Almost $50 Million UNI Goes Into Governance But Price Tanks to $3

https://coingape.com/almost-50-million-uni-goes-into-governance-but-price-tanks-to-3/

Uniswap’s native token, UNI, is flowing into the protocol’s governance mechanism but its prices are still tanking despite an increase in collateral.

According to recent metrics from Dune Analytics, around $47.5 million in UNI tokens have been delegated to protocol governance. The dashboard also revealed that there are over 2,000 delegates and over 87,000 UNI holders.

As with most DeFi governance systems, a few large addresses hold most of the voting power which effectively gives the whales control over the direction of the protocol.

Late last month, a Glassnode report delved into the Uniswap token distribution roadmap and governance plans concluding that the protocol falls far short of true decentralization. At the time, it stated that only 15 addresses control at least 10 million UNI.

Four of these are reserved for the governance treasury, and one is the airdrop distributor address. Of the remaining ten addresses, nine of them contain part of the team and investor token allocation, and the last one is controlled by Binance.

Uniswap TVL at All-Time High

Centralization concerns aside, Uniswap metrics are continually improving in terms of liquidity provision. The protocol is at the top of the list in terms of total value locked according to Defipulse.com.

TVL is at an all-time high on Uniswap at just under $2.4 billion, or 22% of the total collateral across all DeFi platforms. Over the past two months, it has surged almost 1700%, driven largely by SushiSwap and the launch of its own liquidity mining pools in mid-September.

At the time of writing the amount of crypto collateral locked across those four pools was $1.78 billion, or 75% of the total locked on the platform. The most popular pool is the ETH/USDC one with almost half a million dollars worth locked up.

The pools are currently earning 583,333 UNI per week each and will continue to do so for the next six weeks.

UNI Prices Sliding

The positive collateral figures have not helped UNI token prices, however, as it continues to slide. At the time of writing, UNI was changing hands for $3.12, down 11% on the day according to Uniswap.info.

UNI price
UNI/USD – uniswap.info

Since the beginning of October, UNI has dumped 30% and since its peak, shortly after launch, it has lost 60%.

Like most recently launched DeFi tokens, UNI is going off the boil and being sold off as ‘degen’ farmers flock to the new latest craze.

The post Almost $50 Million UNI Goes Into Governance But Price Tanks to $3 appeared first on Coingape.

Is Uniswap Governance Centralized? New Report Finds it Could be Controlled By Binance

https://cryptopotato.com/is-uniswap-governance-centralized-new-report-finds-it-could-be-controlled-by-binance/

Uniswap made a shrewd move by airdropping millions of tokens and launching its own liquidity pools to reclaim what SushiSwap had taken from it in just over two weeks. It has propelled the platform back to the most dominant DEX as total value locked approached $2 billion while that on rival SushiSwap has dwindled.

Uniswap made it clear that 40% of all UNI tokens would be allocated to the team, investors, and advisors, with just over half of that going to the latter two. The Glassnode report has delved into this and alludes that the protocol falls far short of true decentralization.

Token Allocation and Storage Anomalies

Liesl Eichholz, who penned the report, questioned the distribution of these tokens, which was supposed to take place over four years. However, the public schedule for vesting has not been announced.

She added that it was even more concerning that these tokens currently appear to be fully liquid and are presently held in regular Ethereum addresses with no transfer restrictions.

The term ‘vesting’ has been used loosely by Uniswap, and this method of storing the tokens effectively gives the team and investors admin rights over the protocol, the report added.

“The Uniswap team and investors have allocated themselves an immense proportion of the total supply of UNI tokens. The pie chart feels more reminiscent of a 2017-style ICO than a 2020-style fair launch,”

The report continued to criticize Uniswap governance, noting that in order to submit a proposal, at least 1% of the entire UNI supply needs to be possessed, and 4% of the total supply, or 40 million tokens, is required to reach a quorum.

Governance Whales

The report stated that only 15 addresses control at least 10 million UNI, four of which are reserved for the governance treasury, and one is the airdrop distributor address. Of the remaining ten addresses, nine of them contain part of the team and investor token allocation.

Assuming the team and investor allocation will not be touched, that leaves one address which currently has enough UNI to submit a governance proposal. That address is owned by Binance, holding around 26 million tokens.

“This means that even though the governance treasury will be unlocked in less than a month, currently only Binance – a centralized exchange in direct competition with Uniswap – has the power to propose uses for these funds.”

The report concluded that community-led governance is essentially impossible for Uniswap for the time being.

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