Uranium : vision, strategy, 700M years
Hi all and thank you for your patience, we’ve needed some time to put everything together and we didn’t want to rush this one. What you’re about to read should answer most of your questions about what’s been happening behind the scenes since the launch of V2, and what we’ve got planned for the future so that Uranium can grow and provide its low friction, capital efficient solutions as a core building block to DEFI with an initial focus on delivering this experience on the Binance Smart Chain (BSC).
From listening to the community, we feel that some people have forgotten, or possibly never understood our primary goal of setting up pools and the establishment of an innovative capital efficient AMM/DEX at the heart of the Uranium ecosystem, that is able to compete with the likes of PancakeSwap, MDex, Sushi etc. From the day 1 conception of Uranium, we have planned and built our entire ecosystem around that goal and will continue to improve and expand to reach it.
Remember, while Uranium’s ecosystem will continue to grow for the AMM our primary source of revenue will be from the trading volume that we can get on our platform.
One of the primary features of Uranium is the U235 token and the dividend rewards. The potential to be a shareholder in Uranium and receive consistent, passive income just by holding U235 in your wallet is still one of our best features and what sets us far apart from any other AMM. The creation of U235 and U92 that is used to farm it, create multiple options for Liquidity Providers : they may choose to farm or autofarm their rewards back into owning more LPs, farm U92 to earn and hold U235 to gain long term ownership of platform revenue or monetize their U235. Every investor, liquidity provider and user has a different investment horizon and strategy, the system must find a way to compensate for all risks taken and all benefits given in an equitable and stable fashion. U235 holders own the platform, and that is a long term horizon linked to future growth.
The 4% deposit fee farms and pools were always going to be a great way to kickstart Uranium both in terms of rewarding early participants in the project with a round of rewards paid to U235 holders making for some immediate returns in addition to their long term benefits through ownership of platform fees. The launch proved itself with a 100M TVL in 3 days, and enough funds to distribute over 2M in deposit fees to Money Pots. While new pots will keep being launched, and we encourage everyone to take advantage of the opportunity to join them, the rewards for U235 are in their role as the governance and dividend token of the platform, not only in their dividends for the next few days.
This is why our primary goal has always been to be an AMM first, and attract enough liquidity and then paired with trading volume on our platform that it becomes self-sustaining and with high enough fees generated over time to sufficiently reward our U235 holders. That said, we are concerned that some community members have underestimated exactly how much trading volume is required to generate a large amount of fees.
For each $1 million in daily trading volume, the dividends available to the Money Pot will be $1200 per day, $36,000 per month and $440,000 per annum.
PancakeSwap is the current DEFI leader with ~$1.5B daily trading volume, as long terms goals we would like to see higher volumes (from the few high volume pairs which we have identified) but achieved requiring less TVL, due to lower swap fees driving larger transaction volumes creating a more capital efficient model. As an example, 10% of Pancakeswap’s current swap volume is $65m of annual dividends paid to the Money Pot in hard tokens (BNB, BUSD and the like).
Other than trading and deposit fees, we do have other plans for generating more revenue for the Money Pot and incentives for holding U235. The one thing that is clear to get U235 you will need to earn it by working it within the Uranium universe, and with each passing day the ability to secure Uranium U235 will go down, and it will develop more as a rare asset distinct from U92. Some of these new features are currently in development and some are still in planning but given the nature of this space and the potential for a few of them being game-changers in the space, we will keep these under wraps for now. As soon as we are close enough to launch them we will make a more specific announcement.
How we will achieve more trading volume:
The biggest incentive that will drive more volume to Uranium is simply that we have lower trading fees than other AMMs on BSC. Most have a 0.20% swap fee and go up from there, some at 0.30% and so on. With swap fees of 0.16% (20% lower than the leading exchanges), volume will build as we continue plugging Uranium with DeFi partners and build traffic directly to Uranium.Finance, our low spread, low slippage pools will stimulate trading on Uranium. This has been mathematically proven with the trading that’s already taken place on Uranium and we have most BSC trading aggregators already implementing our router (by the way, feel free to ask them on Twitter when our router will be available on their dex aggregators https://twitter.com/OpenOceanGlobal , https://twitter.com/1inchNetwork , https://twitter.com/matchaxyz …). Once that integration is complete, much more trading volume will flow through Uranium. The future of DeFi is lower fees, capital efficiency and higher volumes, and any AMM moving in the other direction is not working to secure it.
Currently though, other than being still relatively unknown, our biggest limiting factor to facilitating and attracting the large amounts of trading volume required, is a lack of liquidity with the popular trading pairs, and that’s why the 0% farms are key to the strategy. In addition to the anchor 4% pools, the 0% pools can more easily bring in the larger liquidity needed for low price impact, low slippage trades even while providing relatively low returns to those liquidity providers. This way they can also be used as vaults from yield aggregators like ValueDefi.
We’ve heard the community’s concerns around the 0% vaults and the requests to remove them but we assure you that we need them to be able to become a leader in the AMM space. Currently the 0% pools make up about 2.5% of the total emissions, so that small amount of U92 rewards will never be enough to justify big dumps of the price, but it still incentivises providing more liquidity, without which there can be no platform.
The other big factor regarding trading volume and liquidity is the fact that we only have a small number of trading pairs, so there aren’t a lot of trading that people can do on our platform until we add more of the popular tokens that people want to trade. Today we are adding ADA and DOT, and others will come soon, but what you will see is a focus on high quality pairs and partner projects as we aim to build up meaningfully liquidity and volume. With Uranium, we have created a more capital efficient model for high volume, high liquidity pairs, that will better compensate LP providers and swap users.
In summary, we are working on finding good balance with everything above, and getting the timing right to make sure that our investors are well rewarded over time, while also being an attractive platform for people and other platforms to bring their liquidity and trading to as we grow.
We are facing various challenges along the way and some are outside our direct control since we are now dealing with multiple 3rd parties who need time to integrate with our router and platform. We ask that you bear with us as we work night and day to build out all the new features and partnerships. We understand that crypto moves incredibly fast and sometimes it can feel like new features and updates are taking a long time, but they do take a lot of work and we simply can’t rush some things.
Finally, even though some of you disagree with our decisions, we can assure you that everything we are doing is in the best interest of the Uranium AMM and ecosystem moving forward. The half life of Uranium is 700M years, while ours is not quite that long we definitely have big long term goals for this project. We won’t reach them overnight but if all goes well, we will reach them, hopefully with all of you at our side :)
