Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => DeFi tokens => Topic started by: RSRS on July 16, 2021, 06:32:37 PM
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Recent shenanigans at Uniswap have raised further questions regarding the true nature of decentralized autonomous organizations in the crypto industry.
By design, a DAO should be automated and decentralized, acting without a typical management structure or board of directors. However, that does not appear to be the case with some of the larger DeFi protocols currently operating.
Most of them have governance-based systems that use tokens to measure proposal and voting power. For some of the leading protocols, it appears that a small minority of big bag holders sway more influence over the entire system than the rest combined.
It would be safe to assume then that these governance structures still mirror the forms of shareholder governance used by most public corporations. In other words, they are not decentralized.
The Uniswap Imbroglio
A prime example of this has been unfolding this week. Back in May, the Harvard Law Blockchain and Fintech Initiative (HLBFI) launched a Uniswap governance proposal for the creation of a DeFi Education Fund (DEF). The fund would have an allocation of one million UNI tokens. Such funds would support educational initiatives and political lobbying for the DeFi sector. The HLBFI was one of the dominant forces in the vote, holding 25% of the votes required for a quorum.
The vote passed, and the fund was created. This week, contrary to its pledge to liquidate UNI funds over a four-year period, the DEF sold 500,000 tokens for 10.2 million USDC. As a result, UNI prices have dumped 17% since Monday, and industry observers have demanded more transparency.
More information (https://cryptonews.net/en/news/defi/1075435/)