To attract more liquidity, protocols such as Curve and Balancer have boosting models, but Uniswap V3 lack such designs. Some forks use their own platform token for boosting (e.g., Pancakeswap’s $CAKE), but these still rely on the platform’s own mechanism. Therefore, we want to design a permissionless boosting protocol specifically for Uniswap V3, called UniBoost, which allows any incentivizer who wants to encourage liquidity provision to provide rewards directly through UniBoost. For example, as the issuer of $SAMPLE token, I want to incentivize people to provide liquidity for SAMPLE/USDC and SAMPLE/WETH on Uniswap V3. I can inject rewards through UniBoost, and liquidity providers can stake LP tokens to earn boosted yield.
Generally, while the voting mechanism may increase the threshold, it can also lower the probability of rug pulls. In UniBoost, the insurance mechanism allows incentivizers choose whether to provide high-quality assets as collateral for insurance and set the trigger price in the boosting duration. Once the price is below the set trigger price during the boost period, anyone can terminate the boosting program, and liquidity providers can claim insurance. Liquidity providers can use the insurance to judge whether to provide liquidity themselves.