Ethereum’s Vitalik Buterin is making a strong case for Uniswap’s native, UNI token.
While talking about the importance of a highly secure price oracle in the success story of the decentralized finance realm, Ethereum Founder Vitalik Buterin went on to point that DeFi protocol, Uniswap’s native token ‘UNI’ is in an “excellent position” to be a token for an oracle.
The Ethereum executive called for the need of a robust token-based decentralized oracle for a deFi project on the Uniswap Governance Forum today. He mentioned that it should be based on a token with a large market capitalization.
Uniswap – Highly Secure Oracle System?
While talking about the importance of efficiency of an oracle, Buterin stated,
“An inefficient oracle can always be augmented with a game where one party claims a value and only if another party disagrees is the oracle actually called. Cost of attack, on the other hand, is absolutely essential to maximize, and thus market cap is key. “
The founder then doubled down on two of the high market cap tokens on Ethereum which are Chainlink [LINK] and Uniswap [UNI].
Buterin asserted that the supporting oracles would not just be an act of “altruism” for Uniswap but would also benefit the decentralized exchange with a stablecoin ecosystem that is strong.
Chainlink has dominated the oracle realm for some time now. However, there is a need for a “simple alternative specialized for high-value”, according to the exec.
Meanwhile, Uniswap v3 has been touted as heavily optimized toward ultra-high capital efficiency for stablecoin, hence, it is likely to draw very high amounts of fee revenue from these trades. He also went on to add that if the volume picks up and the robust synthetic assets surface on-chain, then this would be a more bring about more valuable prospects for Uniswap.
Buterin also stated that while the base layer of Ethereum needs to remain governance-minimalist, layer 2, on the other hand, should be more ambitious and that Uniswap, which happens to be one of the largest decentralized exchange on the Ethereum ecosystem, could also take on more responsibilities which includes price oracle offerings.
According to Buterin, this could be a potential step towards Ethereum’s objective of not just a decentralized finance ecosystem and also an increasingly decentralized governance [DeGov] ecosystem.