Uniswap's $40M Governance Vote Closes on Halloween and Some UNI Holders Fear for Price

Oct 29, 2020 at 22:19 UTCUpdated Oct 29, 2020 at 22:20 UTC.Should users who interacted with Uniswap through a third-party interface be entitled to the free UNI tokens other users received on Sept. 17?That's the question at the center of a dispute currently taking place in Uniswap governance channels.

The second-ever proposal to come before the Uniswap community would distribute airdropped UNI tokens to another 12,619 addresses, ahead of a second proposal set for nearly 27,000 addresses.

The vote closes on Oct. 31 at roughly 8:00 AM UTC.While the vote may look extremely lopsided at the moment, the proposal will fail if less than 40 million UNI vote, establishing a quorum.

If both proposals succeed an additional 15,679,200 UNI would be distributed from the existing treasury, worth approximately $40.6 million, at the current price of $2.59 per UNI. Of that, 5,047,600 UNI would be redistributed from the treasury in phase one.

When the company behind Ethereum's leading automated market maker, Uniswap, announced its governance token, UNI, in September, it surprised everyone by giving away 400 UNI to all wallets that had ever even used the decentralized application.

As a governance token, each UNI can be used to vote on decisions about changes to the dapp and also on expenditures from the Uniswap treasury, which has a supply of 430 million UNI or 43% of the initial supply.

These individuals interacted with Uniswap using third-party software that enabled the transaction, touching Uniswap by way of a proxy contract.

That's why Uniswap decided to leave future decisions about further distributions to UNI holders, Adams said, in part because it is hard to distinguish actual users from the many bots who also use Uniswap at a remove.

There's no way to know how many users of the 15 applications listed on the governance proposals may have already received the airdrop because of interacting with Uniswap directly through another wallet.

"1) it doesn't create any wealth for UNI holders, it 2) takes UNI from the treasury that could be spent on other things and 3) gives it to folks who will likely sell it, probably having a small negative price impact."