Uniswap Labs is the latest entrant to the layer 2 ecosystem — last week, the firm behind decentralized exchange Uniswap revealed plans to launch ‘Unichain’ over the next few weeks.
Uniswap founder Hayden Adams told Unchained that the motivation behind the new layer 2 was to tackle the fragmented user experience of decentralized finance (DeFi), where liquidity on each network is siloed from capital on the others.
According to research from The DeFi Report, one of the biggest beneficiaries of Unichain will be Uniswap Labs, at the expense of Ethereum validators.
The DeFi Report founder Michael Nadeau noted that instead of paying $368 million in settlement fees to Ethereum validators, Uniswap Labs and potentially UNI holders would capture all that value when they launch on Unichain.
Nadeau also estimates that Uniswap Labs will be able to capture Maximal Extractable Value (MEV) since they will own Unichain’s validators. MEV is the maximum amount of value that can be extracted from a blockchain network by manipulating the ordering, inclusion, or exclusion of transactions within blocks
“MEV is estimated to be about 10% of total fees paid on Uniswap ($100m over the last year). They will have the option to share some of this with token holders as well,” said Nadeau.
Other winners of the move to Unichain will be Uniswap liquidity providers, who could potentially participate in settlement and MEV, and Optimism, which is behind the network of layer 2 blockchains called ‘Superchain’ that Unichain is built on.
Aside from Ethereum validators, Nadeau expects that ETH token holders will also lose out because of a smaller amount of ETH burned and settlement fees. Arbitrum and Base sequencers could also lose a portion of fees and MEV to Unichain.
Several members of the community took issue with Nadeau’s reasoning. Some critics argued that trading volume wouldn’t automatically migrate to Unichain, while others argued that one of the main selling points of Unichain was that it was designed to have little to no MEV generated.
October 14, 2024, 9:00am ET: This article was updated to correct the spelling of Unichain.
