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Gelato Network launches management token for Uniswap v3

gelato-network-launches-management-token-for-uniswap-v3

Gelato Network revealed the details of its management system G-UNI Uniswap v3. The system is created to resolve the complexities of active management on the protocol.

A more user-friendly experience when providing liquidity

While Uniswap v3 allows liquidity providers to earn higher fees by focusing their funds on specific prices, it also exposes them to the risk of impermanent loss if the trading pair’s prices move beyond the range set by the provider. The blog post explains that G- UNI’s auto rebalancing brings the benefits of concentrated liquidity. But with the option of passively managing the position in a way that is more in line with Uniswap v2. This allows users to earn additional fees without having to rebalance the pool themselves.

Using an oracle network that reviews, prices and rebalances the position ranges of the liquidity pool every half hour, G- UNI, attempts to maintain a liquidity range of 5-10% within the current price of an asset pair. Trading fees are automatically reinvested by G- UNI to increase returns.

The management token will not only benefit liquidity providers

Although G- UNI will benefit passive liquidity providers, it seems that other DeFi protocols will benefit the most. G- UNI is an ERC-20 token rather than an NFT, which opens it up to a wider range of potential DeFi apps. Many lending platforms accept liquidity pool tokens as collateral, but are not yet ready for positions represented as NFTs; G- UNI will allow them to onboard v3 liquidity positions more quickly.

Uniswap has been evolving their protocol a lot lately, with the launch of Uniswap V3 and also the accepted poll to support the layer 2 solution Arbitrum.

What do you think?

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