Will there be a crisis if UNI stops liquidity mining?

On the morning of November 17th, Beijing time, the two-month Uniswap initial liquidity mining activity officially came to an end. Before the end of the mining, Uniswap's liquidity once exceeded US$3.1 billion.

Although some community members had previously proposed to continue UNI mining, the proposal has not been passed to date because the required number of people for UNI governance has not been reached.

A few days ago, there were constant meetings and news about "whether UNI will stop liquidity mining". UNI holders also used their UNI to vote for their own choices, and the price of UNI also rose all the way, but failed to save the situation. It also really let people see their role as governance tokens.

According to CoinGecko data, the number of UNI in circulation on the market is 215,057,920, and the total number of UNI issued is 1 billion.

Uniswap Price Chart

After the suspension of liquidity mining, it is uncertain whether UNI will continue to attract investors in other ways, but what is certain is that it cannot get rid of the blame for the governance token.

In fact, what everyone is most concerned about is whether top competitors such as sushi, curve, and bancor will have a chance to counterattack after UNI stops liquidity mining? Will UNI make any big moves next?

What I can be sure of is that before Uniswap makes any satisfying big moves, liquidity mining projects such as sushi, curve, and bancor will definitely have opportunities, but we need to consider the proportion of the opportunity.

Previously, UNI distributed at least 400 UNI to each person in September, totaling 150 million UNI, which is equivalent to a one-time airdrop of more than 1 billion US dollars. Each user received 2,800 US dollars.

This may be the largest airdrop ever in the cryptocurrency market.

It instantly attracted the continuous attention of users, and decentralized exchanges also attracted a large number of users. More and more project parties began to choose to launch project tokens on Uniswap. The discussion about CEX or DEX became a hot topic at major blockchain summits.

After Uniswap retreated to the liquidity mining sector, will other coins have a chance to catch up? I think this is still difficult.

The biggest innovation that Uniswap brings to us is actually the decentralized exchange, which allows people to easily participate in digital currency exchange, greatly weakening the dominance of centralized exchanges.

DeFi is not just about liquidity mining. Businesses such as lending, insurance, and funds are gradually migrating to the chain. People care more about whether a decentralized application is diversified and easy to use, which is no longer the case a few months ago when they knew nothing about it.

Number of Uniswap users as of October 13

If projects like sushi, curve, and bancor want to fight back, they need to make greater innovations to have a chance. Otherwise, they will rely on the old methods. There were YFI and AAVE in the past, and Compound and Marker Dao in the future. It is still difficult for users who want to migrate from Uniswap to Uniswap at present.

I think UNI's cessation of mining may be more beneficial to the market, allowing it to return to the fundamental concept of governance tokens. If other innovations or big moves are made in the future, its value will continue to increase with the frequent market usage and the deflation of tokens.

This is also one of the reasons why I am optimistic about it in the long run. The amount of its release is still some distance away from the total amount. Uniswap still has many opportunities, but it needs to consider how to better combine governance and tokens and let the users who participate in it generate benefits. If this decentralized exchange only uses GAS fees as a way to make profits, I am afraid it would not have created such a large market today.

I personally feel that when the proposal to withdraw liquidity mining was put forward, the main creative team had already thought of the next proposal, but we still need to wait for official notification on when it will be issued. Maybe when it is passed, it will lead to the arrival of the next bull market!