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What is Bunni?

Bunni is a liquidity engine for incentivizing Uniswap v3 liquidity.

Bunni has two parts: a protocol that wraps Uniswap liquidity positions into fungible ERC-20 tokens, and a vetokenomics system for incentivizing Bunni liquidity.

The combination of a robust incentivization system and concentrated liquidity makes Bunni on track to be the most efficient method for incentivizing DEX liquidity.

Uniswap wrapper

Officially Uniswap uses NFTs to represent liquidity positions, but it's a little-known fact that it doesn't have to be the case: anyone can build a contract that represents Uniswap positions in any form, be it an ERC-721 NFT, an ERC-1155 NFT, or ERC-20 tokens. This is thanks to the permissionlessness of the Uniswap core protocol.

Bunni has built the first such wrapper contract that represents Uniswap positions as ERC-20 tokens. This has numerous benefits over using NFTs:

  • Gas efficiency: LPs using the same price range & same pool share the same ERC-20 token, spreading the gas cost of providing liquidity over all LPs and thus making it much cheaper.
  • Easy composability: While it's possible to build financial applications on top of Uniswap NFTs, it is far easier to do so using ERC-20 LP tokens, since most existing financial applications are designed for tokens rather than NFTs. This is what enabled Bunni to adopt Curve's gauge system for Uniswap positions.

Vetokenomics system

Bunni's native token, the Liquidity Incentive Token (LIT), is used to incentivize liquidity on Bunni. Bunni has improved upon the vetokenomics used by Curve to reduce farming-and-dumping and increase longevity.

  • Balancer LP token as vote-locked token: Bunni uses the Balancer 80LIT-20WETH LP token as the lock token for obtaining veLIT.
  • Increased max boost: Bunni gives a max of 10x boost to LPs who have veLIT, instead of the 2.5x used by Curve & Balancer. This increases the advantage of holding veLIT.
  • Call option as reward token: Instead of using LIT as the reward token, Bunni uses call option tokens for LIT as the reward token. This has the benefit of enabling the protocol to accumulate a large cash reserve regardless of market conditions, as well as letting loyal holders buy LIT at a discount.