Unstoppable Liquidity

Market Monday for December 9, 2019
Dec 9, 20192 min read

Dear Crypto Natives,

I’m going to call it now. It’s Uniswap week on Bankless.

Today’s weekly assignment below the fold—zap liquidity to Uniswap. Tomorrow’s tactic—how to use Uniswap to make money (you don’t want to miss it).

Why Uniswap?

Uniswap is the most Bankless money protocol on Ethereum—it in my top 5 fave protocol list behind BTC, ETH, and MKR. It’s unstoppable liquidity.

So how did I react to the news last week that the team behind the Uniswap protocol geo-blocked their official front-end to the protocol? That the Ethereum critics now say this is proof DeFi is a sham? That if you’re located in North Korea or Iran you see this when accessing Uniswap.exchange?

I shrugged then smiled.

This does the opposite of what the critics proclaim.

It demonstrates how unstoppable the protocol truly is.

It tells me these critics don’t actually understand the system they’re criticizing.

Within minutes a dozen new Uniswap interfaces surface. Like this one. Or this one. Many hosted on peer-to-peer file systems rather than corporate-controlled clouds.

If you have an ENS friendly browser like Opera or are using MetaMask you can access one of these decentralized interfaces at http://uniswapexchange.eth/ in your browser bar. Anyone else can type http://uniswapexchange.eth.link. Each of these interfaces are accessed through a censorship resistant domain hosted on Ethereum instead of DNS.

Blocking the official interface does nothing to block Uniswap.

It only makes it stronger. More decentralized.

How’s this possible?

Some point to the fact that Uniswap’s front-end is open source so anyone can fork it and host their own version. But that’s not what makes Uniswap unstoppable. Say all the code that ran Facebook.com was open source, could you recreate Facebook? No. Facebook’s state—its network effect—stays with Facebook.com.

But Uniswap’s state lives on chain. Not on a server controlled by a centralized entity. On 1000s of servers spread across an economically secured decentralized public network. Uniswap is a liquidity robot that lives on Ethereum. No external oracle. No price feeds. No other dependencies—just Ethereum.

With Web apps like Facebook—a centralized entity owns the state.

With Money protocols like Uniswap—a public network owns the state.

This what makes Uniswap unstoppable. That’s the paradigm shift.

It means a single interface isn’t important for decentralized protocols. Uniswap’s liquidity isn’t tethered to an interface or a server. As long as the liquidity robot keeps running onchain any of the machines or interfaces using it are unaffected.

But maybe you still blame the Uniswap team for geo-blocking OFAC countries. Ok. The beautiful thing here—it doesn’t matter. Because even the Uniswap team doesn’t have the power to block Uniswap.

Uniswap isn’t a company. It’s not a team. It’s not an interface. It’s a protocol. It lives on chain. To stop Uniswap you’d have to stop Ethereum.

Any bank you know work like that?

I say we turn em all into protocols.


Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

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