Uniswap is no longer the leading decentralised exchange after losing over $1 billion in liquidity
Uniswap has lost over $1 billion collateral in the last 24 hours. The TVL (total value locked) in the platform has plunged by 44%. Consequently, the platform has lost its top spot in the list of DEXes with the highest TVL.
Maker and WBTC have moved to first and second place with $2.34 billion and $2.07 billion of assets locked in respectively. SushiSwap has benefitted the most, posting a positive 69.14% 1-day TVL change, with its TVL jumping from $332 million yesterday to $571 million as of writing.
Today (November 17) is the last day of its liquidity mining program, and the protocol’s liquidity could dip even further. This was a predicted outcome from last week as Uniswap governance has offered little direction regarding the future of farming.
With the pools expiring, collateral is quickly being moved out to better projects. According to Defipulse, over 1.3 million ETH (translating to about $600 million) has been pulled out of the protocol.
The collateral haemorrhage has set off a poll to determine the direction Uniswap will take. From the look of things, liquidity farming will go on. Holders are currently voting for a new proposal that will aim to bring back rewards for liquidity providers.
The proposal was suggested by Cooper Turley, who explained, “The goal of this proposal is to ‘maintain the status quo’, using reduced incentives as a means to continue distribution as we look to optimize allocations in the medium term.”
The proposal will cut, in half, the amount of UNI rewards compared to the former program. This means only 1.25 million UNI will be designated to the WTBC/ETH, USDC/ETH, USDT/ETH, and DAI/ETH pools monthly for two months. Overall, this will equate to 10 million tokens, representing about 4.6% of UNI’s current circulating supply.
Previously, 2.5 million UNI tokens were distributed to each pool per month. The community is expected to vote on the snapshot poll first. The poll has to receive 25,000 affirmative votes within 72 hours to move to the next consensus check poll.
This poll has a quorum of 50,000 votes in favour within five days. If the second poll garners the threshold in favour-votes, the proposition will be a fully-fledged governance proposal, requiring 40 million yes-votes to approve its implementation.