Uniswap, one of the leading platforms in the DeFi ecosystem, is undergoing significant changes in its governance system. The current proposal aims to address the lack of representation for certain delegates in the Uniswap DAO. The allocation of 10 million UNI tokens directly from the DAO’s treasury to these underrepresented delegates is being proposed.
This allocation would be specific, granting up to 2.5 million UNI to the top four candidates, while the rest would be distributed equally among other participants. It is crucial to emphasize that these tokens would not be tradable but would be exclusively designated for voting purposes. The underlying purpose is to broaden the participation and influence of delegates currently considered insufficiently represented in the decision-making process.
Uniswap’s current governance system allows token holders to vote directly or delegate their voting power to another entity. The proposal originates from StableLab, a governance service provider, which would also receive governance tokens if the proposal is approved.
Uniswap Faces Criticism For Centralization
This move towards greater inclusivity in Uniswap’s decision-making comes in response to previous criticism of the centralization of voting power. Some delegates with a significant number of votes exhibit extremely low participation rates, raising concerns about fairness in the governance process.
This centralization has led to large token holders such as a16z, Dharma, and Gauntlet having a disproportionate influence on decisions.
Regarding the market reaction, according to data from CoinMarketCap, the price of UNI experienced a significant increase of 16.2% in the last 24 hours. It is currently trading at $6.20 per unit. Its market capitalization grew by 16.11% to $3.646 billion, and the volume in the last 24 hours increased by approximately 75%, reaching almost $751 million.
Uniswap’s project to strengthen representation in its governance system reflects a conscious effort to address past challenges and strives to maintain equity among its users and true decentralization. We will be closely watching how the adoption of the proposal by delegates unfolds and the impact it may have on the token’s price.