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Small additions and corrections to the README
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apbendi committed Feb 14, 2024
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<p align="center">
<b>Uniswap V3 protocol fee collection with distribution via UNI staking.</b>
<b>Uniswap V3 protocol fee collection and distribution via UNI staking.</b>
</p>


## What it does

This repository contains contracts which allow Uniswap Governance to enable and manage protocol fees on Uniswap V3. If Uniswap Governance chooses to upgrade to these contracts, it will retain the right to set protocol fees on Uniswap v3 Pools but it will not control the fee assets themselves. Instead, the revenue generated by the fees is trustlessly distributed to those UNI holders who choose to delegate and stake their tokens.
This repository contains contracts which allow Uniswap Governance to enable and manage protocol fees on Uniswap V3. If Uniswap Governance chooses to upgrade to these contracts, it will retain the right to set protocol fees on Uniswap V3 Pools but it will not control the fee assets themselves. Instead, the revenue generated by the fees is trustlessly distributed to those UNI holders who choose to delegate and stake their tokens.

Rewards do no accumulate to stakers in the fee tokens. Rather, rewards accumulate in a token defined during the deployment of the contracts in this repo. The fees accrued by each pool are continually auctioned to any entity who is willing to pay a fixed amount of that token to the staking contract in exchange for the fee tokens accrued by a given pool.

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Each deposit is tracked on a per-position basis. Stakers may add to or withdraw UNI from a given deposit balance, or may alter the governance delegation and reward beneficiary associated with that deposit. A given address can have any number of deposit positions which are each tracked and managed independently.

To take effect, Uniswap Governance must successfully passing a vote to upgrade ownership of the V3 factory to this system. Once transferred to these contracts, that ownership cannot be revoked. While Governance may continue to adjust fee levels and rewards parameters, it irrevocably relinquishes the ability to claim the fees earned for itself. These would forever be distributed to UNI stakers.
To take effect, Uniswap Governance must successfully pass a vote to upgrade ownership of the V3 factory to this system. Once transferred to these contracts, that ownership cannot be revoked. While Governance may continue to adjust fee levels and rewards parameters, it irrevocably relinquishes the ability to claim the fees earned for itself. These would forever be distributed to UNI stakers.

The staking system allows for other contracts to be added as revenue sources for staking reward distribution in the future.

Expand All @@ -38,11 +38,11 @@ The [`V3FactoryOwner`](src/V3FactoryOwner.sol) contract is designed to act as th

The `V3FactoryOwner` has a public method which enables *anyone* to claim the protocol fees which have accrued for a given pool. In order to claim the fees, the caller must pay a fixed amount of a token defined when the `V3FactoryOwner` is deployed (the `PAYOUT_TOKEN`). This sets up a continuous "race" wherein external parties will compete to claim the fees accrued by each pool once it becomes profitable to do so.

Concretely, If the `PAYOUT_TOKEN` was WETH, a third party would claim a pool's fees by paying for them in WETH, which would be sent to the staking contract for distribution to stakers.
Concretely, if the `PAYOUT_TOKEN` was WETH, a third party would claim a pool's fees by paying for them in WETH, which would be sent to the staking contract for distribution to stakers.

### `UniStaker`

The mechanics of the [`UniStaker`](src/UniStaker.sol) contract are heavily inspired by the Synthetix [`StakingRewards.sol`](https://github.com/Synthetixio/synthetix/blob/develop/contracts/StakingRewards.sol) implementation. It manages the distribution of rewards to stakers by dripping those rewards out over a fixed period of time. This period restarts if more rewards are distributed (e.g. by the pulic fee claiming mechanism on `V3FactoryOwner` detailed above). This Synthetix style staking mechanism has been highly discussed in the DeFi ecosystem and should reviewed by any part seeking to understand the mechanics of UniStaker.
The mechanics of the [`UniStaker`](src/UniStaker.sol) contract are heavily inspired by the Synthetix [`StakingRewards.sol`](https://github.com/Synthetixio/synthetix/blob/develop/contracts/StakingRewards.sol) implementation. It manages the distribution of rewards to stakers by dripping those rewards out over a fixed period of time. This period restarts if more rewards are distributed (e.g. by the public fee claiming mechanism on `V3FactoryOwner` detailed above). This Synthetix style staking mechanism has been highly discussed in the DeFi ecosystem and should reviewed by any party seeking to understand the mechanics of UniStaker.

The UniStaker contract diverges from `StakingRewards.sol` in several ways:

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## Development

These contracts were built and tested with care by the team at [ScopeLift](https://scopelift.co).

### Build and test

This project uses [Foundry](https://github.com/foundry-rs/foundry). Follow [these instructions](https://github.com/foundry-rs/foundry#installation) to install it.
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