Uniswap a prey to CeFi? – Swap is by far the go-to decentralized exchange platform on Ethereum. This is governed by a DAO, where UNI token holders can take part in decisions. However, the arrival of the giant Binance it could nullify the decentralization plans.
Binance: colossal voting power on Uniswap
Uniswap’s decentralized governance works on a well-known model. In fact, the holders number of UNI tokens they can participate in decisions related to the protocol. Also, the more UNI tokens a user holds, the higher the value of their voice in governance votes.
On December 18, several Uniswap users were surprised to see Binance come to the top of the voters. In fact, the exchange has delegated none other than 13.2 million UNI tokens. Following this deposit, Binance becomes the second largest delegatorbehind the investment fund a16z.
Hayden Adams, the founder of the Uniswap platform, reacted promptly to the situation. He expressed himself through a tweet:
“Yesterday Binance delegated 13 million UNI from its accounts, making it one of the largest UNI delegates (this is only 1.3% of the current UNI delegate, so the voting power of governance remains equally distributed). Really unique situation, as UNI tokens technically belong to its users. “
Hayden raises an extremely interesting point. The funds deposited by Binance come from the accounts on the platform. However, there is a good chance that these belong to Binance users. Through this maneuver, Binance would somehow monopolize the voting rights of its users.
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Towards the centralization of the Uniswap DAO?
Fortunately, for now, the situation it is not not critical. In fact, the funds deposited by Binance represent 1.3% of the entire UNI supply in circulation. Therefore, with this balance, Binance exceeds the 0.25% required to make a proposal.
However, this does not allow the exchange to exceed the quorum of 4% necessary for the adoption of a proposal by the governance. In any case, this situation should be carefully monitored. Indeed, it is imperative to monitor the positions and potential proposals issued by Binance.
While its share does not reach the 4% required for quorum, Binance is still dangerously close. If the cryptocurrency giant joins forces with other big voters, nothing could stop their strike force.
An involuntary maneuver according to Binance
The day after Hayden Adams announced, Changpeng “CZ” Zhao Binance CEO has replied community questions. Therefore, the latter explains that the symbolic delegation was not voluntary. In fact, this stems from the very functioning of the Uniswap protocol.
“Binance has moved UNI between internal wallets. This involved the automatic delegation of UNI. This is part of how the protocol works and was not intended. Binance does not vote with user tokens. Uniswap misunderstood the situation. “
All is well that ends well for the governance of Uniswap.
Last June, the company chain analysisspecializing in blockchain analysis, he had published an uplifting report on DAOs. According to his findings, most DAOs are far from truly decentralized. A phenomenon that tends to evolve with the birth of new approaches to CAD, such as the one proposed by Curve.
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