The third governance vote for decentralized exchange Uniswap has begun, and it proposes creating a grants program for the platform.
DeFi automated market maker Uniswap has started its third governance vote, which outlines a framework for funding the ecosystem’s development with grants from the UNI Community Treasury.
At the time of writing, the vote, which ends on December 24, had an overwhelming majority of 99.98% in favor of the proposal.
Compound Finance founder Robert Leshner had also pledged his support for the initiative via a tweet.
Uniswap Proposal 3 is now live – to create a Uniswap Grants Program:https://t.co/4P5skvWlcN
Have $UNI tokens in Compound?
You can vote on how the Compound protocol uses those tokens to vote in Uniswap governance (meta!).https://t.co/jni6QyltJp
— 🤖 Leshner (@rleshner) December 18, 2020
The program will start small by sponsoring hackathons, for example, but could grow in significance over time to fund core protocol development, it added. It also proposed the creation of a six-member committee to administer the Uniswap Grants Program (UGP).
It also proposed that the program starts with an initial cap of $750,000 per quarter and a limit of two quarters before renewal. Kenneth Ng, who has helped grow the Ethereum Foundation Grants Program over the last two years, was proposed as the head of the committee.
“If this proposal is successfully approved, UGP will start accepting applications on a rolling basis beginning at the start of 2021.”
It is very unlikely that there will be many votes against this proposal, which has been widely viewed as positive for the Uniswap ecosystem.
Previous Votes Dubious
Previous Uniswap governance votes, however, have been mired in controversy as the first one was dominated by Dharma, a DeFi exchange and UNI whale. Dharma proposed a reduction of the proposal submission threshold from 10 million UNI, or 1% of the total supply, to 0.3% and dropping the quorum threshold from 40 million UNI, or 4% of the total, to 3%.
This would have effectively given the bigger UNI bag holders, such as Dharma, more control over the protocol. At the time, it sparked off a centralization debate with many industry observers being openly critical of these attempts to gain muscle control of protocol governance.
Fortunately for decentralization advocates, the proposal was defeated, having failed to reach quorum despite the whales voting in favor.
UNI Price Reaction
The current vote has had very little impact on UNI prices as expected. The token has made a gain of 1.3% on the day, reaching $3.49.
UNI has gained 8.5% over the past week as it remains within a sideways channel. Since its peak during the token launch and big airdrop, it spiked to top $7 but has currently retreated by 50% from those heights.
Total value locked on the protocol is currently $1.5 billion, according to DeFipulse.com, which puts it at fourth place on the TVL list.
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