Will Uniswap v3 Deploy On Avalanche?

Something big is about to happen for Uniswap; its BSL (Business Source License) is about to expire on April 1st, 2023. The BSL basically allows people to view the Uniswap code and allows the code to be used in non-commercial and non-production cases. However, when the BSL expires in about a month, it means that anyone will be able to fork and utilize the entire Uniswap protocol.

Knowing that this is about to happen, the folks of Blockchain at Michigan created a proposal to have Uniswap v3 deploy on Avalanche prior to the BSL expiring. Let’s take a look at why they created this proposal.

As you probably already know, Uniswap is one of the largest DEX’s in the crypto-sphere. Anyone that trades on Ethereum has used it at some point and it’s also deployed on Polygon, Optimism, Arbitrum, and Celo blockchains. So, of course, it would be great to have it deployed on Avalanche as well.

Here is a breakdown detailing some of the major reasons that the Blockchain at Michigan folks provide as to why Uniwsap should deploy on Avalanche:

1. Urgency – The BSL is expiring and after April 1st, anyone can fork Uniswap which could cause the market to dilute because copycats will be launching all over the place. This means it’s imperative for the OG Uniswap to get ahead of its competition and retain as many users as possible and deploy on solid blockchains prior to this happening.
2. Growth – If/when Uniswap launched on Avalanche, it could take advantage of Avalanche’s unique 3-pronged infrastructure that is optimized for scalability and interoperability consisting of the X, P, and C-chains (also known as the primary network). Avalanche also has a lot of validator nodes and has rarely (if ever) experienced any network downtime. These are signs of a robust network primed to grow in the near future.
3. Subnets – Avlanche’s subnets allow developers to create application-specific blockchains that won’t bog down the primary network. This means that Avalanche is highly scalable and ready to onboard new projects that would all be able to benefit from the deep liquidity of a popular DEX such as Uniswap. Subnets are also highly customizable meaning that novel protocols can easily create their own subnet which would further enrich the Avalanche ecosystem.
4. Brand Power – Uniswap is very recognizable and will be able to draw liquidity from other DEXs and chains. But even with its strong brand recognition, Uniswap will have competition from Trader Joe. However, this might be a good thing that could spur innovation amongst popular DEXs. Both Trader Joe and Uniswap have concentrated liquidity features, but these features can always be improved to include free auto-rebalancing or built-in risk management strategies. In other words, which protocol would have the best products for its users with the lowest fees?
5. Partnerships and User Adoption – Avalanche has way too many partnerships to mention here which is bullish for a large DEX because new money from new sources will soon be coming into Avalanche and someone will have to provide liquidity and do all those token swaps.

In addition to the major reasons listed above, there is also much debate going on about which cross-chain messaging service to use, which allows interoperability between blockchains. In short, the Blockchain at Michigan proposal recommends LayerZero as the cross-chain messaging protocol. You can read more about that discussion in the second half of this thread here.

Final Thoughts

Whether or not Uniswap users vote to deploy on Avalanche, it will definitely be interesting to see what happens when Uniswap’s BSL expires on April 1st. Will we see dozens of clones that fragment the market? Will users keep their funds concentrated on the current chains and current iteration of Uniswap? If Uniswap does deploy on Avalanche, will it foster innovation wars with Trader Joe? What kinds of features could come out of a race like that? Only time will tell.