Uniswap Unveils Unichain, Sparking UNI Holder Concerns

Among the largest holders of UNI tokens is raising concerns about Uniswap’s decentralization and undisclosed negotiations, particularly regarding its assertion of “efficiency” as a reason for various changes, including a potential undisclosed financial tie between Uniswap Labs and the blockchain, Optimism.

The Head of Governance at Stanford Crypto, a delegate given authority over UNI governance tokens from numerous individuals, articulated a 22-post complaint about Uniswap’s abrupt decision to create its own blockchain, abandon a proposed fee switch that could have benefited UNI holders, and circumvent the ostensibly decentralized autonomous organization (DAO) purportedly overseeing Uniswap.

The swift rollout of Unichain “took many by surprise” and left “delegates in the dark,” according to Billy Gao, who votes on behalf of his large delegation. He also pointed out that the decision “functionally mutated” the ERC-20 contract of UNI, which is “immutable” only under the most stringent and trivial definition — considering that UNI is now linked to a completely new blockchain.

‘What influence do token holders genuinely possess?’ the delegate lamented.

Uniswap (UNI) and Optimism (OP)

Moreover, Gao soon expressed doubts about a potential undisclosed arrangement that might have financially driven Uniswap’s circumvention of the DAO. Though he didn’t make a formal accusation, he remarked, “there must be reasons behind adopting the OP [Optimism] stack for Unichain.”

Optimism is an independent blockchain that transfers rolled-up data onto Ethereum. The so-called “layer 2” or “scaling solution” launched its own token, OP, which is valued at over $7 billion.

Crucially, Optimism is merely one of the thousands of competitors in the layer 2 landscape atop Ethereum. It actually accounts for less than one-fifth of the total value across all Ethereum layer 2s. The delegate from Stanford Crypto inquired why Uniswap Labs opted for OP and why they should trust that the choice lacked any backdoor arrangements.

Ongoing concerns about Uniswap’s decentralization

There are numerous questions regarding Uniswap Labs’ decision to shift the UNI token away from its initial emphasis on exchange fees. Why didn’t Uniswap select Arbitrum, for instance, the leading market chain that is more than twice the size of Optimism?

Read more: Is Uniswap transitioning closer to TradFi rather than DeFi?

In summary, Uniswap Labs faces another round of scrutiny, representing yet another chapter in its narrative of decentralization theatrics. Previously, the leadership of the seemingly decentralized token exchange has drawn fire for such as Binance, a16z, and even the $700 million Ethereum Foundation.

Now, delegates who believed they had a voice in Uniswap governance are left in disbelief at a rapid decision to introduce a new blockchain, alter the practical use of an ostensibly immutable smart contract, and partner with a second-tier layer 2 with its own token incentives.

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