On October 14, Blocdesk reported that the Uniswap community initiated the first-ever governance voting for the decentralized finance (DeFi) protocol. The proposal made by Dharma sought to reduce the Uniswap’s governance thresholds for proposing and passing an update into effect. Although most of the votes from the community supported Dharma’s proposal, it still failed, which is disheartening. Multiple community members are disappointed with the outcome.
The failure of the first Uniswap governance proposal was because the voting threshold was not met. Noteworthily, this is the same reason why Dharma made the proposal. It now becomes clear why the proposal needs to pass into effect. The community is in charge of governing the protocol. if their voice is not heard, there may be some dissatisfaction down the line.
The Uniswap 40 Million Voting Threshold Challenge
The decentralized exchange, Uniswap, saw its first governance voting exercise end today. Close to 39.6 million community members voted in support of the proposal by Dharma. This represents about 98 percent of the total votes cast. Meanwhile, a very poor number of voters (roughly 700,000) wasn’t in support of the proposal. The saying, ‘majority carries the vote’ clearly isn’t the case here, as the votes didn’t reach the threshold.
Uniswap’s threshold holds that a community member needs to possess at least 10 million UNI token to suggest an update. This accounts for one percent of the token’s circulating supply or about $30 million. Additionally, total votes need to surpass 40 million before a proposal is signed into effect on the DEX. Consequently, the just-concluded voting became invalid, given that the support couldn’t reach 40 million votes.
Dharma Responds to Failed Vote
Dharma wants a reduction of the thresholds for proposing from 10 million UNI to 3 million UNI. Additionally, Dharma proposes the reduction of 40 million votes needed for passing an update into effect to 30 million. The CEO of Dharma, Nadav Hollander, commented that the development is “a disappointing outcome that demonstrates the impetus for the proposal in the first place.”
A disappointing outcome that demonstrates the impetus for the proposal in the first-place:
Despite the vote having 85+% turnout (!), >95% support, with 272 voting FOR and 48 voting AGAINST, the vote still failed.
There is a silver lining, though… https://t.co/iXZgwxC5da
— Nadav from Dharma (@NadavAHollander) October 19, 2020
It is worth noting the proposal initially faced criticism from some of the community members. They feared that if passed, the proposal might shift the governance control to UNI top holders like Dharma. For now, the status quo between all parties remains in place. Only time will tell if that is a positive development or not.