Uniswap’s first governance vote fails … despite 98% support

The first governance vote for decentralized exchange (DEX) Uniswap has ended in failure, despite the proposal attracting overwhelming support of 98% of votes cast. Despite this, it fell roughly 1% short of the 40 million votes threshold needed for approval by the close of voting.

The poll ended earlier today with almost 39.6 million UNI staked in favor, compared to roughly 700,000 opposed. DeFi blogger Danger Zhang (‘@safetythird’) described the vote as “the DeFi equivalent of winning the popular vote but losing the electoral college.”

Ironically, the proposal sought to reduce the number of tokens needed to submit and pass proposals. It was put forward by open-source lending protocol and major UNI token holder, Dharma, 

Currently, proposals can only be made by entities holding at least 1% of UNI’s circulating supply (10 million UNI, worth around $30 million), and need to surpass 40 million total votes (worth $130 million) to pass. Dharma’s recommendations would lower the thresholds so holders of at least 3 million ($9 million) UNI could suggest upgrades, and only require 30 million supporting votes ($100 million) for a proposal to pass.

Responding to the vote’s conclusion, Dharma CEO and co-founder Nadav Hollander described the result as “a disappointing outcome that demonstrates the impetus for the proposal in the first place.”

However, Dharma’s proposal was not welcomed by all within the DeFi space, with critics pointing out that if it passed just two entities, Dharma and blockchain simulation platform Gauntlet, would almost have the number of tokens needed to find quorum between them. Dharma currently controls 15 million UNI in a single address.

Some onlookers hailed the vote as a success, with crypto developer Agustin Aguilar arguing that voter abstinence should be understood as a barometer of opposition to the proposal:

It’s impossible to know how many of the abstained votes wanted to vote no, with a quorum of >50% abstaining means voting no, and many voters knew that

— Agustín Aguilar (@Agusx1211) October 19, 2020