Uniswap is hemorrhaging collateral today as November 17 marks the final day of its liquidity mining program. In less than 24 hours, over $1 billion, or 40% of its liquidity, has left the protocol dumping it down to third place in the TVL charts.
CryptoPotato predicted this would happen if Uniswap governance did not hold a vote on the future of farming before the pools expired. Those pools are drying up rapidly as the collateral is going elsewhere, and from almost $2.5 billion held, they’ve now dwindled to just $960 million.
According to Defipulse, over 1.3 million ETH worth an estimated $600 million at today’s prices has left the protocol. Ethereum prices are holding steady at the time of writing around $465 so they’re not being sold just yet.
In a belated response to the inevitable exodus, a ‘temperature check’ poll has been set up to gauge whether the community wants to receive their token distributions or continue farming UNI.
At the time of press, two whale addresses had pledged almost 30K UNI between them to sway the vote to a ‘yay’ for the proposal which means as it stands, the liquidity farming will continue. Cooper Turley, who made the proposal, explained;
“The goal of this proposal is to ‘maintain the status quo’, using reduced incentives as a means to continue distribution as we look to optimize allocations in the medium term.”
Should the proposal succeed, there is a second proposal to extend farming incentives for a further two months but at half the rate of current distribution;
“Distribute UNI for an additional 2 months from the time this proposal is adopted and executed by governance. Distribute to the same 4 pools, but at half the rate of the genesis distribution.”
It added that the snapshot poll will be live for 3 days, and if it passes with a minimum of 25,000 UNI in support, the proposal will move forward to the consensus check phase.
The massive movement of crypto collateral has gone in Maker’s favour as it takes the top spot with a market dominance of 18%. Wrapped Bitcoin is the second largest with a TVL of just over $2 billion while Uniswap has just dropped to third place.
UNI prices are still holding steady, flat on the day at $3.75 as they have yet to be distributed.