Uniswap Grants Program

Last Updated onApril 12, 2023

Grant Page Apply

Grant Info

All high-level information about the grant.

About: The Uniswap Protocol is an open-source protocol for providing liquidity and trading ERC20 tokens on Ethereum. It eliminates trusted intermediaries and unnecessary forms of rent extraction, allowing for safe, accessible, and efficient exchange activity. The protocol is non-upgradable and designed to be censorship-resistant.
Supported Blockchains: ArbitrumAvalancheOptimismEthereumPolygon
Grant Category: Exchange
Grant Use Cases: IntegrationEventHackathonCode AuditMarketing ContentDeveloper ToolingProtocol DevelopmentApplicationEducational ContentDAO ToolingResearchAnalytics
Maximum Funding: $250,000

RFPs

All suggested ideas and projects from grant givers themeselves.

1. Content on Advanced LP Strategies for Uniswap V3: Overview Learning how to LP on Uniswap v3 can be challenging given the number of variables to take into account when creating and rebalancing a liquidity position, including for instance market volatility. Despite the initial complexity, an in depth understanding of the Uniswap Protocol allows sophisticated LPs to deploy advanced strategies to reduce their market risk exposure by combining LP positions with other financial instruments. Problem The area of developing advanced strategies to manage risks for liquidity providers on Uniswap V3 is still in its infancy. To effectively implement these strategies, a comprehensive understanding of the underlying principles of Uniswap V3 (such as concentrated liquidity and impermanent loss) and expertise in various investment instruments like options and power perpetuals is essential. Currently, there is a scarcity of resources that explain these strategies to a wider audience. Solution To address these challenges, this RFP seeks a solution that improves the expertise of liquidity providers on Uniswap V3 by sharing information on advanced strategies for providing liquidity, including an examination of various hedging solutions and alternative strategies. Scope We are seeking proposals for educational content in the form of a collection of articles/modules that includes: - Articles/modules that explain strategies to hedge risks using borrowing, short/leverage positions, options, and power perpetuals (such as [Squeeth](https://opyn.gitbook.io/squeeth-faq/squeeth/beginner-squeeth-faq)) - Articles/modules that describe LP strategies applicable for specific goals, such as using LP positions for range orders or as an hedge for sideways markets - An overview of the characteristics, behaviour in different market conditions, tradeoffs, and costs associated with implementing each strategy - Interviews with different LPs on their strategies and how they change in different market environments - The inclusion of simulation models in tools like [desmos](https://www.desmos.com/) is not required but would be a bonus - The content should be presented in a clear and concise manner, easily understandable for liquidity providers with intermediate to advanced experience. Deliverables As part of the project scoping, the team is expected to define the detailed list of deliverables for their proposal. Deliverables should include (but are not limited to) a collection of educational articles, blog posts or modules that explain various advanced LP strategies.

2. LP Actions Open Source Library: Overview A positive user experience is crucial for driving mainstream adoption of cryptocurrencies. To retain its dominance in the decentralized exchange space, Uniswap must prioritize a seamless and effortless experience for both liquidity providers and traders. To achieve this the Uniswap Foundation promotes the development of tools for developers to easily create smooth and enjoyable applications that support the Uniswap ecosystem. Problem Managing liquidity provider (LP) positions in Uniswap involves several steps and manual transactions and can be a time-consuming task. The opening of an LP position involves a sequence of actions, including: 1) Determination of the correct number of tokens A and B to be deposited based on the strategy selected and the current price (this can be done using a Uniswap V3 simulator such as [Uniswap.Fish](https://uniswap.fish/?network=ethereum), or [Defi-Lab](https://defi-lab.xyz/uniswapv3simulator), or via the Uniswap Labs Interface) 2) Swapping assets to the right number of token A and Token B required for the specific strategy. (This can be done via Uniswap Interface, but requires shifting from the provide liquidity screen to the swap interface to get the right amount of tokens to deposit) 3) Depositing the assets into the LP position. (Here, you’d shift back to the provide liquidity interface). Similarly, closing a position involves several steps: 1) Collecting fees. 2) Closing the position. 3) Manually swap the tokens collected in case the LPs wants to exit to a single token. These multiple, manual steps using various interfaces is not optimal for a user-friendly experience. They might also result in decreased total value locked (TVL) and trading volume, as transactions may be abandoned or reduced due to the additional costs and time needed for LPs to manage their desired LP positions. Solution This RFP aims to enhance the tools available to developers by proposing the development of a solution to combine the multiple transactions needed to open and close an LP position into a single transaction. This solution should be easy to integrate into various UI/UX designs and to be used by developers on different user interfaces. Scope This enhancement aims to allow developers to easily integrate a simplified UX for depositing liquidity in Uniswap V3. The proposal should include: - A solution to create an LP position using any token as the starting point in a single transaction: 1. Identifying the correct number of tokens to use for the intended strategy 2. Converting the input token into the appropriate amounts of each target token (using Uniswap) 3. Depositing the tokens and setting up the LP position. - A solution to withdraw to a single token in a single transaction: 1. Closing the LP position 2. Collecting the fees 3. Converting the tokens to the desired token (using Uniswap) - A simple open source front end built on top of the library developed (unless you are integrating with an existing platform to demonstrate how it works) - Top class documentation to allow other developers to easily integrate the functionalities in their frontends - The solution should support all current deployments of Uniswap (Ethereum, Polygon, Arbitrum, Optimism, Celo) and should address how to support future possible implementations. Deliverables As part of the project scoping, the team is expected to define the detailed list of deliverables for their proposal. Deliverables should include (but are not limited to) a library to allow developers to easily integrate a simplified UX for depositing liquidity in Uniswap V3 and top class documentation to allow other UI/UX developers to easily integrate the functionalities in their frontends.

3. LP University: Beginner to Intermediate Course to Uniswap V3: Overview Uniswap V3 improved the efficiency of the AMM model by introducing concentrated liquidity, which allows liquidity providers to specify a price range for their assets and implement personalized strategies with different risk/reward profiles. Uniswap V3 provides more flexibility for LPs to express their market views and customize their strategies. The increased flexibility of Uniswap V3 requires liquidity providers to make more decisions about their approach, including defining additional parameters and making active investment decisions. Problem Although various Twitter threads, articles, and research have been created to address different aspects of providing liquidity on Uniswap V3, a comprehensive, easily accessible, and curated educational program to guide LPs from beginner to an intermediate level does not exist. Solution To address these challenges, this RFP aims to support the creation of a reliable source of information to guide new liquidity providers from a beginner to an intermediate level. Scope We are seeking proposals for an immersive and interactive educational experience that centers on: - Introduction to automated market makers (AMM) - The fundamentals of Uniswap V3 and concentrated liquidity - Distinguishing between active and passive strategies, the concept of impermanent loss, and rebalancing - Basic risk management techniques - Providing an overview of all the liquidity provision tools available to the community, including their features and functionality (such as Seedle, Uniswap.fish, etc.) The content should be an online, self-paced intermediate course with interactive quizzes, production quality video, and exercises using a platform like Teachable. Deliverables As part of the project scoping, the team is expected to define the detailed list of deliverables for their proposal. Deliverables should include (but are not limited to) an online, self-paced intermediate course with interactive quizzes and exercises using a platform like teachable.

4. LP Tax Tool: Overview Providing liquidity on the Uniswap Protocol may yield gains or losses to the LP, and as such may be considered relevant when calculating one’s tax obligations. Problem Determining taxes and PnL on Uniswap, both as a trader and liquidity provider, can be challenging and complicated. At present, there are no readily available tools to help with this task. As a workaround, LPs may develop their own solutions, however, this requires a thorough understanding of Uniswap and its data structures, as well as local tax regulations. This is time-consuming and not efficient. Solution To address these challenges, this RFP seeks the creation of an intuitive tool to help liquidity providers easily calculate their tax obligations, complete with the capability to generate downloadable reports. The tool should also be compliant with tax regulations across Europe and North America to start. Scope We are looking for proposals for a tool that: - Complies with tax regulations across the US and EU. - Can seamlessly integrate with all networks on which Uniswap is deployed and can be easily adapted to support additional networks in the future. - Collects and calculates PnL and Tax Data for all Uniswap LP positions for a given address or list of addresses. Specify in your proposal how you calculate PnL. - Tool provides easily downloadable reports (i.e. in CSV format). Deliverables As part of the project scoping, the team is expected to define the detailed list of deliverables for their proposal. Deliverables should include (but are not limited to) a tool that supports LPs and trader to easily calculate their PnL and tax data, with suitable user documentation.

5. Research on cross-chain market structure dynamics: Overview The growth of new chains and the enhancement of bridge solutions that allow for seamless movement of assets across chains is drastically altering the blockchain economy by making block space more accessible, plentiful, connected and ultimately cheaper. Furthermore, the deployment of popular dApps, such as Uniswap, to multiple networks has led to the creation of multiple pools representing the same assets on different networks but with different volume and liquidity depth. This presents new opportunities for trading and for exploiting inefficiencies through MEV to reduce discrepancies between networks. Problem The changes in the basic market structure of blockchain economies with a decreasing cost of block-space has the potential to alter the balance between different actors in the ecosystem. Additionally, as L1s and L2s chains mature and new chains (such as L3s) are emerging, the growth of cross-chain MEV opportunity the various es will continue to increase and expand. The potential effects and opportunities for decentralized applications like Uniswap, as a result of these trends, are yet to be fully explored and understood. In the specific case of Uniswap, particular attention should be focused on the impacts of these trends on traders, liquidity providers, and the overall Uniswap Protocol. Solution Through this request for proposal, the Uniswap Foundation aims to support research on cross-chain market structure dynamics and the opportunities/threats it carries for the Uniswap ecosystem. Scope Possible topics for investigation: - Identify and quantify cross-chain MEV extraction taking place within the Uniswap ecosystem (considering Ethereum, Polygon, Optimism, Arbitrum and Celo). - Analyze the cross-chain arbitrage landscape: 1. Determining the Key Players involved (LPs, Validators, Searchers, Bridges, etc.) and analyzing where and how the value is accrued. 2. Illustrating the current methods used to capture MEV cross-chain. 3. Highlighting potential alternative approaches to minimize differences across different Uniswap implementations (including an a analysis of Cross-chain Arbitrage via Slot Auctions or via Pricing Premiums as introduced in this [paper](https://variant.fund/articles/cross-chain-order-flow-auctions/) and other possibilities) - Analyze how cheaper block-space could be used to improve order flow routing, focusing on the implications for traders, liquidity providers and the overall Uniswap Protocol. - Highlight what are the opportunities and threats that the change in market structure could bring to the Uniswap Protocol, focusing on the impacts on traders, liquidity providers and the overall protocol. Examine potential actions that can be taken by Uniswap to mitigate risk, including but not limited to: running its own block builder, implementing a search module to detect and capture arbitrage opps (and share value with users), funding research into and implementation of cross-chain routing, and more. ## Deliverables As part of the project scoping, the team is expected to define the detailed list of deliverables for their proposal. Deliverables should include (but are not limited to) a research on cross-chain market structure dynamics and the opportunities/threats it carries for the Uniswap Ecosystem. The research should suggest concrete actions for further investigation or, ideally, provide directions for implementation.