Uniswap (UNI) and Optimism (OP) Raise Lingering Questions About DAO Governance and Decentralization

One of the largest holders of UNI tokens is questioning Uniswap’s decentralization and backroom deal-making, specifically, its claim of “efficiency”

Stanford Crypto delegate Billy Gao has raised concerns over Uniswap’s recent decision to launch its own blockchain, questioning the level of decentralization and transparency within the DAO. Gao, who casts votes on behalf of thousands of UNI governance token holders, expressed surprise at the sudden launch of Unichain, which was announced without prior consultation with delegates.

The move also effectively altered the ERC-20 contract of UNI, tying it to a new blockchain despite its supposed immutability. Gao highlighted the disconnect between this action and the decentralized autonomous organization that is meant to govern Uniswap.

“What control do token holders truly have?” Gao lamented in a 22-post thread on Twitter.

Moreover, Gao raised suspicions of a backroom deal that could have influenced Uniswap’s decision to bypass the DAO. While not making a formal allegation, Gao pointed out that there must be reasons for adopting the Optimism (OP) stack for Unichain.

Optimism is a separate blockchain that rolls up data and publishes it on Ethereum. The layer-2 protocol also has its own token, which is valued at over $7 billion. Notably, Optimism is just one of thousands of competitors in the layer-2 ecosystem on Ethereum.

The Stanford Crypto delegate questioned why Uniswap Labs chose OP and whether everyone could trust that the decision was made without any backroom deal-making.

The decision also raises questions about Uniswap Labs’ decision to repurpose the UNI token away from its original focus on exchange fees. For instance, why didn’t Uniswap choose Arbitrum, the market leader that is more than twice the size of Optimism?

The development marks another chapter in the saga of critiques against Uniswap Labs, which have centered on its claims of decentralization. Past criticism has highlighted the power endowed to centralized entities like Binance, a16z, and the Ethereum Foundation.

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