Nearly 60% of votes were cast against a proposal that would allow the DAO to change Uniswap\u2019s fee mechanism.<\/p>\n
The Uniswap community has rejected a governance proposal seeking to make changes to its fee mechanism that would allow the distribution of revenue to tokenholders.<\/p>\n
The voting period for the\u00a0proposal<\/a>\u00a0closed on March 9, with 59.9% of mobilized UNI cast in opposition. The proposal sought to allow the DAO to make future changes to Uniswap\u2019s fee mechanism, paving the way for activation of a long-awaited Uniswap \u201cfee-switch\u201d which could distribute protocol revenue to UNI holders.<\/p>\n The proposal was shot down two days after a separate\u00a0proposal<\/a>\u00a0to enable protocol revenue collection was passed with borderline unanimous support.<\/p>\n Community members have long sought the activation of a fee-switch since Uniswap\u00a0airdropped<\/a>\u00a0its UNI token to early adopters in 2020.<\/p>\n <\/p>\n GFX Labs, the DeFi-focused research and development firm that co-authored the latest fee switch proposal, launched a similar\u00a0proposal<\/a>\u00a0last year, suggesting that either 10% or 20% pool fees could be disbursed to tokenholders.<\/p>\n The proposal was shot down with 45.3% of votes cast against it, while 42.3% of votes backed a 20% fee distribution and 12.3% supported a 10% fee \u2014 meaning the majority of votes were cast in favor of activating some form of fee switch despite the proposal ultimately failing.<\/p>\n A common criticism\u00a0levied<\/a>\u00a0against the proposal was the risk of the Uniswap protocol or its core team incurring tax or legal liability as a result of fee distributions.<\/p>\n \u201cThe whales that dominate Uniswap governance (a16z, Hayden, etc) refuse to activate the fee switch because they don’t want to create a legal liability,\u201d\u00a0tweeted<\/a>\u00a0Chris Blec, an outspoken web3 commentator.<\/p>\n Discussions surrounding the recent proposal gave rise to concerns surrounding the security and technical risks associated with allowing Uniswap’s DAO to make changes to the code underpinning the protocol’s fee mechanism.<\/p>\n \u201cUpgradeable contracts introduce the ability for governance to rug token holders \/ ecosystem builders,\u201d\u00a0said<\/a>\u00a0Leighton Cusack, the founder of Pool Together. \u201cIt will be hard for this system to get traction if it can be changed.”<\/p>\n <\/p>\nThreats and concerns<\/h2>\n
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