Wednesday, October 21, 2020

Uniswap’s first community proposal seeks to reduce governance thresholds

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The Uniswap community is currently holding its first-ever vote, set to be completed by October 19. Up for consideration is the reduction of thresholds required to submit governance proposals and quorums.

In recent weeks, there has been much discussion and criticism about the protocol’s standing governance framework. A post by the market intelligence platform Glassnode concluded that with its current setup, only Uniswap’s centralized competitor Binance would be able to successfully submit a governance proposal. Though the latest proposal disproves this assertion, questions about the framework’s efficacy remain.

Uniswap governance currently requires parties interested in submitting proposals to hold 1% of the total delegated UNI supply, while a 4% quorum is required to pass an affirmative vote. Since UNI has a 1 billion supply, these thresholds work out to between 10 million and 40 million tokens. At UNI’s current price of around $3.30, this translates to $33 million and $132 million in staked assets respectively, making consensus a daunting task.

A proposal put forward by Dharma, a protocol that promises novice crypto participants user-friendly access to DeFi, suggests that the proposal threshold should be lowered to 0.3% (or 3 million UNIs) and have a quorum threshold of 3% (or 30 million UNIs). Currently, there are 30,270,543 votes for and 624,701 against the proposal with six days left to vote.

Meanwhile, Uniswap continues to dominate the DeFi world both in terms of the total value locked and exchange volume.

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