{"id":248572,"date":"2021-05-12T20:00:00","date_gmt":"2021-05-12T17:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/vitalik-buterin-says-uniswap-should-become-an-oracle-token\/"},"modified":"2021-05-12T20:00:00","modified_gmt":"2021-05-12T17:00:00","slug":"vitalik-buterin-says-uniswap-should-become-an-oracle-token","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/vitalik-buterin-says-uniswap-should-become-an-oracle-token\/","title":{"rendered":"# Vitalik Buterin says Uniswap should become an oracle token"},"content":{"rendered":"

“# Vitalik Buterin says Uniswap should become an oracle token <\/strong>”
\n<\/p>\n

Uniswap\u2019s native UNI token can greatly enhance its utility by becoming a pricing oracle for stablecoins, according to Ethereum co-founder Vitalik Buterin.\u00a0<\/p>\n

In a proposal submitted to Uniswap\u2019s governance platform, Buterin said<\/a>\u00a0that a successful decentralized finance, or DeFi, ecosystem relies on a \u201chighly secure pricing oracle,\u201d noting that algorithmic stablecoins, synthetic assets and collateralized loans all depend on oracles. The problem, however, is that Uniswap currently doesn\u2019t provide an oracle for the price of ERC-20 tokens in the truest sense. <\/p>\n

\u201cThis is a problem,\u201d Buterin explained, adding that \u201cAlgorithmic stablecoins need an oracle for the price of ETH\/USD to be able to function, and they specifically need an oracle for USD the off-chain fiat asset, and not any specific on-chain instantiation of USD.\u201d<\/p>\n

His proposal:<\/p>\n

\u201cI recommend that Uniswap and the UNI token step in and provide such an oracle (eg. modeled after the Augur or UMA design), specialized to providing price data that\u2019s robust and extremely costly to manipulate and attack.\u201d<\/p><\/blockquote>\n

Although Chainlink is being utilized by many projects, the leading oracle provider would be better served with a \u201cmore minimalist alternative that\u2019s more laser-focused on optimizing incentives and maximizing cost of attack.\u201d UNI is in a prime position to complement Chainlink, he said.<\/p>\n

Uniswap brings value for many reasons, not the least of which is its large market cap. As Buterin noted, Uniswap and Chainlink are the two largest Ethereum-based projects. Interestingly, Uniswap has just recently overtaken Chainlink as the largest DeFi protocol, with a total market capitalization for UNI of $22 billion. LINK, meanwhile, is valued at $20.1 billion.<\/p>\n

By supporting pricing oracles and, hence, a more robust stablecoin ecosystem, Uniswap would be in a better position to generate much higher revenue via trading fees. “If we start to also see high-volume and robust synthetic assets emerge on chain, then this would be even more valuable for Uniswap,” Buterin said.\u00a0<\/p>\n

Buterin\u2019s proposal has received over 11,600 views and 50 replies at the time of publication. <\/p>\n