Uniswap Labs Enforces Restrictions to Certain Tokens

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In Brief
  • Uniswap Labs states its decision is in line with other DeFi interfaces.

  • The company asserts that the restricted tokens account for a small portion of the Protocol's overall volume.

  • Affected tokens include Tether Gold (XAUT) and meme-inspired tokens such as Grumpy Cat (GRUMPY).

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Software development studio Uniswap Labs has announced restricted access to certain crypto tokens moving forward.

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On July 23, the company issued a tweet reading “As of today, we have started restricting access to a small number of tokens at https://app.uniswap.org. These changes pertain to the interface at https://app.uniswap.org, the Protocol remains entirely autonomous, immutable, and permissionless.”

The update linked to an official post on the company’s blog, which elaborated on their decision further. In the post, Uniswap Labs asserted that their actions were consistent with those of other decentralized finance (DeFi) interfaces. They also said that the tokens in question “have always represented a very small portion of overall volume on the Uniswap Protocol.”

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Furthermore, they assured users that their decision would not impact the Uniswap Interface code, “…or the many other portals or locally run instances used to access the Uniswap Protocol.”

Uniswap Labs also included a full list of the affected tokens in the update. It included a number of Synth and Mirrored tokens, as well as Tether Gold (XAUT) and meme-inspired coins such as Grumpy Cat (GRUMPY).

UNI token sale raises eyebrows

Uniswap had to defend its position on the controversial sale of 500,000 of its native UNI tokens this month. The tokens involved in the sale were donations to the decisive Uniswap DeFi Education Fund (DEF). A fund that has the backing of the Harvard Law Blockchain and Fintech Initiative (HLBFI).

On July 13, the DEF revealed on Twitter that they had liquidated the tokens for more than $10 million in USDC stablecoins. Their tweet noted these funds would go towards further funding the DEF’s efforts.

However, this move provoked some backlash from the DeFi community. It also sparked debate about the transparency of the DEF, as well as issues such as centralization.

Nevertheless, Uniswap stuck to their guns regarding their decision, justifying that the majority of its expenses will be denominated in dollars. As such, they needed to diversify their fund into dollars to account for this.

Even so, the controversy caused a steady fall in UNI’s price. Data indicates the token was worth $21.35 on July 12, but fell to $19.20 within 24 hours. This bumpy decline continued until hitting its lowest point of $14.25 on July 21. Following this, the token has shown some recuperation. At the time of press, UNI was worth $17.81.

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Dale Hurst is a journalist, presenter, and novelist. Before joining the Be In Crypto team, he was an editor and senior journalist at a news, lifestyle and human-interest magazine in the UK. Cryptocurrency was one of the first subjects he specialized in when first going freelance in 2018, reviewing exchanges and analysing lawsuits.

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