Centre’s USDC has become the second largest stablecoin in DeFi. While it has maintained its 1:1 peg with the US dollar well, its “blacklist” functionality comes with a heavy tax on users, amounting to, by my estimate, an extra $3.6M spent in transaction fees in December 2021 alone.
The free-rider problem arises when a good or service has private costs and non-excludable public benefits. A classic example is a firework show. Fireworks can be enjoyed by anyone in a particular area regardless of whether they pay for it (it’s hard to stop people from looking at the sky if they don’t have a ticket).
Should Uniswap be an oracle protocol? Always has been.
In May of this year, Vitalik created a post on the Uniswap governance forum called, “UNI should become an oracle token.” He argues that there is a need for oracles to provide off-chain data, and that UNI is in a good position to provide an alternative to Chainlink for high-value, latency-tolerant use cases.
Liquidity mining is the practice of distributing governance tokens to users that provide capital to a protocol. Announcing it in May 2020, the first protocol to put this into practice was Compound. Regarding the aim of liquidity mining, the post states: