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$1.1B In ETH Set To Be Freed At The End Of Uniswap Farming In 4 Days

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Uniswap price
Uniswap price

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Uniswap stands as the largest decentralized exchange that the world has ever seen, and has recently conducted its first community call.

This call, in particular, was done with the primary goal of determining the direction of the protocol after UNI farming ends. The conclusion of UNI farming is within less than a week from now, closing on the 17th of November.

No Clear Answer Reached

However, there are some drawbacks with making a decentralized governance system. The community call ended without any clear direction from Uniswap itself, with no clear proposals being submitted that could launch new pools or extend UNI’s farming action.

As a result, it’s a safe bet to say that next week will be an extremely volatile time for the DEX and its coins.

Since the 17th of September, 2020, Uniswap has been operating four liquidity pools based on ETH. These pools have managed to earn a brow-raising 583,333 UNI per week, doing that for each of the pools. The DEX managed to get propelled to the top of the DeFi list thanks to a collateral injection of more than $2.4 billion.

However, this was done primarily thanks to the fact that these incentives were in place. With the mining coming to a close, no clear answer can be given of what will happen to Uniswap.

A Lot Of Volatility Potentially Occurring

As one would imagine, there’s a tangible level of fear among the UNI holders: A fear that the entire token’s market could collapse in itself. It’s happened to numerous other protocols, where users pull out their liquidity then sell their tokens thanks to drying incentives, making DeFi sometimes even more volatile than regular crypto.

Looking at the long term, however, a dramatic market correction could be good for UNI, should it live long enough to appreciate it. As it stands now, UNI is making a bit of a comeback, seeing a top-price of $3.

A Domino Effect Might Occur

Another key point of concern is the staggering $1.1 billion in ETH currently being locked by UNI. Should that be withdrawn from these four pools, then sold or otherwise re-invested into a higher earning protocol, the price of ETH could drop. This is reinforced by how ETH saw a rally just as UNI farming started.

The community call itself was hosted by “Monet Supply,” a member of the Uniswap team. The call started out with a roundup of recent issues regarding governance, but the entire matter was quickly driven towards the elephant in the Uniswap room: The end of liquidity mining for UNI.

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