Uniswap Foundation Proposal Clears Hurdle

Voting is underway on a proposal to create the Uniswap Foundation (UF), a new organization that will, if passed, “support Uniswap’s decentralized growth, reinvigorate governance, and serve as an advocate for the protocol.”

So far, voters are unanimously in favor of the move, with 50.56M UNI tokens voting for it. A proposal must receive a minimum of 40M affirmative votes and win the majority to pass.

Devin Walsh, who led protocol and venture investments at CoinFund and has been involved with crypto since 2016, would serve as the UF’s executive director. “Through providing grants and working on strategic UF initiatives, our goal is to ensure the Protocol survives and thrives for the long term,” Walsh told The Defiant.

Uniswap Grants

The proposal calls for an operating budget of $14M with roughly 90% earmarked for salaries to sustain a 12-person team for three years. It’s also requesting $60M to expand the Uniswap Grants Program (UGP), which the Foundation would be tasked with administering.

Anticipated Grants Spending Breakdown

The UGP has already deployed roughly $7M in UNI tokens to 122 grantees, according to Ken Ng, who has led the program since its inception a year and a half ago. Ng would serve as the Foundation’s head of operations if the proposal were to pass.

The funds for the UF budget would come from the Uniswap treasury, which is the largest in crypto at $3.63B, according to openorgs.info. However, that number comes with the caveat that the treasury is entirely composed of UNI tokens, making it more volatile than a diversified basket of assets.

Legal Entity

Walsh and Ng have already incorporated a legal entity, Uniswap Foundation, in Delaware, but don’t see that necessarily being the foundation’s final form. “We are contemplating a US-based entity that would seek tax-exempt status,” says the proposal.

The UF proposal also seeks 2.5M UNI tokens to participate in Uniswap governance. The foundation will have access to these tokens only as delegated votes, without the possibility of selling them.

In terms of reworking Uniswap governance, the proposal cites the working constitution of the Optimism Collective as a source of inspiration.

Underscoring the regulatory uncertainty in crypto, $2M of the Foundation’s $14M operating budget would be set aside for potential legal expenses.

Projected Use of Operating Funds

The UF would exist alongside Uniswap Labs, the company helmed by the protocol’s founder, Hayden Adams. Voting ends on Aug. 23.

UPDATED on 8/18 @ 2:20pm ET with a comment from Devin Walsh.