AL #85: Why You Should Build on Unichain Now
✨ Not financial advice.
Disclaimer: Auditless are a Uniswap Foundation grantee. Any opinions expressed in this essay are ours only.
Many Founders are confused about where and how they should deploy their protocols in a multi-chain world.
They often end up optimizing for the wrong thing:
Waiting until the chain established to launch
Choosing chains based on short-term grants & incentives
Waiting for someone to validate that there’s a “need” for their product on that L2.
Often, you have to do the opposite and have some conviction on which chain you will call home before everyone else does.
Want to be a top protocol? Launch early
If you want to be a top DeFi app on any L2, you need to launch as soon as possible after the chain goes live.
Below are the top 20 protocols on Base by TVL.
Do you see it?
I've taken the liberty of adding their launch dates, here’s the summary:
7 out of the top 10 launched on August 2023 (right after the Base launch)
10 out of the top 15 launched in 2023
Some of the late launchers are categories that appeared later (e.g., perps with SynFutures and Cygnus Finance, Franklin Templeton with RWA)
Morpho is a notable exception, launching only June this year but it was already very successful on mainnet and Base became its first L2 launch
Launching early is so important, arguably more so than the features you launch with.
Many DEXes that are effectively Uniswap forks were successful just by launching early on a new chain:
PancakeSwap (BNB Chain)
Camelot (Arbitrum)
QuickSwap (Polygon)
Aerodrome (Base).
The effects in play here are complex to articulate and cut across the whole stack but they are very real.
Start small and grow fast
The overall idea is not new and has been well articulated by Peter Thiel in “Zero to One”.
To build a large business, it's easier to launch in a small market, dominate it and then grow with the market as opposed to competing in a larger market.
While it’s tempting to launch on an established chain, power law effects will work against you and existing players have many entrenched advantages.
For example, 3 out of the top 5 protocols on Base are funded by Coinbase Ventures.
The other 2 (Uniswap, AAVE) are blue chips that were already dominant on mainnet.
That’s not to say that you shouldn't launch on a more established L2 at all or not consider mounting a significant attack there later.
It’s just important to think about sequencing as part of any strategy.
Why Unichain
It’s going to be harder for each new DeFi chain to establish a critical mass of users, applications and liquidity.
While more apps may try to launch rollups, Uniswap is the super app of DeFi, usually a top 5 app by gas spent on existing L2s.
Unichain is perfectly architected to be a credibly neutral liquidity hub in a multi-chain DeFi landscape.
You’ll be hard pressed to find a DeFi app that doesn't benefit from faster transactions, a sequencer with better trust assumptions and cheaper cross-chain interop.
We discussed why Unichain’s architecture is optimal for trading and related prime DeFi use cases in a previous article:
Of course, as a Superchain rollup, it’s also going to benefit from any future upgrades to the OP Stack.
In short, if you’re building on the EVM and not already established on an existing chain, what better opportunity to launch are you waiting for?
What do I do if I'm developing hooks?
The answer to this is a little nuanced.
If you’re building a hook, to some extent you are “early” to a new platform already (Uniswap v4).
However, you’ll still be competing against other DEXes and pools on every chain you deploy on for order flow.
It may make sense to have a barbell strategy: deploy on several chains but concentrate your go-to market efforts on a chain you think will become your home chain.
How do you launch early
There is no prescribed path to success but there are 3 things you can do to get a head start:
Get ready to deploy early and explore what programs are available to accelerate you. Here’s the Unichain Builder Toolkit as an example
Talk to other people deploying on the chain. Forge friendships and partnerships and figure out ways to play positive sum games
Start building a community of users. Many protocols cultivated their communities well ahead of launch
There’s no better time to start than now.