Binance may currently be the only one capable of making Uniswap governance proposals, which does not bode well for its decentralized competitor.
A recent post from Glassnode has called Uniswap’s decentralization into question, while insinuating that the platform’s developers might have intentionally misled the community about how the team’s allocation of UNI tokens will vest over time.
Uniswap’s team, investors, and advisors have been allocated 40% of all UNI tokens, with 21.51% of that figure going to the latter two. It seems that the distribution of these tokens, which was meant to take place over four years, currently lacks a public schedule however. It also appears that the team and investor tokens are not locked. Glassnode elaborated:
“While the distribution schedule pictured above shows them vesting gradually, the tokens allocated to the Uniswap team and investors are currently held in regular Ethereum addresses (i.e. externally owned addresses, or EOAs) with no transfer restrictions. In contrast, the governance treasury tokens are locked up in smart contracts and will be released programatically over time.”
Glassnode also criticized the project’s governance, noting that in order to submit a proposal, one needs to possess at least 1% of the entire UNI supply. As the entire supply has not yet been released into circulation however, Glassnode indicates that this threshold is actually 8% of the currently circulating supply.
The post further concluded that the only entity who currently has enough UNIs to submit a governance proposal appears to be Binance, “a centralized exchange in direct competition with Uniswap”:
“As a result, unless someone can lobby 10 million UNI worth of delegated voting power and at least 40 million votes, community-led governance is essentially impossible for the time being.”
Decentralized governance appears to present a real challenge for even the most established of DeFi projects.
Cointelegraph has reached out to Uniswap for comment but has not received response in time of publication.
