UniSwapicus-Maximus
Crypto Protocols should model themselves after the Roman Empire because the future is Chaos and the time for Empire building is now.
Let me start by saying: the future in Crypto is chaos and I might be totally wrong.
I was speaking recently with Brendan Asselstine of PoolTogether on the future of governance in a multi-chain world. The complexity of governance once a project expands beyond L1 Ethereum was instantly apparent.
Each Layer, L1, Optimism, BSC, and otherwise, is essentially its own closed world. Bridges in and out of networks are going to be slow and costly at the best of times, and for the consumer, so much choice will abound via arbitrageurs, new solutions, and marketing that it won’t be obvious there exists any value in leaving the environment they currently exist in.
Anyone who believes in evolution knows what will happen next: different environments have different ecosystems, different parameters, different social networks, different tools. What works on L1 Ethereum, will have to work slightly differently on L2. Who uses what, how much liquidity is available, what primitives exist, will most likely never be universal or at feature parity across networks.
This means evolutionary pressure will exist upon all protocols in each “layer” or “island” independently. In fact, I quite like the island analogy for the different layers, because the Islands are where we see the most evolutionarily extraordinary adaptations. From flightless birds to prehistoric dragons.
What does this mean for Crypto? It means that a protocol that exists on L1, and deploys on L2 will quickly diverge in liquidity, userbase, environment, and their needs and design will also quickly diverge.
For governance this might be a nightmare- how will L1 SushiSwap voters, in the long term, remain aligned with the users of L2 SushiSwap? Is the same governance token going to be used on both layers? In both places? What happens if Uni were to pool inside Optimism, to the point where L1 governance is impossible? What happens, much like the colonies, Sushiswap L2 users get tired of the inaction of L1 users? What if there isn’t overlap between the two? No taxation without representation right?
For governance though, this is also a huge opportunity. Rome’s strength was at its greatest when it was well governed by a diverse and wide-reaching participant base.
I mean to keep this short, and I will.
The conquest of Italy by the Roman Empire looks very much like the conquest and challenges playing out on L1 Ethereum today. The future, of course, is the colonies. North Africa, England, Sicily, Byzantium.
The Roman empire has many similarities: power is isolated in different places, separated by slow communication channels. Long-term success depends upon the domination of many places that are difficult to link up. Colonies are sources of revenue, of strength. Alliances build markets and bring a greater population of users onboard. Successfully holding control over the colonies requires decentralized governance, where locals not only feed the mother empire but also benefit from it. See a parallel in blockchain where L1 provides liquidity, insurance, etc… to activities on Layer 2.
Failure to strike a balance of control will lead to the colonies revolting, offering different incentives to the local population to rebel. You can think of BSC’s Pancake swap as a kind of Carthage. Modeling itself on Uniswap, with similar ambitions and goals, and always a potentially existential threat to the empire.
The analogy is simple, and I won’t tire the reader at this point.
Uniswap should model itself on the Roman Empire. It brings prosperity to everyone through effective governance, and projection of power and order through the known “layers”. It is an expensive process, it requires many layers of governance, but it is ultimately the goal that every AMM will have on every network in one way or another.
Let's discuss. @dennisonbertram
