In our earlier post (https://www.publish0x.com/the-other-side/are-you-a-liquidity-provider-on-uniswap-you-need-to-read-thi-xzyjxjm) we presented some facts about how Uniswap is manipulating its markets - including liquidity pools - through affiliated or controlled accounts. The reality seems to be a lot worse.

A word to fanboys, sponsored keyboards, and losers

We get it. If you get a $1,000-$2,000 present, you feel obliged to defend your sponsor. Are you sure though, this was not among the reasons for that airdrop?

Everything you will read in this post is about Uniswap itself, not in comparison to centralized exchanges, or other decentralized exchanges, commercial or investment banks, or outright scams. Commenting to compare Uniswap to anyone else is plain denial of facts and stupidity. Yes, Uniswap is not the only exchange or financial operation, performing such actions. But it's the only one performing such actions in plain sight, with almost nobody warning users on the facts.

Uniswap contracts are providing loads of liquidity to pools

USDC-ETH pair is one of the promoted pools for UNI rewards. You will be surprised to discover that the pool contract itself owns close to 97% of the liquidity provided at the time of writing, and 1341 other accounts hold the remaining 3% (https://etherscan.io/token/0xb4e16d0168e52d35cacd2c6185b44281ec28c9dc#balances). This contract alone has earned close to $923,000 in commissions, so far (https://uniswap.info/account/0x7fba4b8dc5e7616e59622806932dbea72537a56b).

As if this was not enough, another account controlled by or affiliated with Uniswap, 0xf6b6f07862a02c85628b3a9688beae07fea9c863, holds another 0.23% of the pool.

Liquidity provided by this contract alone accounts for assets valued over $362 million, or about 18% of the total Uniswap liquidity. Why on earth a Uniswap contract s providing the vast majority of liquidity in a pool? Is there any way possible for the market participants to know that liquidity provided by the contract real or virtual?

Let's see another promoted pool: ETH-WBTC. The Uniswap contract owns close to 24% of the pool, but this time no pool record is to be found on Uniswap for the contact account 0xbb2b8038a1640196fbe3e38816f3e67cba72d940 (https://etherscan.io/token/0x2260FAC5E5542a773Aa44fBCfeDf7C193bc2C599#balances vs https://uniswap.info/account/0xbb2b8038a1640196fbe3e38816f3e67cba72d940).

Is Uniswap falling apart?

This whole thing is starting to look like a virtual reality show. And virtual reality shows can last for as long there is some kind of control. When this control is lost everything collapses. If the reason for SushiSwap pulling out from Uniswap was because they discovered the inconvenient truth, Uniswap users, and especially liquidity providers, are in deep trouble.