Uniswap’s first governance vote fails … despite 98% support


Uniswap’s first governance proposal has ended in defeat, with votes in favor falling a whisker short of the required threshold.

The first governance vote for decentralized exchange (DEX) Uniswap has ended in failure, despite the proposal attracting overwhelming support of 98% of votes cast. Despite this, it fell roughly 1% short of the 40 million votes threshold needed for approval by the close of voting.

The poll ended earlier today with almost 39.6 million UNI staked in favor, compared to roughly 700,000 opposed. DeFi blogger Danger Zhang (‘@safetythird’) described the vote as “the DeFi equivalent of winning the popular vote but losing the electoral college.”

Uniswap governance vote results: Uniswap

Ironically, the proposal sought to reduce the number of tokens needed to submit and pass proposals. It was put forward by open-source lending protocol and major UNI token holder, Dharma, 

Currently, proposals can only be made by entities holding at least 1% of UNI’s circulating supply (10 million UNI, worth around $30 million), and need to surpass 40 million total votes (worth $130 million) to pass. Dharma’s recommendations would lower the thresholds so holders of at least 3 million ($9 million) UNI could suggest upgrades, and only require 30 million supporting votes ($100 million) for a proposal to pass.

Responding to the vote’s conclusion, Dharma CEO and co-founder Nadav Hollander described the result as “a disappointing outcome that demonstrates the impetus for the proposal in the first place.”

However, Dharma’s proposal was not welcomed by all within the DeFi space, with critics pointing out that if it passed just two entities, Dharma and blockchain simulation platform Gauntlet, would almost have the number of tokens needed to find quorum between them. Dharma currently controls 15 million UNI in a single address.

Some onlookers hailed the vote as a success, with crypto developer Agustin Aguilar arguing that voter abstinence should be understood as a barometer of opposition to the proposal:

Uniswap A Catalyst for DeFi (Decentralized Finance)


Uniswap is a decentralized protocol for automated liquidity provision on Ethereum and a catalyst for the growth of decentralized finance.

Continue reading on Medium »

Governance Roundup: What DeFi protocol communities are discussing and debating


Quick Take

  • In addition to major feature launches, many protocols have minor parameter decisions (e.g. changing interest rates in MakerDAO) that must be made by token holders
  • Most of the governance happens on forums, where users submit proposals and ideas, and community members give their feedback
  • The first layer of voting is typically informal to gauge interest, and then proposals are moved to token holder voting (or execution via a multi-signature signers)

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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.

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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.

The post Is Uniswap Governance Centralized? New Report Finds it Could be Controlled By Binance appeared first on CryptoPotato.

Uniswap Launches UNI Governance Token with Community Airdrop


Uniswap – the sector leading DEX – has released its UNI governance token with a community airdrop to anyone who has interacted with Uniswap prior to September 1st.

Underpinning the hottest governance token to date was a retroactive airdrop where any account that interacted with Uniswap V1 or V2 contracts received 400 UNI. Liquidity Providers also earned favorable rewards based on historical liquidity while the 220 holders of at least one $SOCKS (a tokenized Uniswap merchandise item) received 1000 UNI.

In total, 150,000,000 UNI – or 15% of the supply – was distributed through the community airdrop, broken down as follows:

  • 4.92% to all 49,192 historical LPs [49,166,400 UNI]
  • 10.06% split evenly across all 251,534 historical user addresses [100,613,600 UNI]
  • 0.02% to 220 SOCKS holders/redeemers [220,000 UNI]

To claim UNI rewards, simply head to Uniswap and look for the purple “UNI” box in the top right. Here you will need to submit a transaction to claim your rewards. Please note that 400 UNI was airdropped to any wallet which has ever interacted with Unsiwap, meaning many users may be eligible for multiple airdrops depending on the different number of wallets used.


UNI Liquidity Mining & Distribution

Starting tomorrow, four liquidity mining pools will open for UNI rewards. USDT, DAI, USDC, and WBTC pools will each earn an allocation of 5M UNI over the course of the next two months. This breaks down to 83,333.33 UNI per pool per day or 54 UNI per pool per block.

This intro to liquidity mining is set to be followed by formal governance over incentives after the first 30 days in which the community treasury (responsible for future liquidity mining rewards) will be vote on pools & allocations.

Outside of the liquidity mining rewards, UNI’s 1B supply is set to be broken down as follows:

  • 60.00% – Community [600,000,000 UNI]
  • 21.51% – Team  [215,101,000 UNI]
  • 17.80% – Investors [178,000,000 UNI]
  • .069% – Advisors  [6,899,000 UNI]

All team, investor and advisor tokens will be subject to four-year continuous locks, meaning tokens will unlock in real-time. Here’s a breakdown of how these tokens will enter the circulating supply over time.

Perhaps what’s most novel about the distribution is an ongoing 2% perpetual inflation set to kick in once all 1B tokens have been distributed. While this parameter is obviously malleable by governance, it sets a fantastic precedence for protocol sustainability.

With Binance and Coinbase both springing to list UNI less than 12 hours after launch, it’s clear that DeFi has a new cool token on the block.

In the wake of a SushiSwap attack, anon devs have now learned the golden rules of DeFi:

  1. Do not cross Andre Cronje
  2. Do not cross Hayden Adams

To keep an eye on Uniswap, follow them on Twitter or join the conversation on the governance forum.

The post Uniswap Launches UNI Governance Token with Community Airdrop appeared first on DeFi Rate.

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