Uniswap, the decentralized exchange, is undergoing its first governance vote, which was submitted by open-source lending protocol Dharma. But a number of community members have raised concerns that if successful, the proposal will hand Dharma too much control over the future direction of Uniswap.
It has been reported that the proposal, for which voting ends on October 19, suggests a reduction in token governance and quorum thresholds.
However, this potentially gives the top holders of which Dharma is one significant power over decisions regarding Uniswap.
Currently, Uniswap governance requires proposal submitters to hold 1% of the total delegated UNI supply (10 million tokens), with a quorum of 4% (40 million UNI) required to pass a proposal, as Dharma has proposed to lower these thresholds to 0.3% and 3%.
David Felton, a community member, also known as Hiturunk in the Uniswap Discord channel, written in a blog post that the proposal could be bad for decentralization. He argues that Dharma already has significant voting power and controls 15 million UNI in one address alone.
Also, he says that this presents a threat to Uniswap’s sovereignty even without the proposal passing. If passed, a quorum could be achieved through just the top two delegates, Dharma and blockchain simulation platform Gauntlet, which have a combined total of almost 30 million UNI between them, That’s enough voting power to achieve the minimum quorum.
Felton said that the proposal “will so powerfully entrench them in Uniswap governance they might as well just outright own the DEX” and issued a call for it to be voted down.
“We strongly encourage all holders of Uni to vote ‘NO’ on this proposal to keep the quorum as the developers intended it.”
Likewise, stopping the proposal is a big task at this stage with over 30 million total votes in favor already and just 625,000, or 2%, against according to the voting tracker.
“I support Dharma’s proposal, but I think that the voting cartel they created to overcome Uniswap’s default threshold need to be dissolved right after the proposal passed.”
Similarly, Chris Blec, the founder of DeFi Watch, claims to have been blocked by Dharma after questioning the motives behind the proposal.
He further said that they should drop the DeFi label if they want to join the centralized exchange club.
“A company like Dharma with clear business interests should not have this level of control over Uniswap decisions. This power should be delegated to USERS. Not corporations.”
Dharma stated that their belief the change would be beneficial to good governance:
“We believe this proposal will help foster a vibrant Uniswap governance process,” and said that it “achieves the goal of making governance more accessible, while still ensuring that Uniswap governance is not subject to unilateral deleterious actors.”
Moreover, Hayden Adams, the founder of Uniswap, said:
“Huge milestone for @UniswapProtocol decentralized governance!!!”
Thus, Uniswap has come under fire recently over-centralization concerns when on-chain analytics provider Glassnode reported that centralized exchange Binance holds enough tokens (26 million) to make a significant difference to the outcome of a proposal vote.