So, a big voice in the Uniswap DAO just decided he’d had enough and walked away. Pepo, that’s the name he uses, was a major delegate (someone token holders trust to vote for them). He felt like the folks running the show weren’t really listening to the community anymore. Kind of frustrating, right?
- Pepo, a major delegate, left the Uniswap DAO, citing concerns about the Foundation’s responsiveness to community input.
- He felt the Uniswap Foundation prioritized its own interests over collaboration, potentially harming Uniswap.
- Other delegates have also raised issues about the DAO’s control and transparency within the Uniswap ecosystem.
Pepo wasn’t just some small fry. He held a huge pile of UNI tokens (that’s the special token that gives you voting power in Uniswap). We’re talking 455,000 tokens, which put him up there with the big players, in the top 20 delegates. He’d been involved in the governance (the system for making decisions) since 2023.
His main reason for leaving? He said the Uniswap Foundation, a non-profit group meant to support the protocol (the set of rules and code Uniswap runs on), and maybe even Uniswap Labs (the company that built it), were pushing aside the opinions of the DAO members. He felt they weren’t open to feedback.
Pepo put it pretty strongly in a post online. He said the Foundation seemed more interested in protecting itself than working together. And he felt this approach might have actually harmed Uniswap.
The Foundation’s behavior seems to have prioritized insulation over collaboration, and in doing so, may have actively harmed Uniswap.
https://x.com/0xPEPO/status/1919420425928348118
What did the Uniswap Foundation say about this? Devin Walsh, the Executive Director, didn’t talk directly to the reporters asking about Pepo’s accusation. But she did respond on social media.
She said having delegates involved is really important for the Uniswap ecosystem (the whole network of users, developers, and related projects) to succeed. And she added that the Foundation takes their feedback seriously.
Delegate participation is essential to the success of the Uniswap ecosystem. The Uniswap Foundation takes their feedback seriously.
https://x.com/devinawalsh/status/1919805196193890790
Let’s zoom out for a second. Uniswap is a giant in the world of decentralized finance (DeFi). It’s the biggest decentralized exchange (DEX), holding around $4 billion worth of deposits right now. Though, just for perspective, that’s down quite a bit, about 60%, from its highest point back in 2021-2022.
Running a big DeFi protocol like this isn’t simple. It’s got a few different parts that are supposed to work together, but sometimes it feels a bit like trying to herd cats.
You have Uniswap Labs, the company that created the code and keeps building it. Then there’s the Uniswap Foundation, the non-profit tasked with helping the community and the protocol grow. And finally, the Uniswap DAO, the decentralized autonomous organization (a group run by code and token holders) that’s supposed to control the big decisions and how money is spent.
Earlier this year, in March, the DAO actually gave the Foundation a massive $165 million grant. The idea was to help boost growth. This big chunk of cash gave the Foundation a lot of freedom to pursue its goals without needing to get the DAO’s OK on every single thing.
And that’s where some of the friction comes in. People like Pepo feel that the Foundation’s actions, and maybe Labs’ too, are putting their own interests ahead of what the DAO members want. It highlights this ongoing challenge in DeFi: how do you balance the power between the token holders (the DAO) and the groups actually doing the building and supporting (Labs and the Foundation)? It’s a tricky balance beam to walk.
Pepo isn’t the only one who has pointed out issues with how much control the DAO really has at Uniswap. This isn’t a brand new complaint, it seems.
Back in October, another delegate, Billy Gao, who’s involved with the Stanford Blockchain Club, spoke up. He said Uniswap Labs’ sudden decision to launch its own blockchain (a type of shared digital ledger) raised serious questions about the DAO’s role in governance.
Billy felt the DAO should have been told about the blockchain plans way ahead of time. He thought they should have had a chance to weigh in on important decisions about how it would work. He questioned, quite directly, how decentralized Uniswap’s governance actually is if big decisions like that happen without the DAO’s full involvement.
Uniswap Labs’ sudden decision to launch its own blockchain “raised serious questions about DAO governance.”
https://x.com/__billygao/status/1847776831782691226
Uniswap Labs didn’t respond right away when asked about Billy Gao’s comments.
Beyond Labs, some people have also wondered about how the Uniswap Foundation is spending that big $165 million grant money. They’ve complained that the Foundation isn’t transparent enough (clear and open) about where the money goes and how they make decisions.
Doo Wan Nam, who helps DAOs with their governance, is also a Uniswap delegate. He told reporters that transparency and good communication are things many delegates agree are important. He did say there have been some improvements lately.
In fact, just recently, on May 1st, the Uniswap Foundation did respond to some of this criticism. They created something called a Foundation Feedback Group. The idea is to make sure communication between the Foundation and the DAO is better and to strengthen accountability (being responsible for your actions).
Also, because the Foundation is set up as a non-profit company, they are legally required to publish their finances for everyone to see. So, the information does become public eventually.
But for some delegates, even with these steps, it’s still not quite enough. They feel like the core issues haven’t been fully addressed.
As another delegate, PaperImperium, who works with a group called GFX Labs, put it, it’s a real shame for any DAO when a delegate feels like the only way they can actually make an impact or get attention is by stepping down completely. It feels like a loss for the community.
And here’s another interesting point that came up. Some people involved in the governance process complained that a lot of the important discussions and decision-making happens privately. It doesn’t always happen out in the open on the public Uniswap governance forums where anyone can read along.
This has led to complaints that major decisions are basically agreed upon by the large delegates (the ones with lots of voting power) in private chats before they are even presented for a public vote. It feels like the outcome is already decided.
Doo Wan Nam said that it’s actually necessary for proposals to get some initial feedback and discussion before they are put out there publicly. You need to refine them, right?
He compared it to traditional government. He said politicians won’t just write big laws without talking to the people involved or other politicians first. It makes sense, you need to gauge support and get input.
But, and it’s a big ‘but’, this private communication is kind of a double-edged sword. As DAOs get bigger and more mature, there’s a feeling that they are starting to become more about politics and how things look (appearances) rather than just focusing on what’s truly best for the actual technology and rules (the protocol).
It’s a tricky line to walk, balancing necessary private discussion with the ideal of open, decentralized governance. And it seems like at Uniswap, that line feels a bit blurry for some of the key players.
