On
Friday,
the
Uniswap
Foundation
announced
it
was
delaying
a
key
vote
on
whether
to
upgrade
the
protocol’s
governance
structure
and
fee
mechanism
to
better
reward
holders
of
the
UNI
governance
token.
The
nonprofit
cited
concerns
from
a
“stakeholder,”
thought
to
have
been
an
equity
investor
in
the
organization
behind
the
largest
Ethereum-based
decentralized
exchange.
Note:
The
views
expressed
in
this
column
are
those
of
the
author
and
do
not
necessarily
reflect
those
of
CoinDesk,
Inc.
or
its
owners
and
affiliates.
This
is
an
excerpt
from
The
Node
newsletter,
a
daily
roundup
of
the
most
pivotal
crypto
news
on
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“Over
the
last
week,
a
stakeholder
raised
a
new
issue
relating
to
this
work
that
requires
additional
diligence
on
our
end
to
fully
vet.
Due
to
the
immutable
nature
and
sensitivity
of
our
proposed
upgrade,
we
have
made
the
difficult
decision
to
postpone
posting
this
vote,”
the
foundation
wrote
on
X
(formerly
Twitter).
Although
the
foundation
said
the
decision
was
“unexpected”
and
apologized
for
the
situation,
this
is
far
from
the
first
delay
to
a
vote
on
whether
to
engage
the
“fee
switch”
that
would
direct
a
modest
amount
of
protocol
trading
fees
to
token
holders.
It
is
also
far
from
the
only
time
that
the
interests
of
token
holders
have
seemingly
been
at
odds
with
those
of
other
“stakeholders”
in
Uniswap.
“We
will
keep
the
community
apprised
of
any
material
changes
and
will
update
you
all
once
we
feel
more
certain
about
future
timeframes,”
the
foundation
added.
Uniswap
issued
the
UNI
token
in
the
aftermath
of
“DeFi
Summer”
in
2020
to
stave
off
what
was
known
as
a
“vampire
attack”
by
Sushiswap,
which
launched
with
the
governance
token
SUSHI
and
quickly
began
to
attract
liquidity.
Sushiswap
was
seen
as
relatively
more
community-aligned
given
that
it
was
managed
by
a
DAO
and
directed
trading
fees
to
token
holders.
Version
2
of
Uniswap
contained
code
that
would
enable
the
0.3%
of
trading
fees
paid
to
liquidity
providers
(or
those
who
contribute
tokens
to
be
traded
on
the
decentralized
exchange)
to
be
split,
with
0.25%
going
to
LPs
and
the
remaining
.05%
to
UNI
token
holders.
But
the
“fee
switch”
was
never
activated.
Talks
again
arose
about
fee
switch
activation
with
the
launch
of
Uniswap
V3.
GFX
Labs,
maker
of
the
Oku,
a
front
end
interface
for
Uniswap,
proposed
a
plan
that
would
test
out
the
protocol
fee
distribution
on
a
few
pools
on
Uniswap
V2
that
received
a
lot
of
attention.
But
talks
ultimately
fizzled
out,
due
in
part
to
concerns
that
activation
might
drive
LPs
and
liquidity
away
from
the
platform,
as
well
as
legal
fears.
One
of
the
main
worries
at
the
time
was
that
the
fee
switch
could
have
tax
and
securities
law
implications
for
UniDAO
given
that
it
would
essentially
be
paying
a
type
of
revenue-based
dividend
to
token
holders.
It’s
unclear
exactly
what
concerns
Uniswap
Foundation
was
responding
to
when
deciding
to
once
again
delay
the
vote.
Gabriel
Shapiro,
a
prominent
legal
expert
in
crypto,
wrote
that
this
is
another
example
of
a
DeFi
protocol
treating
token
holders
as
“second
class”
citizens
whose
desires
are
subordinated
to
a
smaller
group
of
stakeholders.
Similar
arguments
were
made
late
last
year
when
Uniswap
Labs
imposed
a
0.15%
trading
fee
on
its
frontend
website
and
wallet
–
the
first
time
the
development
group
sought
to
directly
monetize
its
work.
The
fee
only
applied
to
products
maintained
by
Uniswap
Labs,
not
the
exchange
protocol
itself,
but
did
come
after
a
$165
million
raise.
There
is
no
reason
to
be
completely
cynical
here,
and
suggest
that
the
hardcoded
fee
switch
to
reward
UNI
token
holders
will
never
be
implemented.
Uniswap
Labs
and
UNI
token
holders
are
distinct
entities
with
their
own
interests;
ideally
both
would
be
aligned
to
do
what’s
best
for
the
protocol
itself
But
if
there
is
a
lesson
to
be
learned
across
DeFi,
it’s
that
token
holders
do
not
always
get
the
final
say.
