The ‘DeFi Education Fund’ defends the contentious $10.2 million UNI liquidation.

 47 Interactions,  2 Today

The DeFi Education Support has justified its surprise $10 million liquidation in UNI, stating the action was required to “begin its work and fund future operations.”

The DeFi Education Fund (DEF), a group financed by Uniswap to undertake lobbying and educational activities in behalf of the decentralised finance industry, has justified its unexpected choice earlier last week to sell half of its UNI treasury.

The organization said it needed to convert the funds into stable assets to weather crypto market volatility.

In May, the DEF was conceived in a Uniswap governance proposal from the Harvard Law Blockchain and Fintech Initiative, with the entity being formed earlier this month after the vote passed with a treasury of 1 million UNI tokens, worth more than $18 million at current prices.

Despite stating that the UNI would be sold over time, the fund abruptly stated on July 12 that it had arranged for half of its war chest to be liquidated into USDC by market maker Genesis Trading.

Adding to community concerns, DEF committee member Larry Sukernik liquidated 2,612 UNI (worth roughly $50,000) around the time of the fund’s $10 million sale.

Responding to widespread backlash from the crypto community, DEF published a blog on July 14 seeking to justify its large sell-off.

See also  Ethereum: At this moment, there is only one thing that can be asserted with certainty.

According to the organisation, “the vast majority of DEF’s expenses will be dollar-denominated,” and that putting half of the funds into a solid asset “provides the DEF with a sustainable budget to weather any market downturns.”

DEF claims it sold the UNI fund to “begin its work and fund future operations” since time is running out for the business as regulators circle.

The post further stresses DEF’s control over fund management, referencing the Uniswap plan as saying:

“Due to the dynamic and somewhat unpredictable state of global policy proposals, we believe the grant-making committee should have considerable discretion to allow for flexibility and speed.”

The foundation further denies allegations that the sale had a substantial influence on the UNI markets, claiming that the transaction represented less than 5% of daily UNI trading activity and that UNI’s subsequent decline was in accordance with the larger crypto meta-trend.

In response to the concerns raised by Larrk Sukernik’s liquidation of UNI, a new regulation states that DEF members would no longer be permitted to conduct UNI transactions inside a seven-day window of DEF treasury activity in the future. Sukernik’s transaction occurred after the sale had already been finalised, according to the article.

In addition, the DEF will employ a full-time policy director to oversee the organization’s yearly budget, which is expected to be released within the next 90 days. The group also intends to deploy the Tally Failsafe technology, which will enable Uniswap governance to stop transactions and revoke DEF money. Failsafe is being audited right now.

See also  Best Performing DeFi Tokens in 2020

The blog did not satisfy DeFi Watch creator Chris Blec, who reacted on Twitter with a long list of unanswered questions, including how the fund’s committee members were picked and how UNI token holders can be confident monies will be paid correctly in the future.

ChainCatcher, a Medium writer, also noted the concentration of votes supporting the fund’s formation among Uniswap’s top backers, adding that it is odd that only UNI holders should pay the price of political campaigning for the larger political sector.

Subscribe to our newsletter

Loading

Leave a Reply

Your email address will not be published. Required fields are marked *