UNI liquidity mining is coming to an end, where will the locked 2.6 million ETH go?

Editor's Note: This article comes fromGolden Finance, reprinted by Odaily with authorization.

Editor's Note: This article comes from

Golden Finance

Golden Finance

, reprinted by Odaily with authorization.

The initial liquidity mining of Uniswap governance token UNI will come to an end. According to official news, Uniswap will end UNI liquidity mining at 8:00 on November 18.

Current data shows that the total lock-up amount of the UNI liquidity mining fund pool exceeds US$2.4 billion, including four ETH trading pairs. Since the UNI fund pool is added to the liquidity at a ratio of 1:1, the value of ETH currently locked is more than 1.2 billion U.S. dollars. Based on the current price of 465 U.S. dollars, it is about 2.6 million ETH.

The ETH locked in the UNI fund pool has two parts of income: UNI token rewards and transaction fee dividends.ETHThe Uniswap V2 white paper shows that the Uniswap transaction fee is 3 per thousand, and the dividends distributed to liquidity providers are 5 per thousand. According to Uniswap.info data, the monthly trading volume of Uniswap exceeded US$15 billion in September, and exceeded US$8.6 billion in October.

Therefore, Uniswap's monthly handling fee dividends are also relatively considerable. Although the dividend income will become higher as some users unlock ETH after the liquidity mining is over. But it is conceivable that after the end of UNI liquid mining, a considerable part of the 2.6 million ETH locked in the UNI liquidity pool may return to the market.

However, the end of UNI liquidity mining seems to be a positive for UNI tokens, because the output of UNI will decrease, reducing selling pressure.

exactly how much

It is currently unknown whether it will be unlocked. DeFiance Capital manager Wangarian made a simple estimate on Twitter a few days ago. Assuming that 50% of the locked ETH will leave due to the stop of liquidity mining, then there will be an outflow of ETH worth 600 million US dollars, about 1.2 million. This part of the outgoing ETH may have three destinations: 1. Pledge to other places, such as DeFI projects such as Sushi or ETH2.0; 2. Store in the wallet without moving (unlikely); 3. Sell and replace it with other token currency. Wangarian believes that a large number of ETH will choose the third place above, which is to sell.

Therefore, the coming end of UNI liquidity mining has received widespread attention from the community and officials.