After Binance became the second-largest entity by voting power in the Uniswap DAO, the CEO of the popular DEX, Hayden Adams, took it to Twitter to describe the situation as “unique” while adding that “UNI technically belongs to its users.”
He accused Binance of using user funds to pile up governance votes.
Hayden Adams on Binance
Adams claimed that it was unclear how the crypto exchange intended to engage with the decisions of the DEX and argued that Binance users would “prefer to keep these gov rights,” citing Compound’s action with cUNI.
Binance distributed 13.2 million UNI tokens from its own books. It currently retains 5.9% of the platform’s voting power trailing behind venture capital giant a16z, which controls 6.7%. The allocated amount is nearly 1.3% of the total UNI supply. This will allow Binance to present governance proposals as it exceeds the necessary 0.25% threshold. Despite this, it fell short of the 4% quorum required to pass votes.
The move was seen as one of the largest centralized crypto exchange wrestling to gain control over the world’s most prominent decentralized crypto exchange by positioning itself as the second-most powerful voting member in the latter’s DAO.
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Binance Says Uniswap “Misunderstood”
Following the development, Binance revealed the transfer of 4.6 million UNI between internal Binance wallets, which caused the UNI to be instantly and automatically delegated. The exchange asserted that it was not its intention and said that the team was in talks with Uniswap “to clarify the best path forward and prevent this misunderstanding from happening again.”
Binance CEO Changpeng Zhao “CZ” later clarified that the exchange does not vote with user tokens and that the popular DEX had misunderstood the situation.
“UNI transferred between internal Binance wallets, causing the UNI to be automatically delegated. This is part of their protocol, not “we intended”. Binance don’t vote with user’s tokens. Uniswap misunderstood the situation. Tokens come to popular platforms.”
The team behind the DEX, Uniswap Labs, recently secured $165 million in a Series B funding round led by Polychain Capital and Andreessen Horowitz (a16z). The platform revealed plans to deploy the freshly raised capital for NFT investments and developer tools.
Earlier this year, Uniswap surpassed a lifetime cumulative trading volume of $1 trillion.
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