Is it realistic to have uniswap LP tokens as collateral anytime soon?

I see it’s discussed in multiple threads here, spend over hour reading them but didn’t see getting to anything actionable?

As a user that has both significant CDP, MKR and liquidity positions in uniswap I would like to share the value I see in such decision for whatever it’s worth.

Right now I have to choose between collateralizing crypto to access liquid cash (since I’m long term holder and won’t sell at current prices) and putting my assets to work and generate me passive ROI.
Well, I’m currently doing both but the crypto that is currently collateral in makerdao is not productive for me.

If I can collateralize LP uniswap tokens, I’ll be able to have my assets work for me earning me passive income and at the same time use them to access fresh cash for other, more active investments or ongoing expenses.
That for me will be like being able to eat my cake and have it at the same time.

Heck, I’ll even (probably) be able to cover the MKR interest from my uniswap income and have some left over. From my perspective having access to debt for free.

Now from the makerdao and MKR holders perspective that is also VERY good because ton of people will be generating debt and won’t mind paying the interest indefinitely if they are making more from those assets than the interest.

For example right now only the ETH-WBTC uniswap pool has almost half billion $.
In 45 days the UNI rewards will stop and those people won’t have to stake their LP tokens at uniswap but will be able to do whatever they want with them.

The other slight positive is that by having LP token that represent 2 assets you average down the risk a little.

TL;DR If you have uniswap LP tokens as collateral, it’s great for both the users of MakerDAO, and the DAO and it’s MKR holders as well. Win-win.


I think a lot of people are watching with interest whether Maker includes interest bearing tokens.

Honestly I look at this 10B locked in DeFI number and think to myself - how much of this is the same DAI being counted over and over and over again because of the cycling or one asset class into another deposit account to borrow another…

I completely agree that interest bearing assets make it easier to digest a borrowing fee on Maker.

Oracle onboarding and Risk onboarding are both speed bumps before they can be added as collateral. It’s a bit more complicated than standard ERC20 tokens.

Yeah, Uniswap LP tokens are an interesting type of collateral. Lower volatility than ETH, yield bearing, different return profile.


is it at least being considered by them?


UNI-V2-DAI-ETH and UNI-V2-USDC-ETH have both been greenlit with governance polls already.

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I was hoping for non DAI involving pair but it’s still pretty good

We will get there!!! Honestly for the small team we have collateral onboarding and work performed has been top level this last couple of months

You can also propose a new collateral, just check out the forum posts regarding flexible collateral onboarding & grants


It’s being worked on. The Domain Teams have already created a prototype internally. We’ll have more info to share soon.


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