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The newly established DeFi Education Fund has been chastised for abruptly declaring that it has sold half of the 1 million UNI tokens given to it through UNI governance.
Many in the crypto world have condemned the controversial Uniswap-funded DeFi Education Fund for converting half of its donated funds into stablecoins.
On June 12, the fund tweeted that it was selling 500,000 UNI to Genesis Trading for 10.2 million USDC in an over-the-counter (OTC) trade, despite the Uniswap proposal for the fund indicating it would liquidate the 1 million UNI over four to five years.
In May, the Harvard Law Blockchain and Fintech Initiative launched a governance proposal advocating for the establishment of the fund and the allocation of one million UNI (approximately $18 million at current prices) to the entity to support educational initiatives and policy lobbying for the decentralised finance sector.
The request was approved at the beginning of this month, and the UNI tokens were transferred to the fund.
The event has rekindled questions about the centralisation of Uniswap’s governance structure, as well as the fund’s openness and objectives.
Blockchain sleuths discovered that Larry Sukernik, one of the education fund’s multi signers, had sold 2,612 UNI only hours before the OTC trade. Sukernik justified the deal on Twitter, claiming that the UNI he sold were from a grant he got only a few weeks before.
Looks like Larry Sukernik, one of the multi signers behind the $20M DeFi education fund, dumped UNI five hours before the $10M OTC sale. pic.twitter.com/JWlxZC2L4Q
— Igor Igamberdiev (@FrankResearcher) July 13, 2021
It was gathered that Harvard Law had made it clear “the intent was to to gradually sell the 1m UNI over a 4-5 year period, and not dump large amounts at once.”
“The Fund then just sold 50% of the 1m UNI for USDC without explanation. They still haven’t explained why, despite hundreds of people asking them today,” he added.
On July 13, Blec wrote a governance thread requesting openness on the fund, citing concerns about the proposal’s voting procedure, the fund’s establishment, and the probable role of Uniswap investor Andresson Horowitz (a16z) in influencing events.
“The DeFi Education Fund committee members, the Uniswap core team and its investors (including a16z) have refused to answer any specific questions posed to them about the fund’s origins, who came up with the idea, how future policy will be derived, and more,” Blec wrote, noting that a letter he sent to Andressen Horowitz had been “willfully ignored.”
“After the vote finished and the Fund was created, I sent a new set of questions on June 29 to a16z, as it appeared that the vote only won due to governance delegates using voting power given to them by a16z. These questions were also willfully ignored.”
Blec also called for Sukernik to stand down from the fund’s committee, telling Cointelegraph: “Even if it was unintentional, the appearance of a member of this committee selling UNI tokens from his own account just hours before triggering a massive 500K UNI sale is exactly the type of behavior that would trigger a regulator.”
“It would send the right message if Sukernik resigned from the committee and allowed someone else to take his place.”