A16z Exerts Control Over Uniswap by Downvoting BNB Chain Deployment
Crypto venture firm a16z has used its 15 million UNI token voting block to vote against a proposal that would use the Wormhole bridge for Uniswap V3 deployment on BNB Chain.
According to the ongoing results of the proposal vote, a16z’s overwhelming token stash enabled it to control around half of the votes so far, pushing the decision its way.
The proposal to deploy the latest Uniswap iteration on the BNB Chain was submitted on Feb. 2. It was made by 0xPlasma Labs on behalf of the Uniswap Community, following a temperature check with 80% in favor of the proposal.
The voting period will conclude on Feb. 10, and only 3% or 30.5 million votes had been cast at the time of writing. For a vote to pass, it must achieve a quorum of 4% or 40 million UNI tokens. A16z has made every effort to make sure this doesn’t happen.
Uniswap Controlled by VCs
The move has the crypto community riled and calling for answers from a protocol that claims to be decentralized.
You’re being lied to about the governance of UNI@a16z could control 41.5M UNI through 11 wallets, which represents more than 4% of the supply
4% is the required amount to pass any proposal 🧵↓ https://t.co/mVdTukYstD pic.twitter.com/u7l9kBFIWF
— Bubblemaps (@bubblemaps) February 5, 2023
The decision to downvote appears to have been driven by the choice of cross-chain bridge in the proposal. 0xPlasma Labs have preferred Wormhole, whereas a16z is in favor of LayerZero.
“As a result of a very complex discussion and voting on the Snapshot, the community chose the Wormhole bridge for the Uniswap v3 deployment on BNB Chain (with 28M votes),” 0xPlasma Labs noted.
Furthermore, a16z led a $135 million investment round in the LayerZero blockchain interoperability protocol in March 2022.
Decentralization advocate Chris Blec commented, “anti-competition cartels in DeFi are REAL.” Following the vote, Binance boss Changpeng Zhao said:
“On chain voting just means the large whale(s) control the blockchain then. Just like shareholders.”
🚨 @a16z just used its full voting weight to squash a $UNI proposal to launch Uniswap protocol on BNB chain using @wormholecrypto bridge.
a16z is a large investor in Wormhole competitor, @LayerZero_Labs.
Open your eyes. 👀
Anti-competition cartels in DeFi are REAL. https://t.co/QwElvg5DOj pic.twitter.com/4b14LqWLRH
— Chris Blec (@ChrisBlec) February 5, 2023
UNI Price Outlook
Uniswap’s governance token lost 3.9% on the day. At the time of writing, UNI was trading at $6.91 following an intraday high of $7.30.
The token has failed to gain much momentum during the January rally gaining just 25% over the past month.
UNI prices dumped below $5 following the FTX crash in November and have remained relatively flat since mid-August. Furthermore, UNI is still down 84.6% from its May 2021 all-time high of just under $45.
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I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.