On the evening of October 10, Uniswap Labs finally released another major product development after V4 and UniswapX - Unichain. According to the official statement of Uniswap Labs, after years of building and expanding DeFi products, the Uni team has seen many areas in DeFi that need improvement. This Optimism super chain based on OP Stack aims to create the necessary conditions for the advancement of cross-chain DeFi and Ethereum expansion roadmap, and become a fast and decentralized "liquidity chain".

The Unichain testnet was launched today, and the mainnet will be launched later this year. The Uniswap Foundation will provide funding and project support to help developers develop on Unichain. After the announcement, the price of UNI continued to rise, with a 24-hour increase of 15%, once exceeding $8. However, while being surprised by the "Uniswap chain", everyone is still most concerned about the old question: Does it empower UNI?

Unichain Architecture & Interaction Introduction

According to the Unichain official website and its white paper, Unichain is an L2 built on OP Stack, with two key innovations, namely verifiable block construction and Unichain verification network.

Among them, the verifiable block construction mechanism is built by Uniswap in cooperation with Flashbots, which achieves an effective block time of 200-250 milliseconds by splitting each block into four "Flashblocks". Unichain will currently launch with a 1 second block time, with 250 millisecond block times to follow soon. Unichain will also significantly improve market efficiency while reducing transaction latency by increasing the frequency of arbitrage and reducing the value loss of MEV.

The Unichain Validation Network is a decentralized network of Unichain node operators designed to reduce certain key risks in the block ordering process, achieve faster economic finality, allow for faster settlement of cross-chain transactions, and support potential future expansion.

Unichain is based on the OP Stack superchain and combines the Intent Bridge to facilitate the seamless flow of liquidity between chains and provide users with fast, cheap and extensive access to liquidity. According to the official introduction, the development process of Unichain is completely open source and its code base is available to all OP Stack superchains.

It is worth noting that Unichain can reduce users' transaction costs by about 95% in the short term. Although Unichain currently relies on a single sorter to improve efficiency, the team has made certain mechanism innovations on the current mainstream L2 model, allowing full nodes to help verify blocks to improve Unichain's decentralization.

Currently, Unichain already supports seamless transactions across dozens of chains, and users can add the Unichain Sepolia testnet to existing Ethereum wallets. Here is some useful information:

Chain ID: 1301

RPC URL: https://sepolia.unichain.org

Currency Symbol: ETH

Block Explorer: https://sepolia.uniscan.xyz/

Tools for claiming testnet ETH include:

Alchemy, using an Alchemy account you can claim testnet ETH once every 24 hours;

QuickNode, every 12 Get testnet ETH once an hour;

Superchain, get 0.05 testnet ETH every 24 hours, or verify the identity on the chain to get more tokens;

thirdweb, claim testnet ETH every 12 hours.

Is UNI finally empowered?

Back to the question that everyone is most concerned about, has UNI been empowered on Unichain? The answer is yes, but it is not ideal.

UNI does have a real use case in Unichain. As mentioned earlier, in order to improve the decentralization of Unichain, the Uniswap team designed a validator network and used UNI as a staked token. Node operators must stake UNI on the Ethereum mainnet to become validators in UVN (Unichain Validator Network). The number of staked tokens not only determines the influence of the validator, but also its commitment to participate in network maintenance.

The Unichain network divides time into fixed-length cycles, and at the beginning of each cycle, the network takes a snapshot of the current staked balance, which provides the basis for the calculation of rewards. As each cycle begins, the network calculates the value of each staked token and distributes rewards accordingly.

Participants can increase the stake weight of validators by staking and voting, thereby increasing their chances of becoming active validators. Active validators are those with the highest stake weight, who are eligible to issue proofs and earn special compensation within the cycle.

Active validators need to run an instrumented Reth Unichain node online, which is responsible for proposing and validating blocks. Validators need to sign block hashes and publish them to the UVN service smart contract at the end of each cycle as proof of the validity of their work. The service smart contract verifies these proofs and immediately issues rewards based on the validator's stake weight.

If the validator fails to publish a valid proof within the cycle, they will not receive a reward, and the unallocated reward will be transferred to the next cycle.

So, compared with the useless "mascot tokens" in the past, the UNI token of Unichain has indeed gained certain empowerment and demand pressure. However, compared with the direct dividend model that has been highly demanded by the market recently, the "chain empowerment" that has taken a detour is more like scratching the itch of investors. At the same time, in terms of staking income, we also need to wait for further observation of the community.

What has Uniswap Labs done in the past year?

As the leader of DEX, every move of Uniswap is watched by the entire industry. Before the announcement of the launch of Unichain, the market was obviously paying attention to several major events of Uniswap, one of which was the launch of version V4, the other was the regulatory disposal issues faced by institutions such as the SEC and CFTC, and the most important thing was how the change in the fee mechanism would empower UNI token holders.

In February of this year, the Uniswap Foundation stated that the release of V4 is tentatively scheduled for the third quarter of 2024. At the same time, Uniswap is also intensively updating and iterating existing products. On March 12, Uniswap successfully launched a non-custodial, zero-cost limit order function on the web app. On April 7, Uniswap announced that the web version has been launched on UniswapX, providing users with MEV protection, gas-free transactions, and no-cost functions for failed transactions. It also includes the launch of web plug-in wallets and the launch of domain name services.

In terms of supervision, the SEC issued a warning to Uniswap Labs in April this year and planned to take enforcement action against it. In September, the U.S. Commodity Futures Trading Commission (CFTC) also issued an order to Uniswap Labs, accusing it of providing illegal digital asset derivatives transactions.

Related reading: "U.S. courts have always "protected" Uniswap, and it is sued again. Can it win the SEC this time? 》

On February 23, the Uniswap Foundation issued a statement saying that it would release a proposal to "activate Uniswap protocol governance", which would distribute any protocol fees in proportion to UNI token holders who have pledged and delegated their voting rights. As soon as the news came out, the price of UNI tokens skyrocketed, rising from $7 to a maximum of around $12 overnight. But until May, the fee switch was still not turned on, and there was even news that the Uniswap Foundation announced the postponement of the vote on the fee mechanism under pressure from a VC institution.

Related reading: "What happens if Uniswap turns on the fee switch? 》

This time, Uniswap wants to consolidate its liquidity moat through the chain built by its own team. Will it bring hope to UNI token holders?

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