- The Uniswap Foundation proposed a governance upgrade to incentivize active and thoughtful delegation by rewarding UNI token holders who stake and delegate their tokens.
- The upgrade introduces two new smart contracts to distribute protocol fees pro-rata to engaged stakeholders, aiming to enhance long-term sustainability and growth.
- A Snapshot vote is scheduled for March 1, 2024, followed by an on-chain vote on March 8, 2024, to implement these changes, subject to community support and audit results.
- This initiative seeks to combat apathy and free-riding, revitalizing Uniswap’s governance system by linking active participation to financial incentives.
The Uniswap Foundation (UF) has announced a significant proposal aimed at revitalizing the governance structure of the Uniswap protocol. This initiative seeks to incentivize active, engaged, and thoughtful delegation by rewarding UNI token holders who stake and delegate their tokens. The proposal outlines a strategic upgrade to the protocol’s fee mechanism, ensuring that those who contribute to the governance process are duly compensated.
The UF’s vision for Uniswap’s governance is focused on fostering long-term sustainability and growth. Success in governance is seen as pivotal to the protocol’s future, influencing key parameters such as fees and the management of the Uniswap Treasury. The proposal is a response to a year of concerted efforts to enhance the delegation experience, including the launch of platforms like Agora 46 for delegators and GovSwap for governance-focused gatherings.
Recent months have witnessed a spike in delegate activity, with significant community-driven initiatives taking shape. However, challenges like free-riding and apathy pose risks to the protocol’s sustainability. With less than 10% of the circulating UNI supply being used to actively participate in votes, and a notable portion of delegations becoming stale, the UF aims to counteract these issues by linking delegation to protocol fees.
The technical backbone of the proposal involves the development of two new smart contracts, designed to integrate seamlessly with the existing Uniswap infrastructure. These contracts, V3FactoryOwner.sol and UniStaker.sol, will facilitate the permissionless collection of protocol fees and distribute them pro-rata to stakeholders who have staked and delegated their votes. This system aims to empower governance by allowing control over fee parameters and incentivizing more dynamic and engaged community participation.
Pending community support, the proposal will undergo a Snapshot vote on March 1, 2024, followed by an on-chain vote on March 8, 2024. This timeline is subject to change based on audit results and community feedback. The UF has emphasized the importance of this governance upgrade for the protocol’s future, encouraging all UNI token holders to participate actively in the upcoming votes.
This proposal represents a pivotal moment for Uniswap, with the potential to significantly impact its governance model and overall protocol dynamics. Stakeholders are urged to familiarize themselves with the proposal’s details and contribute to the governance process, shaping the future of one of the leading decentralized finance (DeFi) platforms.
After this announcement, the UNI token has seen a rise of more than 50%, currently trading around 10.69$.
