With Ethereum layer 2 scaling project Arbitrum set to open to developers on Friday, decentralized finance (DeFi) behemoth Uniswap is taking notice.
That interest is evidenced by a community Snapshot poll “to gauge interest in deploying Uniswap v3 to Arbitrum.” The poll, deployed by Compound founder Robert Leshner, will last two days.
The move reflects a growing appetite for fee relief from the world’s leading blockchain for DeFi applications. As Ethereum’s native asset, ETH, has risen in price – and as DeFi on the network has swelled to a $62 billion concern – transaction fees on decentralized exchanges (DEXs) like Uniswap have become prohibitive for smaller users.
A number of scaling plays have emerged in recent months; some are clearly hitching their wagons to Arbitrum, which has yet to fully launch.
Arbitrum says it can offer drastically higher transaction throughput than Ethereum while slicing gas fees to near zero. The system uses rollup technology to batch transactions before slapping them on-chain.
Where DeFi projects such as Uniswap land will be an important factor in the ongoing “scaling wars,” with layer 2 solutions like Polygon, Optimism and Matter Labs’ zkSync vying to capture market share.
The Uniswap poll makes it clear this wouldn’t be a winner-take-all approach, but would increase the interconnectedness of the larger ecosystem. What Uniswap actually seems to be eyeing is other exchanges – be they DEXs or their centralized counterparts.
“In the meantime, not deploying to new and growing networks like Arbitrum and Matic just allows for other exchanges to come in and fill that spot,” reads the post accompanying the poll. “This could potentially eat into fees earned by governance in the future.”
Leshner’s post also said the move could help to grow projects that can be built on Uniswap version 3.
“Growing the public smart contract libraries interfacing with and using the v3 codebase will only expedite Uniswap adoption on all chains as the code and integrations become more battle tested,” it said.
One commenter on the forum said they did not think layer 2s like Arbitrum should be seen as competition, particularly as they don’t have tokens.
“In my opinion it would be good for Uniswap with regards to L2,” user Agusx1211 wrote. “Arbitrum is an alternative implementation of an optimistic rollup with different design principles and thus tradeoffs.”
Agusx1211 compared Arbitrum with another optimistic rollup project, Optimism. “Optimism can automatically follow Ethereum hardforks but Arbitrum has far less risk of reaching a non-deterministic state, and it can be used with the same contract bytecode as used for Ethereum L1 contracts,” they said.
At the time of publication, the poll showed 31.6 million UNI for the proposal and none against.
Uniswap governance is notoriously hard to execute. A contentious proposal to issue last summer’s UNI airdrop to those who interacted with the exchange via third-party interfaces saw overwhelming support from (potentially self-interested) voters but failed to reach a quorum for the vote to be executed.