time as Uniswap’s V3 license is expiring soon. Expectedly, protocols will harp on this opportunity and use the same V3 design to extract value in ecosystems where Uniswap is absent. As such, we believe that it is important for Uniswap to capture this opportunity prior to the license expiration date before forks (which may or may not be safe) arise.
Echoing the post made by the Gnosis team, Blockchain@Columbia supports Uniswap deployment on Gnosis with Wormhole as the bridge provider for a number of reasons.
Wormhole was recently voted-in as the bridge provider for Uniswap deployment on BSC. With this in mind, Wormhole has the necessary tools to facilitate deployment on Gnosis Chain due to the already developed mechanisms needed for BSC deployment.
While we understand that security is a concern, the extent of Uniswap design that Wormhole will be responsible for are protocol parameters such as fees.
We are aware that there is an on-going discussion on using a multi-bridge design; however, it is expected to take months with a high likelihood of delays. On the other hand, deployment on GC is expected to be ready within a week or two after governance approval.
Note that we are not against changing this design through governance later on should a more secure and efficient method arise.
Final Thoughts
As we stated in our post previously, there is a tradeoff between choosing the most efficient bridge provider and the urgency of deployment. With the bridge assessment committee’s findings expected to be released far later than the license expiry, it’s more pressing to cement Uniswap’s presence on these chains.
Emphasis should be placed on the primary purpose to execute proposals governing this deployment. This ensures that Uniswap’s decentralized governance model stays robust and responsive to the evolving needs of the ecosystem, regardless of the underlying chain.
We believe that when a more efficient design is finalized, multi-chain deployment design should be altered with said solution.
