Decentralized exchange Uniswap’s second governance proposal fell just short of the 40 million votes required to pass.
The defeated proposal would have extended September’s massive UNI token airdrop to proxy users. Controversy has also arisen that the vote ended unduly early.
Few who opened Uniswap on Sept. 17 expected to see over $1,000 worth of tokens appear out of nowhere, but that’s just what happened to Uniswap users. Any wallet that had used Uniswap before Sept. 1 received 400 UNI tokens for free.
Well, almost any wallet. Several aggregators and wallets that used Uniswap’s protocol via their own interface missed out on the airdrop. Chief among them was Dharma, a mobile wallet that claimed to offer Uniswap trades over DeFi without Ethereum fees. In a discussion posted on YouTube, Dharma CEO Nadav Hollander said that not including these aggregators and wallets was “punishing” developers who took a chance on Uniswap’s protocol.
Hollander submitted a proposal to expand the airdrop to proxy users on Uniswap’s governance website, saying he did not believe proxies were intentionally excluded. Thus, any wallet that used Uniswap’s protocol should also receive the 400 UNI airdrop.
Uniswap proposal #2 (2nd airdrop) has been defeated pic.twitter.com/49Kub2V3fc
— Agustín Aguilar (@Agusx1211) October 30, 2020
Finally, the proposal was put to a vote that concluded on Oct. 31. UNI token holders used their tokens to cast votes. The ballots came in overwhelmingly to accept the proposal. However, they fell short of the 40 million required to form a quorum. The proposal was rejected.
For and Against
Though Hollander emphasized he considered that the omission of Dharma wallet holders was an “oversight,” discussion ran hot on the governance forum. Many proponents claimed not to be in it for the “free money” but the principle of the thing.
On the other hand, some users felt that loyalty to the original Uniswap was the true criterium for deserving the airdrop.
Meanwhile, many on Twitter were happy to see the proposal fail. Another UNI token airdrop would dilute the token pool, devaluing the token and incentivizing selling.
On to the next one, hopefully it will be a proposal to incentivize folks to hodl $UNI.
— DaoChemist (@DaoChemist) October 31, 2020
According to the proposal, 12,619 accounts would have received airdrops worth $11,458,052. That money would not just appear out of thin air, and if many users chose to dump their UNI tokens, the price would indeed drop.
Every Vote Counted?
While governance projects are supposed to put decisions in the hands of the community, critics have stirred up a controversy surrounding this vote. Though rejected, the proposal received over 37 million yes votes and fewer than 2 million votes against it.
Some Twitter users pointed out that the voting was to end at 3:53 AM EDT time but actually ended about six hours earlier. They claim those few hours could have made a difference, as some UNI holders might have been waiting to vote at the last minute.
This is only the second UNI governance proposal. The first one also came very close to passing but was ultimately rejected. It was also proposed by Dharma labs and would have lowered the submission and quorum thresholds. That vote came even closer to reaching the 40 million vote quorum, with 39.6 million votes.
Critics warned this first proposal would effectively leave governance power to only a few addresses. If this is so, then so far the proposal rejections have protected the little guy. But with votes so close to quorum, a proposal could be accepted soon.