The Uniswap DAO has voted to invest 3 million UNI ($12 million) from its treasury into decentralized exchange Ekubo, in exchange for a 20% share of a potential governance token.
“We at Ekubo, Inc. believe this is an extremely important step in the decentralization of Uniswap protocol development, effectively establishing the Ekubo team as core developers,” said Ekubo founder Moody Salem in the original proposal.
The vote for Snapshot passed with 21 million UNI tokens in favor and 12 million tokens against, meaning that 63% of the tokens that voted were in favor of the move. Five token holders compromised 97% of the votes in favor of the move. There were more than 3,500 votes in total.
Salem said he was a former chief engineer at Uniswap – and the fifth employee at the company – before starting Ekubo and has contributed significantly to the codebase. Ekubo is a decentralized exchange on Starknet and has committed $2.5 million in value to its smart contracts, per DefiLlama.
The 3 million tokens, which will be liquid, will be used to fund Ekubo’s operations, as well as contribute to the Uniswap protocol, Salem said. “Much of the work will involve delivering public goods to the Starknet ecosystem, including standard token, governance, and incentives contracts written in Cairo, all of which are needed to scale Starknet to same level of usage as competing L2s,” he added. .
Salem said Ekubo will create a governance token within a month of adopting the proposal, with 20% of the supply going to Uniswap DAO’s treasury. Ekubo has control over the remaining tokens and any distribution. The token will come from Starknet. The proposal also requires Uniswap’s license to be updated, giving Ekubo a subsidy for unlimited use of Uniswap v4.
A bit of opposition
Behind the significant number of votes against the proposal were many criticisms of the proposal in the discussion forum.
Doo Wan Nam, co-founder of StableLab, noted“If this proposal is adopted, I believe Uniswap’s board will need to seriously consider the role of governance and accountability.”
Crypto market maker Wintermute said it too would not support the proposal due to the implied token valuation of $60 million.
Keyrock, another market-making company, disagreed with the proposal’s quick turnaround. “We simply cannot justify allocating any amount of UNI to be sold on the market to venture capital investment when there is no longer a framework or committee to investigate. [due diligence] then 2-3 weeks,” it said.
Disclaimer: Evgeny Gaevoy, the founder and CEO of Wintermute, sits on The Block’s board of directors and is a shareholder.