Uniswap governance spat sparks worries that protocol isn’t decentralised

GM, Tim here.

• Uniswap’s new L2 leaves its DAO in the dark.
• Trump’s WLFI token sale flops.
• Whales are skewing Polymarket’s election odds.

Uniswap snubs its DAO

First, Uniswap Labs announced Unichain. Then it ran into problem with its DAO.

The firm behind the $5 billion decentralised exchange has marketed Unichain as the protocol’s answer to the growing trend of Ethereum layer 2s.

The problem? Uniswap DAO delegates, who are supposed to be in control of major decisions involving the Uniswap protocol, say they were left in the dark.

DAOs, or decentralised autonomous organisations, are a type of governance structure popular in DeFi where holders of a protocol’s tokens can use them to propose and vote on changes.

Uniswap’s sudden announcement of Unichain has raised serious questions about DAO governance, Billy Gao, Head of Governance of Stanford University’s blockchain club, said on X.

According to Gao, key decisions with wide-ranging impacts, such as what underlying technology Unichain will use, were made by Uniswap Labs behind closed doors.

Stanford’s blockchain club is the joint eighth-largest Uniswap DAO delegate with 2.5 million UNI tokens.

“It calls to question (once again) how decentralized UNI governance actually is,” Gao said.

To DAO delegates like Gao, it appears the for-profit company Uniswap Labs has more control over the Uniswap protocol than its tokens holders do.

Uniswap launched the UNI token in September 2020. The launch of UNI “officially enshrines Uniswap as publicly-owned and self-sustainable infrastructure” and helps protect the protocol’s autonomous qualities, Uniswap said in a blog post.

Some, however, have defended Uniswap Labs’ actions.

“This is something anyone can do, permissionlessly,” Mario Zavala, founder of DeFi analytics platform Revert, said in response to Gao.

“Uniswap Labs had no obligation to privately inform the delegate.”

World Liberty Financial flops

When Donald Trump’s World Liberty Financial launched its token sale last week, it had a lofty goal: Raise $450 million.

A week later, and the DeFi project hasn’t even come close. So far, it has raised just $14 million.

Small print in World Liberty’s documentation reveals that Trump and others who stand to benefit financially from the project could end up empty handed.

Critics say the situation was predictable.

World Liberty valued itself at around $1.5 billion, a huge figure considering the project hasn’t even launched yet.

At the same time, the WLFI tokens the project is selling aren’t tradable, and there’s no guarantee they ever will be.

When there’s no potential to make money, many in crypto just aren’t interested.

Whales tip Polymarket odds

Donald Trump’s election odds have been climbing on crypto betting site Polymarket.

Vice President Kamala Harris may have a two-point lead in national polls, but the betting platform gives Trump a big lead — Harris bets cost only 37 cents, implying a 37% chance of a win.

The shift is mostly due to a handful of large bettors skewing the odds.

Four accounts have nearly $35 million in pro-Republican trades. Given the low liquidity, it’s been enough to distort sentiment surrounding the election.

“It’s about the depth of the market,” Jake Dwyer, founder of venture fund The Factor Corp, told DL News. “If the market interest exclusively exists at a tight range, as soon as you want to buy a big amount, you find there’s no size offers.”

This week in DeFi governance

VOTE: Stargate DAO mulls bridge deployment on Unichain

VOTE: Arbitrum DAO votes against token swap pilot proposal

VOTE: Uniswap DAO votes on revised onboarding proposal for Forse as a data service provider

Post of the week

DefiLlama’s 0xngmi weighs in on what could happen to Polymarket’s total value locked when bets for the US presidential election resolve.

Got a tip about DeFi? Reach out at tim@dlnews.com.