Hey everyone! My name is Dave Liebowitz and I lead growth at Gelato. Today, I saw a tweet from Erik Voorhees about the current landscape of the FOX liquidity mining program in addition to reading that the first round of liquidity mining rewards for Uniswap v2 will end in October. In lei of this, I want to make the ShapeShift community aware of what G-UNI is and how it can improve liquidity concentration for the FOX token.
For those who are not familiar, G-UNI is an easy-to-use, unopinionated framework for Uniswap v3 LPing. From a user-perspective, G-UNI turns Uniswap v3 into v2 again, a G-UNI pool will collectively aggregate everyone’s position into one pool and make it both fungible for those who provide liquidity as well as automatically reinvest trading fees earned from said position back into it which compounds returns over time. This will allow pools to be used in traditional farming contracts like those found in v2 and make managing positions easier for the average user.
What I am proposing is a FOX/ETH G-UNI pool to be incentivized in ShapeShift’s liquidity mining program
G-UNI is audited and used by projects such as Instadapp and Float for their own liquidity mining schemes which has proven both it’s utility and resiliency. Gelato only takes a 1% fee from fees claimed and a transaction fee to recoup the Gelato executor for gas costs on every automated transaction (such as a pool rebalance).
The ShapeShift community can decide how much or how little they want to manage the pool and can decide what ranges they want to incentivize liquidity, under what conditions rebalances occur, what party has control of the G-UNI pool, etc. For example, the community can decide to delegate the “Manager” functionality to a specific smart contract that enables “rebalances” (changing the range of the pool on Uniswap v3) to happen automatically based on any conditions managers deem appropriate.
Recently, Gelato has devised a novel rebalancing mechanism that will likely be utilized for GEL’s own liquidity mining program. Essentially, two G-UNI pools of a pair are incentivized and liquidity for each pool expands and contracts based on demand. For example, if there are two FOX/ETH G-UNI pools and FOX moons, the “FOX tracking” pool will automatically expand the tick range of FOX/ETH while the “ETH tracking” pool acts as a backstop in case the price drops again. In theory in the situation mentioned, the liquidity mining program can be built in such a way to incentivize more liquidity to the “FOX tracking” pool which ultimately promotes more capital efficiency. The goal of this G-UNI rebalancing system is to always maintain deep liquidity for a given pair. For more details on this, I encourage everyone to read our developer’s technical explanation of G-UNI rebalancing.
The Gelato team will be there to help with the process each step of the way and assist with setting everything up. If the ShapeShift community has any questions or feedback, we would love to hear from you!