DeFi protocol, Uniswap, is currently having its first governance vote, but members of the crypto community have noticed that the whales are dominating the voting process.
The first proposal was made by the DeFi lending and trading platform, Dharma. The platform is among the largest UNI token holders. To make governance more accessible, Dharma wants to minimize the current proposal submission threshold from 10 million UNI, which is just 1% of the total supply, to 3 million or 0.3%.
The second part of the proposal aims at decreasing the quorum threshold from 40 million UNI to 30 million. Crypto observers have highlighted that this would give the highest part of voting power to the top two token holders, which are Dharma and Gauntlet (a blockchain simulation platform).
However, some crypto enthusiasts have launched a campaign to encourage others to vote against it.
Uniswap Whales are leading
The vote will continue until October 20, but it seems that the two top delegating addresses that hold 15 million UNI each have dominated the voting process, with about 98% of the votes ‘for’ according to the counter.
Chris Blec (DeFi Watch founder) has criticized the process since the beginning of the proposal. He asserts that it is making Uniswap a more centralized platform rather than the opposite.
In one of his recent tweets, Blec mentioned that there are 13 million votes left, and an address owned by Yearn Finance’s Andre Cronje controls almost half of the votes.
Although the idea of community governance is a noble one, it is not plausible if a tiny fraction of whale-controlled addresses owns the majority of the tokens, as the case is for Uniswap.
Sometime last month, Glassnode (an on-chain analytics firm) became interested in the governance mechanisms for Uniswap and the importance of the UNI token, asserting that it may not be decentralized after all.
The report also revealed that even Binance is a UNI whale with 26 million tokens held. So, in essence, it could also sway community voting decisions. If this proposal passes, then the total votes of Dharma and Gauntlet will surpass others going against them, and they will end up controlling Uniswap.