Uniswap indicates collecting user data to cooperate with regulatory efforts to prevent illicit activities.

On November 17, Uniswap, the largest decentralized exchange protocol on Ethereum, announced its latest privacy policy, stating that it will collect on-chain and off-chain data related to user wallets. Uniswap believes that unlike the internet that has eroded user privacy over the past decades, Web3 companies can be transparent about what data they collect.

What Data Does Uniswap Collect?

Public On-Chain Data

When a user's non-custodial wallet connects to Uniswap's service, it collects and records the user's public blockchain address to understand your usage within the service, take snapshots, and prevent any illegal activities.

Local Device Data and Other Tracking Technologies

Uniswap and its third-party service providers obtain and collect various data related to the use of devices, including local storage, mobile device IDs, cookies, network beacons, and other similar tracking data to provide customized services at different times.

Third-Party Data for Compliance Requirements

Uniswap states that, in order to avoid any connection to fraudulent or illegal activities, it obtains information about user addresses and transaction activities through data providers.

This may involve address assessments provided by regulatory authorities or on-chain data institutions and information exchange.

Investigations or Usability Research

If a user participates in Uniswap's surveys or usability research, it will record your identity information such as name, email, job title, and responses and interactions on the service.

Communications

Information provided to Uniswap via email, customer service centers, social media, or participation in surveys will also be recorded.

Resumes

If you have applied for a job at Uniswap, it will also record the information you provide.

Purposes of Uniswap Data Collection

Uniswap states that it collects data to optimize services, enhance user experience, improve risk assessment capabilities to prevent illegal activities, and ensure compliance by providing information to government regulatory agencies and law enforcement.

Compliance May Be Uniswap's Main Goal

Uniswap indicates that unlike Web2 companies, Uniswap clearly explains how it collects and uses user data to maintain transparency. However, based on its usage statements, the main difference from Web2 companies may be whether or not user data is used for undisclosed commercial purposes.

Uniswap records and analyzes user behavioral data and collaborates with regulatory authorities, which may contradict the ethos of "anti-censorship" in the blockchain space.

However, following the sanctions imposed by the U.S. Office of Foreign Assets Control (OFAC) on the privacy protocol Tornado Cash, more and more blockchain applications and infrastructure providers are starting to comply with regulatory requirements, with Uniswap being one of the representatives. This demonstrates that illegal activities in DeFi are now receiving regulatory attention, and protocol developers are beginning to change their operational models towards compliance. More discussions on the Tornado Cash incident can be found here.