Uniswap Votes To Transfer Second 1M UNI Grant To DeFi Education Fund 

The DEF shocked the web3 community by abruptly selling half of the 1M UNI grant it received in 2021.

By: Samuel Haig Loading...

Uniswap Votes To Transfer Second 1M UNI Grant To DeFi Education Fund 

Uniswap, the top spot decentralized exchange by trade volume, has voted in favor of renewing its financial support for the DeFi Education Fund (DEF), a web3 advocacy organization.

On May 5, Uniswap governance passed a temperature check proposal requesting 1 million UNI tokens ($7.58 million) in additional funding supporting the DEF’s operations opposing legislative threats targeting the DeFi sector.

Half of the funds will be transferred to DEF’s Coinbase account immediately, with the remaining assets streaming over a 12-month linear vesting period. More than 77% of votes were cast in favor of the proposal, with 10% opposing and nearly 13% abstaining.

“Over the last few years, DeFi’s policy challenges have become more real, more imminent, and more numerous,” DEF said. “DEF has defended DeFi from legislative threats that would require DeFi developers to implement protocol access restrictions or requirements designed for CeFi businesses… Given the steady stream of anti-crypto rulemaking coming from administrative agencies and certain members of Congress, now is not the time to take our foot off the pedal.”

A back-up proposal suggesting alternative funding plans closed with 33.5% of votes supporting an allocation of just 300,000 UNI ($2.27 million), followed by 29.6% of votes backing 1 million UNI, and 27.6% championing a 27.6% allotment. “If the original DeFi Education Fund Temp Check passes, then the original Temp Check will take precedence,” the proposal said.

In March, the DEF sued the U.S. Securities and Exchange Commission (SEC) in a bid to establish a legal precedent that airdropped tokens do not comprise securities investment contracts. The move was intended to protect projects airdropping tokens to early adopters from regulatory action from the SEC.

Sour memories

In July 2021, DEF ruffled feathers across the Uniswap and web3 communities when it immediately offloaded half of the 1 million UNI tokens it received from Uniswap following a governance vote.

The DEF failed to provide advance notice of the sales, eliciting pushback from the crypto community. The backlash was intensified after reports claimed that Larry Sukernik, a DEF committee member, sold $50,000 after the organization dumped its tokens.

In February, Uniswap began selling its remaining funds per an 18-month sales plan intended to provide the organization with a financial runway until July 2025. The plan involves quarterly transfers of 125,000 UNI from its multisig account to fund monthly sales.

In its latest proposal, DEF pledged to hold onto the funds for at least 12 months from the date of receipt, in addition to pre-disclosing any sales prior to offloading UNI moving forward.

DEF said it pays law firms, lobbying organizations, and its employees using U.S. dollars — necessitating the sale of its UNI holdings.

Uniswap Foundation’s financials

On May 3, Uniswap Foundation, the non-profit organization founded in August 2022 to support Uniswap's development, published its financials for 2023.

The foundation said it holds roughly $45.2 million in U.S. dollars and stablecoins in addition to 780,000 UNI ($5.9 million) after spending $3.56 million throughout the year. Nearly 70% of its non-UNI assets are earmarked for past and future grant funding, leaving $13.75 million to fund future operations. Uniswap Foundation said the funds can support its operations until the end of 2025.

A governance proposal published on March 19 estimated that the Uniswap DAO held almost $6 billion in assets, with the funds predominantly comprising UNI. The price of UNI is down 36%, suggesting the DAO’s treasury assets are currently worth around $3.85 billion.