On the move from Balancer to Uniswap
Why are we moving from Balancer to Uniswap?
Context
Initially, we launched the liquidity for the $ALLUO token on Balancer because of its ability to handle uneven pools (e.g. 80–20 ALLUO-ETH pool) instead of the historical 50–50 pioneered by Uniswap.
The ability to have an uneven pool minimising impermanent loss was particularly important in light of the fact that historically, $ALLUO lockers were automatically locking their tokens inside a 80–20 ALLUO-ETH pool.
Given that locking now simply locks the token away without providing liquidity, this has become less important.
What is happening now
It is worth re-iterating that we still like Balancer, however, many other protocols look to Uniswap for token listings (ie does this token have any liquidity on uniswap) which means not being on Uniswap is a detriment.
As an example, Balancer themselves have liquidity on uniswap for the BAL token beyond the liquidity they already have on Balancer itself.
This is really the primary reason why we wanted to change the location of our liquidity, from Balancer to Uniswap.
We also expect that it will be easier for us to list on Coingecko and Coinmarketcap now that we are on Uniswap, simply because of the much greater trading activity on Uniswap compared to Balancer (more than 10 times the daily volume)
Why are we not adding liquidity to Uniswap in addition to Balancer?
This is something we could also have done but given that our liquidity pool is relatively small, we didn’t want to split liquidity at this stage and let arbitrage bots profit from liquidity being in two places at the same time.
Wen ser?
This is already live as you are reading this
$ALLUO can now be bought and sold on Uniswap.
Simply go to https://app.uniswap.org/#/swap
When clicking on Select token, add $ALLUO’s ethereum address: 0x1E5193ccC53f25638Aa22a940af899B692e10B09 in the search bar.
From this:
To this:
And then click on Alluo.
You are now ready to buy or sell $ALLUO for $ETH, $USDC or any other coin that is listed on Uniswap.
For instance, you can buy $100 of $ALLUO using USDC.
Who will be providing the liquidity on Uniswap?
Initially, only the Alluo DAO treasury will be providing liquidity for the ALLUO-ETH pair.
Of course, that doesn’t mean that others cannot go and add liquity side by side with the treasury but we won’t be providing incentives to that pool just yet.
What does it change for Alluo users?
This change doesn’t impact the mobile app or the web app users.
What does it change for $ALLUO token holders or lockers?
For $ALLUO lockers, it simply means that they won’t be taking any impermanent loss going forward given that locking their $ALLUO tokens will not involve any liquidity providing.
Users locking 1 $ALLUO token will be able to unlock 1 $ALLUO token once the locking period has elapsed — as a reminder, $ALLUO locker will be rewarded with the protocol revenue in the form of CVX/ETH per our earlier article here.
Will we be back to Balancer one day?
That is something we would actually like because Balancer, unlike Uniswap also can provide incentive to people providing liquidity (in the form of the BAL token).
We would expect this to be subject to another DAO vote though.
For instance, the DAO members could vote for the purchase of a certain amount of AURA token (see aura.finance) which would enable the Alluo DAO to direct BAL incentives to an 80–20 ALLUO-ETH pool.
If that were the case, would we stop providing liquidity on Uniswap?
That is unlikely given that we will want continue to ensure good price tracking on Uniswap for the reason we have mentioned above.
It is possible though that the bulk of the $ALLUO token liquidity would be eventually on Balancer if we managed to direct an interesting amount of BAL tokens to our pool.
Wouldn’t that create some of the arbitrage opportunities we have mentioned above?
Yes, although this is something that we could mitigate at that time because it is likely that we would have more liquidity than today and we could manage the uniswap pool with Gelato/Arrakis to ensure that the liquidity would remain around the Uniswap price (for more on that topic, you can read about Arrakis here)
