Uniswap DAO votes to take back $42m of governance tokens loaned to delegates

The digital cooperative governing Uniswap, the biggest decentralised exchange, is voting on a proposal to take back some $42 million worth of governance tokens from delegates.

Between 2022 and 2023, Uniswap’s decentralised autonomous organisation, or DAO, loaned out 12.5 million UNI to the nonprofit Uniswap Foundation and several top delegates in a bid to boost governance participation.

According to Erin Koen, the proposal’s author and governance lead at Uniswap Labs, the protocol’s governance is now much more active, meaning that the loaned tokens have served their purpose.

“Today, Uniswap’s governance environment looks very different,” Koen said.

“UNI holders have been actively delegating voting power, and since DUNI was established, passed proposals have averaged roughly 75 million votes in turnout, exceeding quorum by approximately 88%.”

DUNI, Uniswap’s Decentralized Unincorporated Nonprofit Association, is a legal entity that recognises onchain governance votes as legally binding and shields DAO members from personal liability for collective decisions.

Truly decentralised?

The proposal to take back the loaned tokens comes as Uniswap Labs and the Uniswap Foundation work to address criticism that the protocol’s governance system isn’t as decentralised as it appears to be.

Critics have previously argued that the Uniswap Foundation holds too much influence. They say it often makes key decisions unilaterally or pushes proposals without sufficient community input…