It is not the first time Uniswap governance has been dominated by a whale.
The effect of whales on Uniswap governance is a topic of hot debate once again after Harvard’s blockchain group threw a massive amount of voting power behind its own proposal.
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 proposed fund would have a chest of 1-1.5 million UNI, worth approximately $28 million to $42 million at current prices. At the time of writing Harvard Law BFI has pledged 10.46 million UNI tokens, or 99% of the votes, in favor of the proposal. There are just 766,460 votes against it so far.
Industry observer and critic of centralized governance, Chris Blec from DeFi Watch, was one of the first to comment on the heavily weighted voting mechanism.
⚠️ @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 “here we go again” quip refers to Uniswap’s first governance vote in October 2020, proposed by trading platform Dharma to reduce the proposal submission threshold. The proposal would have given the majority of the voting power to the top two token holders (Dharma and blockchain simulation platform Gauntlet). The two of them dominated the ballot with their own heavy bags bringing Uniswap’s governance into question, however, the vote was defeated by a tiny margin.
The lobbying fund, if passed, would have four primary goals according to Harvard, consisting of educating policymakers to preempt regulatory, legal, political, and tax threats to DeFi, secondly achieving regulatory clarity for DeFi related activities. The third goal would be to advance laws that support DeFi and decentralized governance, and finally encourage other DeFi protocols’ governance communities to contribute to the effort.
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 stated that there were enough votes to create a snapshot proposal, but it cannot unilaterally get it through a consensus check without a majority of votes.
At the moment the proposal is in “temperature check” mode which means it needs a minimum of 25,000 UNI in support, which it already has. To pass a full proposal after the “consensus check” stage, it needs a quorum of 40 million UNI in favor.