The Uniswap governance tokens are not locked in a smart contract and reside on ordinary Ethereum addresses. This is the conclusion reached by analysts at Glassnode. In their view, this raises questions about the degree of decentralisation of the leading non-custodial exchange.
The $UNI token aims to transition @UniswapProtocol into a decentralized, community-owned protocol 🦄
But the team and investor tokens, which are supposed to vest over 4 years, are not subject to a programmatic lock-up.
Read the full story 👇https://t.co/3B0Mda3G38
— glassnode (@glassnode) September 24, 2020
On September 17, Uniswap released the governance token UNI with a total supply of 1 billion. 60% of the tokens were allocated to the community — they will be distributed over four years. The team will receive 21.51% of the tokens under the vesting programme. A further 17.80% of the UNI were allocated to investors, 0.069% to project advisors.
Five days later, 184,000 users of the exchange received 113.17 million of the 150 million UNI earmarked for the airdrop.
Glassnode analyst Liesl Eichholz is struck by the absence of a vesting schedule details in these events, and by the fact that the community-designated tokens are not subject to a programmatic lock-up.
1/ The 400mm $UNI allocated to the @UniswapProtocol team and investors is supposed to vest over 4 years — but no vesting schedule has been published, and the tokens are currently liquid.
Why aren’t these vesting tokens under some kind of timelock?
— Liesl Eichholz (@liesleichholz) September 24, 2020
According to her observations, the tokens are distributed across 43 addresses. It remains unclear who owns them: the project’s founder Hayden Adams or investors such as Paradigm.
5/ The UNI reserved for the team, investors & advisors have been split across 43 different addresses.
Right now, it is unclear who controls the keys to these tokens. Is it @haydenzadams? Or have they already been distributed to investors like @paradigm? It is impossible to tell.
— Liesl Eichholz (@liesleichholz) September 24, 2020
In the report, it is noted that for this reason, in the early stages of governance the Uniswap team and investors will hold disproportionately large influence.
In Glassnode, the motivation was seen as an effort to shield the protocol from radical changes in the early stage of the shift to decentralised governance, even at the cost of depriving the community of token rights.
Eichholz suggested that Uniswap took this step deliberately to deter attacks by centralised exchanges. She notes that to submit a governance proposal one must hold 10 million UNI. Today only major venues such as Binance hold that amount. In her view, Uniswap’s actions have made such attacks pointless.
Eichholz laments that the exchange’s leadership did not brief the community on its actions.
stated that decentralisation was lacking in most DeFi protocols, a point previously raised by Riccardo Spagni, former Monero lead maintainer and Tari co-founder.
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