A group of anonymous Uniswap users is trying to unite the many small holders of the UNI governance token to solve potential problems in the governance of the automated market maker (AMM). Still, this is what UNI launch last week should have done.
The new UNII token
The great initiative promoted by this "union" is UNI Innamorare (or UNII), a token that will be used by the Uniswap community. However, while the Uniswap fork of SushiSwap and SashimiSwap has essentially stolen liquidity from Uniswap, this newly launched token promises to help the Uniswap market grow and potentially consolidate the prices of UNI, which is held by over 80.000 addresses at the time of print.
It is not clear who is behind the initiative. The website states that UNII is "backed by unii.finance". The group asks UNI holders to apply for UNII tokens in order to form a party within the UNI community capable of countering the power of the founding team and Investors, according to a September 20 post by Medium.
The protocol according to which the new tokens will be distributed is reported in detail on the project website. UNI is trading at $ 4,37 at press time, down 48,4% from its all-time high of $ 8,40 on September 18, according to CoinGecko.
When the hottest DeFi project of the moment has a decentralization problem
The launch of Uniswap's UNI governance token on September 16 was designed in part to address a long-standing project problem: it is not 100% community owned.
After the decentralized exchange distributed a portion of its new governance token to everyone who was already part of the exchange (before September 1), it has received instant praise from both its users and the crypto community.
However, when someone took a closer look at how UNI was deployed, the question arose as to how much control the community will actually have. Of the total offering of 1 billion UNI tokens, around 40% of them will be awarded to team members, investors and consultants, according to a post on the Uniswap website.
So the community remains 60%. While this percentage split might not sound too bad, the creators of UNII see a big problem in the fact that, under the rules, Uniswap requires a minimum 1% stake (10.000.000 tokens) to submit a governance proposal and the 4% (40.000.000 tokens) of “yes” to reach the quorum and approve the proposal.
This is a very high threshold for independent retail users. This is why a union within the Uniswap community is so much needed. Uniswap isn't the only decentralized finance (DeFi) project that uses these governance parameters.
The DeFi Compound lending protocol also requires 1% of its COMP governance tokens to submit a governance proposal. “United we win divided we lose”, reports the website of the UNII initiative.
