Aug 5, 2022 - Economy & Business

Uniswap looks to spend some of its giant treasury

Illustration of a hand putting a ballot into a slit at the top of a safe as if it were an ballot box.
Illustration: Aïda Amer/Axios

The richest DAO in DeFi wants to spend more of its money.

Driving the news: A vote went up Thursday to launch the Uniswap Foundation, with a three-year budget of $74 million from the decentralized autonomous organization's $3.9 billion treasury.

Why it matters: Crypto projects are actively expanding into different parts so they can have more and more qualities of "decentralization."

  • Uniswap is a decentralized exchange that always has a buy and sell price for every asset it lists. It is a peer-to-peer, automated market maker. Like any decentralized application (or dapp) it doesn't need humans behind it to operate, but it does need them to change.

The big picture: Uniswap has a lot of money and its community really does want some of those funds spent to develop more things to do with Uniswap, because the more it gets used, the more valuable it becomes.

In the weeds: The plan is to support various efforts.

  • The largest set of funds would go toward encouraging developers to make apps and other code that will stimulate activity around Uniswap.
  • Part of it would also be spent toward development on the actual protocol, research around it and serving the community that exists around it, such as with events.

What they're saying: "Uniswap’s community is expansive, encompassing the universe of individuals and organizations which build on and benefit from decentralized protocols," former Uniswap Labs staffer Devin Walsh wrote in the proposal to launch the foundation. "Your contributions have already made Uniswap a success, but we want to help you accomplish much more."

  • Uniswap Labs is the company that wrote the code behind all three versions of Uniswap. Walsh, who has since left, is an alum of CoinFund, ConsenSys and other crypto efforts.

Zooming out: The vote will be decided by those who hold the UNI token. Each UNI represents one vote in the final decision.

  • The current proposal is a "temperature check." It's an informal vote plus a discussion that comes out ahead of a final vote, according to the DAO's governance process.

Flashback: UNI holders voted to launch the Uniswap Grants Program in late 2020, which was given a smaller budget to support efforts to build out more ways into the exchange.

  • According to a June report, it has given out about $7 million in UNI to 122 grantees.

💭 Our thought bubble: The approval of this proposal is very likely in the bag already.

  • There are many whales with control of a large amount of UNI, and they are likely to line up quickly behind a proposal that comes from a recent a Uniswap Labs alum.

Editor's note: This story has been updated to clarify that the writer of the proposal to launch the Uniswap Foundation, Devin Walsh, had left Uniswap Labs.

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