Tl;dr
Deploy Uni V3 contracts to Asset Hub. This proposal requests funding for the deployment cost of 105,000 USD, payable to GFX labs.

Introduction

@DAOplomats, on behalf of the Polkadot Community, is submitting a proposal to the Uniswap DAO to deploy the Uniswap V3 contracts to the Polkadot Asset Hub. This proposal comes after receiving feedback from the initial discussion we hosted on the forum.
Polkadot will receive its much-anticipated 2.0/Plaza upgrade and deploy EVM-compatible PolkaVM in December. We believe the Asset Hub should enable support for Uniswap V3 contracts as the natural process of upgrading the current Uniswap V2-based asset swapping pallet.

Why Uni V3

A side-by-side comparison of the current asset conversion pallet and Uni V3.

1. Concentrated Liquidity
Uniswp V2 uses the 𝑥*𝑦= k curve where Price: 𝑃 = 𝑦/𝑥. This method is inefficient for tokens that trade in a narrow price range and distribute the liquidity across the entire price range, 0 to infinity.
V3 improves this by introducing price as the root of the two tokens and allowing the concentration of liquidity to a specific price range. This concentration enables more effective trades, reducing slippage. The liquidity is represented by Non-fungible tokens, which make the raged position effective to manage.

2. Capital Efficiency

V2 required the deployment of liquidity in a 50/50 manner, but in V3, the price can be distributed across multiple ranges and provide single-sided liquidity. Liquidity providers can distribute their capital across multiple range orders, enabling on-chain limit orders.

Uni V3 vs Hydration -

Feature	Uniswap V3	Hydration
Liquidity Model	Concentrated liquidity with custom price ranges	Omni-pool with unified liquidity across assets
Capital Efficiency	High, but requires active management	High, with passive management
Fee Structure	Multiple fee tiers (0.05%, 0.30%, 1%)	Single fee across the omni-pool
Cross-Chain Support	Limited	High via Polkadot’s cross-chain messaging

Cost Breakdown

Uniswap deployment cost:

45,000 USD paid to GFX Labs, a technical contributor to Uniswap DAO, responsible for multiple cross-chain Uniswap deployments.

The deployment cost will cover

1. recompiling the code and deployment according to Uniswap DAO Standards.
2. Deployment of a Wormhole read Bridge 
3. deployment registration through onchain vote at Uniswap.

The cost is fixed for all the new chain deployments and is documented by the Uniwap Accountability Committee.

UI maintenance: 5,000 USD/month paid for 1 Year, 60000 USD

Total: 105,000 USD

The allocated funds will be escrowed in a multisig until the deployment

12hFP6WY1WqbPX7N2pyMPLUjmYuGr2FmW7bjSJ6jsm5zv1W1

Multisig signers: 2/2

Alex:Parity
DAOplomats

We have invited validators and Polkadot DAOs to be on the multisig; unfortunately, all the requests were denied "due to a lack of compensation for signers."

Stakeholders

Proposer: @DAOplomats
Delegates of Uniswap DAO responsible for coordination between Polkadot DAO, Uniswap DAO and other stakeholders. We are also authoring the proposal.

Deployer: GFX Labs
Technical contributors to Uniswap DAO, responsible for developing the contracts on the target chain.

Frontend: Oku
Users can interact with the new Uniswap v3 deployment on the initial frontend.
Oku received grants from the Uniswap Foundation in 2022 to host alternative UIs, and the DAO’s New chain onboarding package revolves around Oku.

Polkadot OpenGov
Funding the deployment cost of the Uniswap V3 contracts and the UI maintenance.

Liquidity Bootstrapping

DAOplomats is authoring a treasury proposal to the Uniswap DAO to allocate UNI tokens to incentivise liquidity after the deployment on the Asset Hub. The proposal falls under Uniswap's standard Onboarding package.

Liquidity and Pools

wETH-DOT
DOT-vDOT
DOT-USDt

Uniswap’s Onboarding Package
The Uniswap onboarding package aims to incentivise new V3 deployments, allowing them to gain momentum and receive initial liquidity from the community.

Criteria for Package Adoption
After the 7-day RFC of the deployment proposal concludes, a temperature check will be posted to the Uniswap DAO via Snapshot. This off-chain vote will determine how much incentives the Uniswap DAO would like to allocate to this deployment.

The options are:
$250k
$500k
$750k
$1M
No Incentives

Incentives matching
Most of the deployments of Uniswap, who got the onboarding package, were accompanied by incentives matching from the foundations/entities behind the chain. Since the proposal is coming from the DAO, the DAO should consider an incentive programme for the deployment.
Example of incentives matching

1. Lisk uni swap deployment
2. Manta Network for 250,000 USD matching
3. Mantel Network incentives
4. Taiko matching for 250,000 USD.

Asset Hub Liquidity Bootstrapping:
For the PolkaVM upgrade to be successful, the treasury should provide liquidity to the Asset Hub Dapps. DAOplomats are in the process of authoring such a proposal.

Disclosure

DAOplomats are not compensated for coordinating this engagement. We are, however, part of the Uniswap DAO’s delegate incentives programme, which compensates for our engagement in governance at the Uniswap DAO.