Uniswap and Lumia Propose New Solutions for DeFi Liquidity

The crypto community’s overwhelmingly positive response to Uniswap’s incentivized governance model prompts Lumia to propose its own alternative model.

Flaming unicorn flying through a galaxy.
Created by Gabor Kovacs from DailyCoin
  • DeFi networks are struggling with liquidity issues. 
  • Uniswap’s UNI token soared on a proposal to tackle the issue.
  • Lumia proposes a more sustainable, cost-effective solution.

Liquidity issues have long been plaguing DeFi, with platforms struggling to find a balance between rewarding token holders and liquidity providers. Uniswap’s latest proposal, which aims to tackle this issue, seems to be a step in the right direction. 

After Uniswap’s proposal got overwhelming support and boosted the UNI token, DeFi project Lumia highlighted its own model aiming to address the inefficiencies of current DeFi liquidity models.

Uniswap’s Governance Proposal Leads to DeFi Altcoin Surge

On Tuesday, March 5, Uniswap’s UNI token surged 60% on news that its community overwhelmingly supported its governance proposal, allocating more rewards to holders. By incentivizing token holders with rewards for staking and delegating, Uniswap aimed to address the liquidity issues plaguing DeFi platforms.


Uniswap’s expansion strategy aligns with its vision of becoming a “liquidity layer” across networks, offering liquidity solutions across the DeFi landscape. However, this view has found some challenges, highlighted by Lumia on Wednesday, March 7. 

The platform believes that the prevailing models, heavily reliant on traditional liquidity provision mechanisms, are not viable for the long-term health and scalability of the DeFi ecosystem. For that reason, it presents its own alternative model. 

Lumia’s Alternative Model For DeFi Liquidity

Lumia, recognizing the inherent challenges and limitations of the current DeFi liquidity models, proposes a radical shift towards a more sustainable and cost-effective framework. The core of Lumia’s proposition rests on leveraging liquidity from centralized exchanges (CEXs) to support decentralized finance (DeFi) platforms. 


This approach is designed to bridge the gap between the vast liquidity available in CEXs and the liquidity-needy DeFi ecosystem. This way, it presents a solution that could potentially reduce reliance on traditional liquidity providers (LPs) and their associated costs.

By reducing the costs associated with LPs, Lumia’s approach can increase the rewards to holders. This is in line with Uniswap’s popular proposal, which revealed the necessity of more actively encouraging governance in the DeFi space. 

In the wake of the proposals, the ORN token, which is currently transitioning to $LUMIA, jumped 29.26% from $1.5 to $2.1 on Wednesday, March 7. The surge is thought to be due to the market’s heightened interest in its alternative model for DeFi liquidity. 

On the Flipside

  • Lumia’s current transition from Orion (ORN) to $LUMIA is subject to a DAO vote. 
  • DEX volume is currently experiencing a notable surge, reaching 40% of the market traditionally dominated by centralized exchanges. 

Why This Matters

By leveraging CEX liquidity, DeFi platforms can potentially reduce the costs associated with incentivizing traditional LPs, making DeFi participation more appealing to a broader user base.

Read more about Uniswap and its place in the DeFi landscape: 

Uniswap: Crypto’s Favorite Decentralized Exchange

Read more about the recent surge in DeFi volume

DEX Volume Surges 70%: Ethereum, Arbitrum, Solana Lead

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.