Uniswap Foundation’s new governance proposal aims to enable protocol governance by incentivizing token holders through staking rewards.
The Uniswap Foundation (UF) recently announced an innovative governance proposal that seeks to revitalize the governance of the Uniswap (UNI) protocol by rewarding active and committed UNI token holders. The proposal currently up for vote on Snapshot is particularly notable for its focus on using the protocol’s fee mechanism to incentivize token holders delegating and staking their tokens.
Introduction: Push for delegated governance
UF has outlined a vision where the success of Uniswap is directly linked to the decisions made by its management delegates. Success, as defined by UF, equates to the long-term sustainability and growth of the Uniswap protocol. This new proposal is a significant step towards achieving this vision as it seeks to address the problems of idleness and apathy in the current system of governance.
Increased delegate engagement and community initiatives
In recent months, Uniswap has seen an increase in delegate activity, evident by the growth of community-driven governance initiatives. A recent example includes the successful vote to drive the adoption of Uniswap V3 on non-core chains. Additionally, 10 million tokens from the protocol’s treasury were delegated to various delegates, signaling an increasing trend of participation.
Technical innovations to promote delegation
The proposal introduces new smart contracts designed to interact seamlessly with the existing Uniswap ecosystem. The V3FactoryOwner.sol contract would enable programmatic collection of protocol fees, while the UniStaker.sol contract would manage the delegation and distribution of these fees to UNI token holders who stake and delegate their votes.
A multi-layered approach to management
UF’s approach to management is not singularly focused. It includes the creation of platforms such as Agora to find representatives, Delegate Race to launch delegate platforms and Bridge Report to provide important information for informed decision making. In addition, UF is planning a series of in-person gatherings, beginning with GovSwap at ETHDenver, to promote common purpose among delegates.
The Way Forward: Audits, Polls and Community Engagement
UF laid out a clear roadmap for the proposal, with a snapshot vote already published and an on-chain vote planned. The contracts included will be subject to strict scrutiny, including a Code4rena audit competition and a final report from Trail of Bits. Immunefi’s bug bounty will also be implemented prior to on-chain voting to ensure the highest security standards.
Call to Action for UNI Token Holders
The proposal emphasizes the importance of the active participation of UNI token holders. This is a call to action for token holders to delegate carefully, as their decisions will have a lasting impact on the future of the protocol. If the proposal is approved, it will require re-delegation for existing delegates to receive protocol fees under the new system.
Conclusion: A step towards sustainable DeFi governance
UF’s proposal represents a significant change in Uniswap’s governance model. By linking protocol fees to delegation, it aims to create a more engaged and accountable governance community. This could pave the way for a sustainable model of decentralized governance in the wider DeFi landscape.
The Uniswap community and stakeholders are now looking forward to the outcome of the snapshot and subsequent on-chain voting. The success of this proposal could herald a new era of governance for one of the leading protocols in the DeFi space, with potential implications for the entire Ethereum ecosystem.
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