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During the recent pullback I managed to get a decent entry on Uniswap’s governance token UNI. This was part of a “forced effort” to allocate more capital to altcoins. There are rumours circulating that Uniswap v4 is going to be released imminently, as in days not weeks. There is also the improved regulatory environment under the Trump administration. Uniswap was one of the projects targeted by the SEC “regulate via enforcement” mantra under Gary Gensler’s term. Uniswap v4 will include a plugin type system which will allow 3rd party developers to write hooks. This will enable all sorts of custom liquidity pools and trading mechanics. I’ve experimented in the past with hooks on Uniswap and Balancer and I think there’s potential for it usher in a new era of digital asset distribution. On the negative side there is some distortion of interests in the capital raised by VC funding in exchange for equity. It’s still unclear as to how value will be accrued and distributed to UNI stakeholders. Current valuation is around $7.5B market cap. There is potential significant upside here if Uniswap can retain the role of the leading decentralized digital asset exchange.
Holding time for this trade depends on the markets. If we see a narrative shift before the end of the year to the Eth ecosystem, DeFi and Uniswap then I may exit early. I’m also happy to hold this for 10 years and see how it plays out if the best of the bull market is behind us. Biggest risk for me is a misalignment of core values. Uniswap open sources code but does it with a business license, which is awful. There’s also questions about frontend censorship and the fee switch on. Things move fast in crypto and something could come along that just “does it 10x better”. While that seems somewhat unlikely from a technical perspective, in terms of AMM smart contracts, there is risk that something new and shiny captures attention, TVL and trading volumes.
There was a wick down to below $90k in search of liquidity. Hoping to see another leg up in the next few weeks. Sentiment seems fairly neutral, we’ve had a leverage flush, time to start grinding back up again. A lot depends on Saylor and if we can sustain a consistent bid. Some talk about the $6.5B Silk Road Bitcoin getting sold before Biden leaves office but so far it hasn’t moved: bc1qa5wkgaew2dkv56kfvj49j0av5nml45x9ek9hz6 I wrote a tool to keep an eye on that here:  Social links are below and if you enjoyed this newsletter I would appreciate it if you could share this content
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