172 Interactions, 10 today
It is not the first time that a whale has ruled Uniswap government.
The impact of whales on Uniswap governance has resurfaced as a source of contention as Harvard’s blockchain group backed its own plan with a tremendous amount of voting power.
The proposal, made on May 27 by the Harvard Law School Blockchain and FinTech Initiative, is for the creation of a fund that would finance existing and new political groups engaged in crypto policy making and lobbying to defend decentralized finance against regulation.
The planned fund would have a chest of 1-1.5 million UNI, which is valued between $28 and $42 million at current values. At the time of writing, Harvard Law BFI had committed 10.46 million UNI tokens in support of the proposition, representing 99 percent of the votes cast. So far, there have only been 766,460 votes against it.
Chris Blec of DeFi Watch, an industry watcher and sceptic of centralised control, was among the first to comment on the severely weighted voting process.
⚠️ @HarvardLawBFI just cast a 10.45m UNI vote in favor of its own proposal to pay a bunch of lawyers 1.5m UNI out of the treasury.
Their vote accounts for 99.9% of the “yes” votes so far.
— Chris Blec (@ChrisBlec) May 27, 2021
The remark “here we go again” alludes to Uniswap’s first governance vote in October 2020, which was suggested by trading platform Dharma in order to lower the proposal submission threshold. The idea would have given the top two token holders the majority of voting power (Dharma and blockchain simulation platform Gauntlet). The two of them dominated the poll with their own hefty bags, casting doubt on Uniswap’s administration; yet, the proposition was defeated by a razor-thin margin.
According to Harvard, if enacted, the lobbying fund would have four key goals: first, teaching lawmakers to anticipate regulatory, legal, political, and fiscal challenges to DeFi, and second, gaining regulatory clarity for DeFi-related activities. The third objective would be to create legislation that promote DeFi and decentralised governance, and lastly, to urge the governance communities of other DeFi protocols to participate to the endeavour.
Harvard Law BFI responded stating that it was only natural for them to vote for their own proposal, adding:
“Additionally, we have this voting power from UNI holders who delegated their votes to us (which they are free to retract at any time).”
It indicated that there were enough votes to establish a snapshot proposal, but it cannot do so unilaterally without a majority of votes.
The proposal is currently in “temperature check” phase, which means it requires a minimum of 25,000 UNI in favour, which it already has. A quorum of 40 million UNI is required to pass a comprehensive proposal following the “consensus check” stage.