New Glassnode Uniswap report shows that the governance mechanisms of the platform point out that it could be centralized and controlled by Binance as we are about to read more in the latest Binance news.
Uniswap made a bold move by airdropping millions of tokens and launching its own liquidity pools to reclaim what SushiSwap took from it in the past two weeks. It has propelled the platform back to the biggest decentralized exchange as the total value locked hit $2 billion while the sushiSwap rival declined. Uniswap made it clear that about 40% of the UNI tokens will be allocated to the team and the advisors as well as the investors with about a half of that going to the last two. The new Glassnode uniswap report explained that this only alludes that the protocol falls short of true decentralization.
Liesl Eichholz who penned the Glassnode report questioned the distribution of these tokens which was supposed to happen in four years’ time. However, the public schedule for vesting was not announced. she added that it was concerning that these tokens seem to be fully liquid and are held in regular ETH addresses that have no transfer restrictions. The term “vesting” was used loosely by Uniswap and the method of storing the tokens effectively gave the team and investors admin rights over the protocol by saying that “the Uniswap team and investors have allocated themselves an immense proportion of the total supply of UNI tokens. The pie chart fees more reminiscent of a 2017-style ICO than a 2020-style fair launch.”
Why aren’t these vesting tokens under some kind of timelock?
— Liesl Eichholz (@liesleichholz) September 24, 2020
The report continued to criticize Uniswap’s governance model noting that in order to submit a proposal at 1 percent of the entire UNI supply has to be possessed and about 4% of the total supply or 40 million tokens is required for a quorum. The report stated that about 15 addresses control at least 10 million UNI tokens four of which are reversed for the government treasury and one is the airdrop address of distribution. Of the remaining ten addresses, nine of them contain part of the team and the investor’s allocation.
Assuming that the allocation of the latter will not be touched, it leaves one address which has enough UNI tokens to submit a governance proposal. That address is believe it or not owned by Binance and has around 26 million tokens:
“This means that even though the governance treasury will be unlocked in less than a month, currently only Binance – a centralized exchange in direct competition with Uniswap – has the power to propose uses for these funds.”