Uniswap V3 TVL Serious Blunder

This is brilliant!

All Your Uniswap v3 Liquidity Farming Calculations Are Dead Wrong! Here’s Why

This is huge. Just one example: Uniswap claims the pool USD/ETH has a TVL of $333m, except the data shows it has only $176m.

How can this happen?

A brief analysis of the code shows that it accounts for all swaps and liquidity events but doesn’t account for fees. Uniswap pools have a 0.01% to 1% fee on every swap. This fee is deducted from traded assets and accrued to liquidity providers. In turn, liquidity providers can collect accrued fees at any time.

The current Uniswap v3 subgraph, though, displays the figures as if no fees were ever accrued and collected. So, the Uniswap v3 TVL figures deviated from reality with each swap.

Truly laughable, or just ignored so as to make Uniswap look better than it is. You can read the whole story at the article link.

A Github issue was created in November 2021. Nothing was done to fix this - until yesterday! The power of bad press.

I've always disliked Uniswap, especially in comparison to Bancor and the newer Balancer. Uniswap pools suck - the mathematics sucks in the long term.

My own quibble with TVL is how easily it can be manipulated by any "defi pool platform". All the admins have to do is use one small pool to inflate their primary shitcoin, and that automatically increases the TVL of all their other pools. Then as their token inevitably converges to near-zero, the admins will extract their profits from any real coins in their pools. As an exercise, just go through and count the number of third party tokens, and their total value, to see how much money is really being invested.

I hope Uniswamp will sink, but for now, I just have to laugh as their manipulations have been found out.

That article then carries on describing a different issue with Uniswap V3, and how it can be manipulated by high frequency interventions.

What we need are protocols that behave somewhat rationally, to simulate what a fund manager would do. That's Balancer.