Rationale
The Uniswap Foundation (UF) proposes that the Venus Protocol deploys to Unichain. For reasons we’ll describe below, this expansion provides Venus’ users with the opportunity to benefit from the growth of a DeFi-specific chain and Venus’ developers to experiment with new L2 primitives. We look forward to welcoming Venus to the Unichain community, and engaging with you on any questions you may have on this proposal.
Motivation
Unichain is an OP-stack L2 and member of the Superchain. It will ship in the coming months as a vanilla optimistic rollup. In early 2025, upgrades will be made to enable faster inclusion times (<250ms thanks to Rollup Boost) and stronger finality assurances for transactions that are posted to mainnet (thanks to the UNI Validation Network). These are the first customizations of Unichain but will not be the last; the goal is to build a chain that is truly optimized for DeFi.
Benefits of Deploying on Unichain
Unichain will ship with a deployment of Uniswap v4. v4’s hooks enable developers to build a wide variety of protocols with immediate access to the core AMM’s liquidity. In the year since v4 was made code-available, we have seen incredible experimentation with this new primitive before it has been deployed in a production setting. Just days after v4’s launch, there are nearly a dozen production-grade hook protocols ready to go to production alongside it, with more waiting in the wings.
The UF will continue to fuel this experimentation with a robust grants program targeting hook developers building on Unichain. Venus users will benefit from being on the frontlines of this innovation. For example, several new hook designs give Uniswap liquidity providers the ability to provide liquidity while lending in Venus without the need for ongoing position management. A successful implementation of this hook would turn Uniswap protocol liquidity providers into net new lenders, driving user acquisition for Venus.
Furthermore, Unichain’s technical upgrades to the OP Stack will benefit Venus’ liquidation mechanism. Economic finality from UVN will allow liquidators to tap into cross-chain liquidity while 250ms flash blocks will make liquidations more efficient and reduce risk. Rollup Boost’s TEE-enabled architecture also paves way for MEV internalization, which could further improve the liquidation mechanism’s efficiency.
Additionally, the UF has committed to fund two $450k grants for lending protocols to grow their TVL on Unichain. Which protocols receive grants will be decided by a futarchy-based protocol built by another one of its grantees, Butter. The application for this program can be found here. This is an exciting opportunity for the Venus protocol to participate in a first-of-its kind experiment that leverages the wisdom of the crowds to identify the best available option for a given task. In this case, the task will be “increase lending protocol TVL on Unichain” and the available options will be any lending protocol that applies. The market will identify which two protocols it believes to be the most likely to accomplish the task, and the UF will make a $450k grant to each.
Risk Analysis
Because Unichain is a member of the Superchain, it is highly scalable and secure. The core chain infrastructure is in production across numerous L2s, serving billions of dollars of AUM and millions of users daily.
Additional Resources
Unichain Builder Toolkit - How the Uniswap Foundation is helping Unichain grow
Unichain Whitepaper - Includes details on Rollup Boost and the UVN
Unichain Documentation - Including links to core developer infrastructure providers