What are the risks of capital-intensive DAOs highlighted by Uniswap?

Uniswap expansion strategy

It turned out that a16z Crypto, the cryptocurrency investment division of the famous US VC Andreessen Horowitz, voted against Uniswap, the largest decentralized exchange (DEX), in the final vote in its expansion plan to the BNB chain.

It is believed that Wormhole was selected in a preliminary vote on the application used to transfer assets (bridge) to the BNB chain. There is a background that a16z has invested in “LayerZero” which is a rival horse.

As a result of voting 15 million votes held by a16z against the BNB transition plan around the 5th, the opposition voted 66.9% at one point, but as of the 7th, the support vote increased to 69.39%. The situation is booming.

Uniswap Delegates

Vote on deploying Uniswap v3 to @BNBCHAIN ends this Friday afternoon EST https://t.co/S5e3D5mKru https://t.co/CnQ8Td3wFK

—Uniswap Foundation (@UniswapFND) February 7, 2023

connection:Decentralized exchange Uniswap to support token bridge ‘Wormhole’

Uniswap BNB chain expansion

Since December 2010, the Uniswap community has been discussing the direction of promoting multi-chains by April 1, 2023, when the business license for the source code expires.

A16z, who is in the midst of the whirlwind, also said, “In order to avoid the proliferation of fork (copy) applications, we should develop an official Uniswap that users can trust as soon as possible.” In the discussion of choosing one token bridge, he recommended LayerZero, but stated that “the final decision rests with the community.”

Wormhole then won the bridge spot with 62% of the vote in the first round of voting, which ended on February 1st. Since this voting eligibility was based on the holding history of the crypto asset (virtual currency) UNI, a16z who had UNI held in a trust company at the time the record was obtained could not participate.

A16z has 15M UNI tokens!

Shouldn’t they support LayerZero?

Yes…but they couldn’t vote because they’ve custodied their UNI tokens with @FireblocksHQ

This prevents them from voting on off-chain proposals

But they CAN vote on on-chain proposals pic.twitter.com/VTBXNXHlvx

— Abdullah Umar ~ ubermar (@abdullahbumar) February 5, 2023

However, a16z is also available to vote in the final vote currently being held (February 3-10), and has voted against the entire plan due to the political reasons for choosing the bridge.

connection:High interest in “Soulbound Token (SBT)” advocated by Ethereum founder Buterin

community backlash

Uniswap is the largest decentralized protocol managed by DAO (Decentralized Autonomous Organization). There are 370,000 token holders and 28,000 users have participated in community voting in the past.

This trend of large-scale holders prioritizing their own interests and trying to reverse the huge amount of discussion that the community has spent has attracted attention in the Web3 (decentralized web) industry as questioning the way DAOs should be. .

It has also been noted that lobbying by stakeholders was prevalent among the Uniswap community at the stage of choosing the token bridge. The final candidates for the bridge were said to have been narrowed down to highly funded projects: Wormhole, which is backed by major cryptocurrency VC companies Jump Crypt and Paraf icapital, and LayerZero, which is invested by a16z and Sequoia Capital.

Abdullah Umar, head of governance at Blockchain at Michigan, which manages 3.5 million UNIs, said he was approached by both stakeholders. Neither bridge protocol has issued tokens yet, so early investor influence plays a big role throughout the process, he said.

Uniswap controlled by a16z? https://t.co/9QTi1KjVjG

— CZ Binance (@cz_binance) February 5, 2023

Changpong Zhao (CZ), CEO of Binance, the largest cryptocurrency exchange, pointed out that “on-chain voting is just a mechanism where a big whale controls the blockchain” and is no different from a major shareholder of a corporation. .

Ethereum co-founder Vitalik Buterin is advocating “Soulbound Token (SBT)” as a governance token solution to the current situation where such capital-intensive economic power speaks for itself.

SBT is a digital identity in the Web3 era that proves the characteristics, experiences, and achievements of individuals and organizations, and has characteristics that cannot be transferred to others once distributed. Mr. Buterin sees SBT as a component of forming the next-generation “decentralized society (DeSoc)”. It can also prevent the borrowing of power.

@bsc_daily x #BAB Holder Giveaway

Tasks:
• Must be a Binance Account Bound Token holder
• Subscribes to the BSC Daily Newsletter
• Retweet & Like Post

Join event on Galxehttps://t.co/xqO6RDR4mc

Read more OAT Holding Benefits#BNB #BSC #WEB3 #SBT pic.twitter.com/m9Z30NkM2B

—BSC Daily (@bsc_daily) December 7, 2022

Binance has adopted SBT in Q3 2022 and issued its first SBT, “Binance Account-Based (BAB)”. It has been put into practical use, such as incorporating BAB possession as a requirement for giveaway. According to analytics firm Messari, the introduction of SBT increased the average number of daily active addresses on the BNB chain by 30% over the last quarter.

connection:Binance to Issue Soulbound Token on BNB Chain

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