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Uniswap aims to establish a physical foundation with a budget of $70 million over three years, but the community's opinions are polarized.

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Uniswap aims to establish a physical foundation with a budget of $70 million over three years, but the community

A former core member of Uniswap Labs has proposed the establishment of a physical Uniswap Foundation to assist in achieving higher levels of adoption. The proposal includes a three-year operating budget of up to $74 million, covering donation programs. Some members of the community have expressed support for the proposal, believing that the threat to Uniswap lies not in the tens of millions of dollars, but in the failure to expand its ecosystem. However, opponents have been comparing the execution of Uniswap's past donation programs one by one, pointing out potential flaws in some of them.

Uniswap Foundation Proposal

According to the proposal, the establishment of the Uniswap Foundation (UF) aims to promote and achieve greater adoption. If approved, UF will establish a physical entity in Delaware with the following objectives:

Responsibilities: UF will be the first protocol foundation elected by governance votes, focusing on protocol growth, governance revitalization, and serving as a protocol advocate.

Team: Devin Walsh, former chief of staff, will serve as the executive director, and Ken Ng, a Uniswap early contributor, will serve as the operations lead, with a total of 12 team members.

Budget allocated for the above objectives:

  • $14 million: Three-year team operations budget.
  • $60 million: Three-year Uniswap Grants Program (UGP) budget.
  • 2.5 million UNI tokens: Solely for voting governance and can be revoked by governance at any time.

Founder's Perspectives

Hayden Adams expressed excitement about the proposal on Twitter, highlighting Ken Ng's significant contributions during the early launch of Uniswap v1 and their previous collaboration as donation leads at the Ethereum Foundation, culminating in the establishment of the Uniswap Grants Program. Devin Walsh, after resigning as Uniswap chief of staff, joined Ken Ng in founding UF. Hayden stated:

If the proposal is approved, UF will become another team dedicated to ensuring that Uniswap not only maintains its current state but thrives.

Proponents' Viewpoints

Reflecting on feedback from the governance forum, member Toby Shorin echoed some sentiments from proponents, emphasizing the challenging governance issues UniSwap faces, mainly the lack of a clear authority to lead. Issues include:

  • The need for high-level election campaigns to pass proposals.
  • Voter apathy and fatigue among voting representatives.
  • Difficulty in improving governance processes.
  • Lack of accountability.

With the establishment of the foundation, UF will be able to represent various stakeholders in the protocol, closely engage with representatives, and carry out tasks. This is something Uniswap has never had before and signals a positive development in enhancing Uniswap's operational capabilities and efficiency.

Opponents' Viewpoints

Adam Cochran, partner at Cinneamhain Ventures, shared his views, with some community members providing similar feedback in the proposal. Adam is not against establishing UF and views it as a positive proposal but believes that spending tens of millions on the Uniswap Grants Program (UGP) at this stage is misguided.

Adam reviewed past UGP donations totaling $7 million, noting that the outcomes were not ideal. He criticized the allocation of funds for projects that either did not enhance performance or had limited utility, such as:

  • $50,000: Document aesthetics improvement.
  • $50,000: Croco Finance funding overview interface.
  • $130,000: Event sponsorships.
  • $51,000: Fish Vote unused voting tool.
  • $25,000: Explore UGP itself?
  • $25,000: Funding for an opaque research group?
  • $40,000: Explore UNI's OS font Adam: What is this?
  • $150,000: Donation to a for-profit incubator organization.
  • $60,000: Donation to Messari research.
  • $30,000: Another UGP brand promotion.
  • $100,000: Donation to Valve Finance for router optimization, a project that has disappeared.

Adam believes that while some items on the list are important, millions have been wasted. He questions the rationale behind such large funding allocations, stating that while the spirit and aspirations of UGP and UF are correct and necessary, based on performance to date, UGP does not warrant a $60 million budget.

He emphasizes that UF should have:

  • Accountability.
  • Clearer KPIs and objectives.
  • An outline of donation projects and reasons.
  • Concrete data to assist Uniswap's growth.

Otherwise, UF would merely be throwing money around at the expense of the Uniswap community.

In response, Hayden and Ken Ng specifically addressed Adam on Twitter, with the former referencing the Ethereum Foundation's donation history, emphasizing past donations to dozens of failed projects, including highly successful cases like Uniswap itself. The latter stated that UGP also has successful cases and will gradually expand to influential teams over time.

If the preliminary poll passes, the proposal will undergo a final vote on 8/8 on the Snapshot governance voting platform.