Polygon has further strengthened its grip on the DeFi ecosystem after members of Uniswap voted to deploy smart contracts.
The third version of the decentralized Automatic Market Maker, Uniswap V3, will be rolled out on Polygon ‘within a few days’. This was recently revealed by a Twitter announcement.
The process for implementing Uniswap on Polygon started about a month ago. A proposal was then made on the DEX governance protocol. The motion passed with 72 million votes in favor and 503,009 votes against. This indicates that this move is widely accepted among UNI holders.
Polygon’s developers had reportedly sounded both insistent and desperate in their attempt to land Uniswap. They granted the DEX special treatment and allocated significant funds for its development.
Scalability solutions lighten the load on the Ethereum mainnet, providing cheaper and faster transactions. Since the congestion issues facing Ethereum are more common, scalability solutions like Polygon are a good solution. They are therefore very popular with DeFi users.
Stimulation of liquidity
Several Ethereum L1s such as Aave, Curve and Sushiswap, had already implemented their smart contracts on Polygon. The L2 had previously suggested that the ecosystem felt “incomplete” without DeFi’s project.
In its proposal, the platform also announced its intention to allocate approximately $20 million to the protocol to boost liquidity.
The tradable allotment would include up to $15 million for a long-term liquidity mining campaign and the rest for a dedicated DAO. This will focus on the overall adoption of Uniswap on Polygon, the proposal said.
Community enthusiasm was already there when 7.79 million Uniswap holders voted yes to the implementation in the first ballot in November. Only 25,000 were needed.
In a tweet, Polygon co-founder Mihailo Bjelic reiterated Polygon’s mission to make Ethereum accessible and affordable.
Huge thanks to the Uniswap community and kudos to Uniswap Labs for rapid deployment, very impressive!
We’re going back to the original promise of Ethereum; its #1 app is again affordable to everyone! 🤗💜 https://t.co/sHtpZfAGhQ
— Mihailo Bjelic (@MihailoBjelic) Dec 18, 2021
Consequences of the implementation
Proponents of the Layer 2 solution are already wondering what the future holds. In fact, according to one Twitter user, central exchanges would benefit from Polygon, due to better price availability than offered by the global market makers.
@uniswap daily ETH/USD volume is >$1B on mainnet daily which is more than Coinbase even with heavy gas cost.
It’s soon going live on @0xPolygon which has near 0 gas cost.
Will Polygon become the main hub for swaps using the most advanced swapping algorithm ever created?
— samyakjain.eth (@smykjain) December 14, 2021
A recent report from Alchemy found that nearly 3,000 dApps had been deployed on Polygon by the end of October. That was just 30 last year.
To further encourage such development activities, Polygon also launched a $200 million investment fund with Seven Seven Six. The fund will focus on Web3 development on the Polygon ecosystem. Particularly blockchain-based social media projects and gaming.