protos.com
One of the largest holders of UNI tokens is questioning Uniswap’s decentralization and backroom deal-making, specifically, its claim of “efficiency” as justification for a suite of overhauls, and a possible undisclosed financial interest between Uniswap Labs and another blockchain, Optimism.
The Head of Governance at Stanford Crypto, a delegate entrusted with UNI governance tokens from thousands of individuals, threaded a 22-post complaint about Uniswap’s sudden decision to launch its own blockchain, kill its proposed fee switch that might have benefitted holders of UNI, and bypass the ostensibly decentralized autonomous organization (DAO) that supposedly governs Uniswap.
The hurried launch of Unichain “took many by surprise” and left “delegates in the dark,” wrote Billy Gao, who casts votes on behalf of his sizable delegation. He also noted that the decision “functionally mutated” the ERC-20 contract of UNI, which is “immutable” only by the most strict and pointless definition — given that UNI is now tied to an entirely new blockchain.
‘What control do token holders truly have?’ the delegate lamented.
Uniswap (UNI) and Optimism (OP)
Worse, Gao soon raised suspicions of a backroom deal that financially motivated Uniswap’s extralegal bypass of the DAO. Although he did not make a formal allegation, he noted, “there must be reasons behind adopting the OP [Optimism] stack for Unichain.”
Optimism is a separate blockchain that publishes rolled-up data onto Ethereum. The so-called “layer 2” or “scaling solution” launched its own token, OP, which is worth over $7 billion.
Importantly, Optimism is just one of thousands of competitors in the layer 2 ecosystem atop Ethereum. Indeed, it is less than one-fifth of the value of all Ethereum layer 2s. The Stanford Crypto delegate asked why Uniswap Labs chose OP and why everyone should trust that the decision had no backroom deal-making.
Lingering questions about Uniswap’s decentralization
Questions abound regarding Uniswap Labs’ decision to repurpose the UNI token away from its original focus on exchange fees. Why did Uniswap not choose Arbitrum, for example, the market leader that is more than twice as large as Optimism?
Read more: Is Uniswap becoming more TradFi than DeFi?
In short, Uniswap Labs is the target of another critique that marks yet another chapter in its saga of decentralization theatrics. In the past, the leader of the ostensibly decentralized token exchange has suffered criticism for endowing power with monied interests like Binance, a16z, and even the $700 million Ethereum Foundation.
Now, delegates who thought they had a say in Uniswap governance are left stunned at a hasty decision to launch a new blockchain, change the real-world function of an ostensibly immutable smart contract, and align with a second-ranked layer 2 with its own token incentives.