In one post, Vitalik Buterin suggested using the decentralized exchange (DEX) Uniswap for additional oracle functions. The UNI token is currently already providing Oracle data, but only for the price of ERC-20 tokens.
Data outside of the Ethereum ecosystem, especially for USD, is currently insufficient. Based on Uniswap’s privileged position, Buterin suggests that UNI is well positioned to incorporate a wider complement to oracle services.
“That’s a problem: Algorithmic stablecoins need an oracle for the price of ETH / USD to workand they specifically need an oracle for USD, the off-chain fiat asset, and not a specific on-chain instantiation of USD. “
The response to this proposal has been largely positive. However, given Uniswap’s stuttering V3 launch, the question is whether the team can do such an integration.
UniSwap is better positioned than Chainlink
Oracle acts as a bridge between blockchains and the outside world by providing data for smart contracts. In order for smart contracts to work as intended, they need this connection to the outside world.
Buterin described the leading oracle, Chainlink, as useful. He acknowledged, however, that the broad approach to the oracle problem has several drawbacks. He argued that in this case he preferred a less complex solution:
“It also seems desirable to complement Chainlink with a more minimalist alternative that focuses more on optimizing incentives and maximizing attack costs.”
Making the cost of an attack prohibitive is a strategy for protecting the network. Because of this, Buterin points out that large cap tokens like Uniswap are preferred as the cost of buying half of UNI’s market cap is high.
UNI V3 got off to a disastrous start
After a year of development, Uniswap V3 was rolled out earlier this month. It added concentrated liquidity, capital efficiency, active liquidity, area orders, non-fungible liquidity, flexible fees, and a license to use its open source code.
However, users reported wallet connection issues on launch day. The problem seemed to affect a variety of different wallets, from MetaMask to Coinbase to hardware wallets.
A Reddit user also mentioned the complex user interface, which they believe helps inexperienced users fall prey to scammers.
“Great job by the Uniswap folks, but it’s 2021 and we (the crypto community) need to find a way to roll these things out in a beginner-friendly way so people don’t get totally ripped off.”
Perhaps the most significant point of contention was gas charges. The developers assured users of a reduction in gas charges, but one user points out that they have increased by 102% on average compared to V2.
Buterin has given his reasons for expanding UniSwap’s capabilities. But the truth is that UNI still has to refine its bread-and-butter functionality.
Get one Edge on the cryptoasset market
Access more crypto insights and context in every article as a paid member of CryptoSlate Edge.
Sign up now for $ 19 / month. Discover all the advantages
Do you like what you see? Subscribe to updates.