Background:
Beginning in June, the UAC internally recognized votable supply, which at the time stood at ~41M UNI (relative to the 40M UNI quorum), as a potentially imminent and systemic risk to the DAO. In response, and in efforts to protect the DAO, the UAC proactively began the first Governance Logistics Improvement research report and RFC. The report sought to identify the greatest issues Uniswap governance faces, with particular emphasis on votable supply as it pertains to quorum…
To address this mounting issue, the UAC invoked an open call for community-sourced solutions. This call resulted in five potential pathways, which were then aggregated and presented to the community. Of those five proposed solutions, two have emerged with majority support within the forum discussions: Treasury Delegations and Incentivized Delegation Vaults. (Governance Logistics Improvement)
This proposal addresses Incentivized Delegation Vaults.
UAC Next Steps:
UAC: With regards to IDVs, the UAC will serve under the DAO’s guidance as the program manager of the Incentivized Delegation Vault initiative, should it pass (detailed below).
Author: Event Horizon
Proposal Summary:
Incentivized Delegation Vaults: Multiple delegates recognized that it is not healthy for the governance ecosystem if the entirety of the votable supply is sustained by treasury delegations alone. As such, encouraging community delegations is essential. The most direct and intuitive approach is to incentivize participation. IDVs offer a low-touch, plug-and-play approach to facilitate this. Each eligible delegate will receive their own IDV. Delegators to each vault will receive emissions passively once delegated. The objective of IDVs is to, at a minimum, close the 9M UNI shortfall.
Proposal Configuration:
Unique Vaults for Every Delegate: Each eligible delegate will receive their own branded vault. Once created, these vaults will allow UNI token holders to earn reward emissions for delegating voting power to any branded delegate vault. No cost or obligations will be incurred by the delegates.
Eligibility: Treasury Delegation Candidates: Any delegate who qualifies for treasury delegations (regardless of whether they ultimately receive treasury delegations). Delegate Compensation Applicants: Any delegate who applied for the Delegate Reward Initiative cycle 4.
Application Process: There will be an additional vault application thread where eligible applicants will be able to express their interest.
User Experience: IDVs simply track delegation activity on-chain, specifically who delegated to whom and how much, and emit weekly airdropped rewards to participants in exchange for delegating to eligible delegates. There is no transfer of assets, depositing or contract interactions necessary for claims.
Flat Rate Emissions: A flat rate emission will be provided to depositors into any vault.
Ex. Assuming an APR of 2%, if there are 10 delegate vaults, with 1,000 UNI delegates across them in any distribution, each UNI delegated will earn 0.02 UNI per year, regardless of which vault it is held in.
Security: Tokens never leave the users’ wallets. Delegation through IDVs is fully non-custodial. Users maintain complete control over their assets and are rewarded solely for delegating, not for transferring or locking tokens. Delegation is executed via a signature-based function call on the Uniswap token contract.
Starting Program Configuration:
Target Delegations: 9,000,000 UNI Starting APR: 2%
APR Rationale: Assuming Treasury Delegations pass, the shortfall in delegated UNI is projected at ~9M UNI. At present, UNI has few, if any, single-sided, low-risk yield opportunities. A 2% APR is therefore considered sufficient to incentivize participation without excessive emissions. At 2%, the one-year value of a single delegated UNI is 0.02 UNI per annum. Note: Because delegations will not materialize immediately at full scale, actual emissions may grow gradually, extending the budget’s effective duration beyond one year.
KPI: Emissions operate on a flat-rate model: every UNI emitted definitionally secures the exact amount of delegation value the DAO seeks. This design and commitment to flat vs variable APR eliminates the risk of “overspend” or “underspend”: If more UNI is delegated, emissions scale up. If fewer UNI are delegated, fewer UNI are emitted. The sole KPI for program management is therefore to maintain an average APR at the DAO-approved target rate (e.g., 2%). This is achieved through straightforward accounting and strict adherence to the DAO mandate. In short, performance to emissions is guaranteed by design; the program succeeds whenever the agreed APR is consistently maintained.
Budget: 18,200 UNI
Initial Build: 5,000 UNI – A one-time allocation that covers the full build and instantiation of the product. This is released by the UAC at the point at which the product is functioning as noted by the launch of the first, or first batch, of delegate-branded IDVs.
Year 1 Development and 2 Years of Maintenance: 13,200 UNI provides for one year of ongoing development and maintenance. Event Horizon will guarantee active development during the first 12 months. This may include, as reasonable, the incorporation of on-chain delegate metrics and requirements, integrations with approved third-party products, adjustments to the emissions model, and other DAO-requested improvements deemed beneficial. Event Horizon further commits to up to an additional 12 months of general product operation and maintenance beyond the 1-year payment term. Note: The Event Horizon team aims to serve as a transparent, consistent, and reliable builder for the Uniswap community alongside other recognized names, such as Oku, for years to come. In that spirit, we approached valuation in an effort to both allow for operational viability and continued future work/value provision for the DAO and to be respectful and reasonable in what we ask of the DAO. Our reasoning landed as follows:
From the DAO’s perspective, there is clear value in expanding the votable supply. This is abundantly evident by the current >$200m quorum deficit. But it also strengthens Uniswap’s governance by reducing vulnerability and prevents future bottlenecks in decision-making.
From the individual delegate’s perspective, IDVs create tangible value by supporting their community involvement and in directly expanding their delegation through incentives.
To ground the valuation of governance participation, we looked at existing precedent: the delegate reward initiative. At current UNI prices, each compensated delegate receives ~600 UNI/month, while the average compensated delegate maintains ~1M UNI in delegations. In other words, consistent participation of ~1M UNI is currently valued by the DRI at ~600 UNI/month.
The IDV program is designed to mobilize up to 9M UNI. If even 10% of this target is reached (900K UNI), the mobilized voting power is equivalent to that of a compensated delegate presently valued at 600 UNI per month. At full capacity, IDVs nearly match the voting power of every compensated delegate combined, which currently represents a cumulative value of ~9,000 UNI per month.
Importantly, this added voting power also improves the cost efficiency of the reward initiative itself, since every compensated delegate will be eligible for their own vault and therefore become the direct recipients of the delegations driven by IDVs. The same delegates, being paid the same amount from DRI, are now mobilizing a much more impactful benefit to the DAO.
The entire program’s total cost nets to ~750 UNI/month, or approximately the cost of a single compensated delegate. This is factoring in not just mobilized voting power but also upfront build costs, benefits to individual delegates, and ongoing maintenance and evolution.
Treasury Earmarked for Possible Emissions: 180,000 UNI The UAC will custody 180,000 UNI for potential future emissions. This amount represents the maximum reserve required to support up to 9M UNI delegated for one year at a 2% APR.
Proportional Scale
Re-Scaled
Key points on Emissions:
Flat-Rate Emissions: Each UNI emitted has a consistent marginal value. For example, at a 2% APR, every 1 UNI emitted secures 50 UNI in delegation for at least one year.
Not a Committed Expense: The 180,000 UNI is an earmark, not a guaranteed outlay. Actual emissions will depend on delegation uptake, which is expected to ramp gradually rather than begin at full scale. The UAC only emits an amount of UNI directly proportional to the amount of value (in the form of delegations) that the delegates, and thereby the DAO, have gained through the vaults. As depicted above, it is a direct trade-off between delegations and UNI emissions at the exact value exchange rate determined and managed by the DAO.
Conservative Buffer: While it is unlikely the full 9M will be delegated immediately, holding the full earmark avoids the need for a risky “top-up” proposal under sub-quorum conditions.
Non-Dilutive: It is important to distinguish these emissions from other programs, such as LP incentives, in that the emissions are exclusively dedicated to UNI token holders. Any token holder who helps secure the DAO receives their share of emissions. As such, dilution is fully avoidable. And, contextualized at scale, even at its fullest emission rate, it represents ~0.034% in completely avoidable dilution annually.
DAO Flexibility: Any unused portion remains in UAC custody and ultimately under DAO control, to be reallocated or repurposed as the community decides.
(See Forum For Full Proposal…)
Background:
Beginning in June, the UAC internally recognized votable supply, which at the time stood at ~41M UNI (relative to the 40M UNI quorum), as a potentially imminent and systemic risk to the DAO. In response, and in efforts to protect the DAO, the UAC proactively began the first Governance Logistics Improvement research report and RFC. The report sought to identify the greatest issues Uniswap governance faces, with particular emphasis on votable supply as it pertains to quorum…
To address this mounting issue, the UAC invoked an open call for community-sourced solutions. This call resulted in five potential pathways, which were then aggregated and presented to the community. Of those five proposed solutions, two have emerged with majority support within the forum discussions: Treasury Delegations and Incentivized Delegation Vaults. (Governance Logistics Improvement)
This proposal addresses Incentivized Delegation Vaults.
UAC Next Steps:
UAC: With regards to IDVs, the UAC will serve under the DAO’s guidance as the program manager of the Incentivized Delegation Vault initiative, should it pass (detailed below).
Author: Event Horizon
Proposal Summary:
Incentivized Delegation Vaults: Multiple delegates recognized that it is not healthy for the governance ecosystem if the entirety of the votable supply is sustained by treasury delegations alone. As such, encouraging community delegations is essential. The most direct and intuitive approach is to incentivize participation. IDVs offer a low-touch, plug-and-play approach to facilitate this. Each eligible delegate will receive their own IDV. Delegators to each vault will receive emissions passively once delegated. The objective of IDVs is to, at a minimum, close the 9M UNI shortfall.
Proposal Configuration:
Unique Vaults for Every Delegate: Each eligible delegate will receive their own branded vault. Once created, these vaults will allow UNI token holders to earn reward emissions for delegating voting power to any branded delegate vault. No cost or obligations will be incurred by the delegates.
Eligibility: Treasury Delegation Candidates: Any delegate who qualifies for treasury delegations (regardless of whether they ultimately receive treasury delegations). Delegate Compensation Applicants: Any delegate who applied for the Delegate Reward Initiative cycle 4.
Application Process: There will be an additional vault application thread where eligible applicants will be able to express their interest.
User Experience: IDVs simply track delegation activity on-chain, specifically who delegated to whom and how much, and emit weekly airdropped rewards to participants in exchange for delegating to eligible delegates. There is no transfer of assets, depositing or contract interactions necessary for claims.
Flat Rate Emissions: A flat rate emission will be provided to depositors into any vault.
Ex. Assuming an APR of 2%, if there are 10 delegate vaults, with 1,000 UNI delegates across them in any distribution, each UNI delegated will earn 0.02 UNI per year, regardless of which vault it is held in.
Security: Tokens never leave the users’ wallets. Delegation through IDVs is fully non-custodial. Users maintain complete control over their assets and are rewarded solely for delegating, not for transferring or locking tokens. Delegation is executed via a signature-based function call on the Uniswap token contract.
Starting Program Configuration:
Target Delegations: 9,000,000 UNI Starting APR: 2%
APR Rationale: Assuming Treasury Delegations pass, the shortfall in delegated UNI is projected at ~9M UNI. At present, UNI has few, if any, single-sided, low-risk yield opportunities. A 2% APR is therefore considered sufficient to incentivize participation without excessive emissions. At 2%, the one-year value of a single delegated UNI is 0.02 UNI per annum. Note: Because delegations will not materialize immediately at full scale, actual emissions may grow gradually, extending the budget’s effective duration beyond one year.
KPI: Emissions operate on a flat-rate model: every UNI emitted definitionally secures the exact amount of delegation value the DAO seeks. This design and commitment to flat vs variable APR eliminates the risk of “overspend” or “underspend”: If more UNI is delegated, emissions scale up. If fewer UNI are delegated, fewer UNI are emitted. The sole KPI for program management is therefore to maintain an average APR at the DAO-approved target rate (e.g., 2%). This is achieved through straightforward accounting and strict adherence to the DAO mandate. In short, performance to emissions is guaranteed by design; the program succeeds whenever the agreed APR is consistently maintained.
Budget: 18,200 UNI
Initial Build: 5,000 UNI – A one-time allocation that covers the full build and instantiation of the product. This is released by the UAC at the point at which the product is functioning as noted by the launch of the first, or first batch, of delegate-branded IDVs.
Year 1 Development and 2 Years of Maintenance: 13,200 UNI provides for one year of ongoing development and maintenance. Event Horizon will guarantee active development during the first 12 months. This may include, as reasonable, the incorporation of on-chain delegate metrics and requirements, integrations with approved third-party products, adjustments to the emissions model, and other DAO-requested improvements deemed beneficial. Event Horizon further commits to up to an additional 12 months of general product operation and maintenance beyond the 1-year payment term. Note: The Event Horizon team aims to serve as a transparent, consistent, and reliable builder for the Uniswap community alongside other recognized names, such as Oku, for years to come. In that spirit, we approached valuation in an effort to both allow for operational viability and continued future work/value provision for the DAO and to be respectful and reasonable in what we ask of the DAO. Our reasoning landed as follows:
From the DAO’s perspective, there is clear value in expanding the votable supply. This is abundantly evident by the current >$200m quorum deficit. But it also strengthens Uniswap’s governance by reducing vulnerability and prevents future bottlenecks in decision-making.
From the individual delegate’s perspective, IDVs create tangible value by supporting their community involvement and in directly expanding their delegation through incentives.
To ground the valuation of governance participation, we looked at existing precedent: the delegate reward initiative. At current UNI prices, each compensated delegate receives ~600 UNI/month, while the average compensated delegate maintains ~1M UNI in delegations. In other words, consistent participation of ~1M UNI is currently valued by the DRI at ~600 UNI/month.
The IDV program is designed to mobilize up to 9M UNI. If even 10% of this target is reached (900K UNI), the mobilized voting power is equivalent to that of a compensated delegate presently valued at 600 UNI per month. At full capacity, IDVs nearly match the voting power of every compensated delegate combined, which currently represents a cumulative value of ~9,000 UNI per month.
Importantly, this added voting power also improves the cost efficiency of the reward initiative itself, since every compensated delegate will be eligible for their own vault and therefore become the direct recipients of the delegations driven by IDVs. The same delegates, being paid the same amount from DRI, are now mobilizing a much more impactful benefit to the DAO.
The entire program’s total cost nets to ~750 UNI/month, or approximately the cost of a single compensated delegate. This is factoring in not just mobilized voting power but also upfront build costs, benefits to individual delegates, and ongoing maintenance and evolution.
Treasury Earmarked for Possible Emissions: 180,000 UNI The UAC will custody 180,000 UNI for potential future emissions. This amount represents the maximum reserve required to support up to 9M UNI delegated for one year at a 2% APR.
Proportional Scale
Re-Scaled
Key points on Emissions:
Flat-Rate Emissions: Each UNI emitted has a consistent marginal value. For example, at a 2% APR, every 1 UNI emitted secures 50 UNI in delegation for at least one year.
Not a Committed Expense: The 180,000 UNI is an earmark, not a guaranteed outlay. Actual emissions will depend on delegation uptake, which is expected to ramp gradually rather than begin at full scale. The UAC only emits an amount of UNI directly proportional to the amount of value (in the form of delegations) that the delegates, and thereby the DAO, have gained through the vaults. As depicted above, it is a direct trade-off between delegations and UNI emissions at the exact value exchange rate determined and managed by the DAO.
Conservative Buffer: While it is unlikely the full 9M will be delegated immediately, holding the full earmark avoids the need for a risky “top-up” proposal under sub-quorum conditions.
Non-Dilutive: It is important to distinguish these emissions from other programs, such as LP incentives, in that the emissions are exclusively dedicated to UNI token holders. Any token holder who helps secure the DAO receives their share of emissions. As such, dilution is fully avoidable. And, contextualized at scale, even at its fullest emission rate, it represents ~0.034% in completely avoidable dilution annually.
DAO Flexibility: Any unused portion remains in UAC custody and ultimately under DAO control, to be reallocated or repurposed as the community decides.
(See Forum For Full Proposal…)
https://gov.uniswap.org/t/gfx-labs-delegate-communication-thread/24194/24
https://gov.uniswap.org/t/gfx-labs-delegate-communication-thread/24194/24
https://gov.uniswap.org/t/gfx-labs-delegate-communication-thread/24194/24
https://gov.uniswap.org/t/gfx-labs-delegate-communication-thread/24194/24
https://gov.uniswap.org/t/rfc-governance-logistics-improvements/25737/28?u=bendi
Always good to get more UNI delegated to active delegates.
https://gov.uniswap.org/t/rfc-governance-logistics-improvements/25737/28?u=bendi
Always good to get more UNI delegated to active delegates.
Incentivized Delegation Vaults: Multiple delegates recognized that it is not healthy for the governance ecosystem if the entirety of the votable supply is sustained by treasury delegations alone. As such, encouraging community delegations is essential. The most direct and intuitive approach is to incentivize participation. IDVs offer a low-touch, plug-and-play approach to facilitate this. Each eligible delegate will receive their own IDV. Delegators to each vault will receive emissions passively once delegated. The objective of IDVs is to, at a minimum, close the 9M UNI shortfall.
Vault Structure:
Unique Vaults for Every Delegate: Each eligible delegate will receive their own branded vault. Eligibility extends to:
Treasury Delegation Candidates: Any delegate who qualifies for treasury delegations (regardless of whether they ultimately receive treasury delegations).
Delegate Compensation Applicants: Any delegate who applied for the Delegate Reward Initiative cycle 4.
Once created, these vaults will allow UNI token holders to earn reward emissions for delegating voting power to any branded delegate vault. No cost or obligations will be incurred by the delegates.
Application Content: Applicants will need to provide
User Experience: IDVs simply track delegation activity on-chain, specifically who delegated to whom and how much, and emit weekly airdropped rewards to participants in exchange for delegating to eligible delegates. There is no transfer of assets, depositing or contract interactions necessary for claims.
Flat Rate Emissions: A flat rate emission will be provided to depositors into any vault.
Security: Tokens never leave the users’ wallets. Delegation through IDVs is fully non-custodial. Users maintain complete control over their assets and are rewarded solely for delegating, not for transferring or locking tokens. Delegation is executed via a signature-based function call on the Uniswap token contract.
Application Process: There will be an additional vault application thread where eligible applicants will be able to express their interest.
Configuration:
Target Delegations: 9,000,000 UNI
Starting APR: 2%
APR Rationale: Assuming Treasury Delegations pass, the shortfall in delegated UNI is projected at ~9M UNI. At present, UNI has few, if any, single-sided, low-risk yield opportunities. A 2% APR is therefore considered sufficient to incentivize participation without excessive emissions.
KPI: Emissions operate on a flat-rate model: every UNI emitted definitionally secures the exact amount of delegation value the DAO seeks. This design and commitment to flat vs variable APR eliminates the risk of “overspend” or “underspend”: If more UNI is delegated, emissions scale up. If less UNI is delegated, less UNI is emitted. The sole KPI for program management is therefore to maintain an average APR at the DAO-approved target rate (e.g., 2%). This is achieved through straightforward accounting and strict adherence to the DAO mandate. In short, performance to emissions is guaranteed by design; the program succeeds whenever the agreed APR is consistently maintained.
Budget: 18,200 UNI
Initial Build: 5,000 UNI – A one-time allocation that covers the full build and instantiation of the product. This is released by the UAC at the point at which the product is functioning as noted by the launch of the first, or first batch, of delegate-branded IDVs.
Year 1 Development and 2 Years of Maintenance: 13,200 UNI provides for one year of ongoing development and maintenance. Event Horizon will guarantee active development during the first 12 months. This may include as reasonable, the incorporation of on-chain delegate metrics and requirements, integrations with approved third-party products, adjustments to the emissions model, other DAO-requested improvements deemed beneficial. Event Horizon further commits to up to an additional 12 months of general product operation and maintenance beyond the 1 year payment term.
Note: The Event Horizon team aims to serve as a transparent, consistent, and reliable builder for the Uniswap community alongside other recognized names such as Oku for years to come. In that spirit, we approached valuation in an effort to both allow for operational viability and continued future work/value provision for the DAO and to be respectful and reasonable in what we ask of the DAO. Our reasoning landed as follows:
From the DAO’s perspective, there is clear value in expanding the votable supply. This is abundantly evident by the current >$200m quorum deficit. But it also strengthens Uniswap’s governance by reducing vulnerability and prevents future bottlenecks in decision-making.
From the individual delegate’s perspective, IDVs create tangible value by supporting their community involvement and in directly expanding their delegation through incentives.
To ground the valuation of governance participation, we looked at existing precedent: the delegate reward initiative. At current UNI prices, each compensated delegate receives ~600 UNI/month, while the average compensated delegate maintains ~1M UNI in delegations. In other words, consistent participation of ~1M UNI is currently valued by the DRI at ~600 UNI/month.
The IDV program is designed to mobilize up to 9M UNI. If even 10% of this target is reached (900K UNI), the mobilized voting power is equivalent to that of a compensated delegate presently valued at 600 UNI per month. At full capacity, IDVs nearly match the voting power of every compensated delegate combine, which currently represents a cumulative value of ~9,000 UNI per month.
Importantly, this added voting power also improves the cost efficiency of the reward initiative itself, since every compensated delegate will be eligible for their own vault and therefore become the direct recipients of the delegations driven by IDVs. The same delegates, being paid the same amount from DRI, now mobilizing a much more impactful benefit to the DAO.
The entire program’s total cost nets to ~750 UNI/month, or approximately the cost of a single compensated delegate. This is factoring in not just mobilized voting power but also upfront build costs, benefits to individual delegates, and ongoing maintenance and evolution.
Treasury Earmarked for Possible Emissions: 180,000 UNI
Proportional Scale
Re-Scaled
Key points on Emissions:
Flat-Rate Emissions: Each UNI emitted has a consistent marginal value. For example, at a 2% APR, every 1 UNI emitted secures 50 UNI in delegation for at least one year.
Not a Committed Expense: The 180,000 UNI is an earmark, not a guaranteed outlay. Actual emissions will depend on delegation uptake, which is expected to ramp gradually rather than begin at full scale. The UAC only emits an amount of UNI directly proportional to the amount of value (in the form of delegations) that the delegates, and thereby the DAO, have gained through the vaults. As depicted above, it is a direct trade-off between delegations and UNI emissions at the exact value exchange rate determined and managed by the DAO.
Conservative Buffer: While it is unlikely the full 9M will be delegated immediately, holding the full earmark avoids the need for a risky “top-up” proposal under sub-quorum conditions.
Non-Dilutive: It is important to distinguish these emissions from other programs, such as LP incentives, in that the emissions are exclusively dedicated to UNI token holders. Any token holder who helps secure the DAO receives their share of emissions. As such, dilution is fully avoidable. And, contextualized at scale, even at its fullest emission rate, it represents ~0.034% in completely avoidable dilution annually.
DAO Flexibility: Any unused portion remains in UAC custody and ultimately under DAO control, to be reallocated or repurposed as the community decides. After the initial 12 months, the UAC will begin a discussion and eventual vote to determine how any remaining emissions amount should be utilized, be it continued incentive rounds, return to treasury, or otherwise.
Eligible Delegates:
Path 1 Treasury Delegation Application: All delegates eligible for the Treasury Delegation program will automatically be eligible to have a vault created and funded for them, regardless of whether or how much delegation they received during the treasury delegation round.
Path 2 – Delegate Compensation Applicants: Anyone who applied for delegate compensation will be considered eligible.
UI: To begin, Event Horizon will host the initial IDV UI. That said, after initial instantiation, any DAO-approved vendor will be eligible to host a white labeled instance of the vaults.
APR Management:
Baseline Rate: The program will target an average APR of 2%.
Governance Oversight: The UAC may propose to amend the APR cap at its discretion. Any recommendation to increase the APR cap must be taken to a Snapshot vote.
APR Ceiling: No rate shall exceed 10% APR at any time without Snapshot approval.
Reporting: The UAC will provide monthly reporting on the rate of emissions, delegation amounts, and other relevant information during the community calls.
APR Adjustments: The UAC may adjust the APR within the program to optimize participation (e.g., a front-loaded APR schedule to encourage early delegations). All adjustments will be posted publicly under the program’s forum thread and will require a customary Snapshot vote. No adjustment shall exceed 10% APR for any duration without Snapshot approval.
Custody of Funds: The UAC will custody funds and disperse them for emissions as needed.
Thank you for this great document. Since I’ve been watching the ecosystem from above at DeepDAO, and this fascinating discussion is diving into the details of governance, I found myself needing to take a step back and ask if there’s a strategy document for the DAO. I’d like to understand questions like these:
Thank you for this great document. Since I’ve been watching the ecosystem from above at DeepDAO, and this fascinating discussion is diving into the details of governance, I found myself needing to take a step back and ask if there’s a strategy document for the DAO. I’d like to understand questions like these:
I realize these are basic questions, and the answers are likely known for everyone here. All of these questions can also be answered by diving into the forum, and the proposals themselves over time. But I wonder if there’s a short document, something like a Uniswap Governance exec. summary.
The issues presented by the UAC are of extreme importance, and we appreciate the effort of all members involved in bringing this to light and discussing the issue. After reading the original post and comments, we’d like to bring some more context to the discussion, as well as offer our take regarding possible solutions.
The issues presented by the UAC are of extreme importance, and we appreciate the effort of all members involved in bringing this to light and discussing the issue. After reading the original post and comments, we’d like to bring some more context to the discussion, as well as offer our take regarding possible solutions.
We've been to some calls, but it's our first time in this forum, so for those who don't know: Blockful is a governance security company, we've received a grant from the UF last year to research and build a dashboard to keep track of governance security. We believe that some of the information we are keeping track - publicly available at anticapture.com/uni - can help better evaluate the next steps. Our team counts with stewards, contributors, and delegates in other DAOs.
As we see, in the original post and other comments so far, there are only 3 presented approaches that at this time would help prevent the decreasing quorum from offering real risks of creating governance paralysis, so we will focus on those.
Regarding all approaches that get more tokens from the treasury and delegate them to already active delegates selected by the governance itself.
tl;dr we are against it because benefits collusion to capture, increase and/or perpetuate power and payments in the DAO
Regarding the reduction of the necessary amount of votes cast in favor of a proposal for its results to be valid.
tl;dr we find it not ideal, but not as terrible as it initially sounds
It helps solve the problem by making the quorum more compatible with current voting power; it also increases the proportional voice of smaller delegates in comparison to what’s needed to execute something.
It's important to understand that quorum is a defense against silent proposals and attacks in which the attacker is able to nullify the defenses of the DAO. a. An attack that could compromise the governance interface can be an issue with low quorums for example b. An attack during holidays is the most classical example of a problem in low quorums.
Although partially contrarian to the approach, we don’t see a big risk increase in Uniswap DAO reducing its quorum from 40M to 24M UNI because Uniswap has the contract implementation defenses and the community necessary to defend from its issues. a. the limit of active proposals from an address and the permissionless proposal cancellation in cases wehere the proposer no longer holds VP above the threshold are examples of those defenses b. Still, it’d be preferable not to reduce quorum if not needed. More defense = better
Regarding @kpk comment about quorum vs treasury size, the quorum already sits way below the treasury value, and so does the delegated supply. We believe Uniswap has not been attacked/arbitraged out of its treasury so far because of its treasury composition(99% UNI), not because of the cost of the VP majority or quorum.
From proposal to execution, there are ~9 days of delays, and we can assume that FUD would quickly melt those billions of UNI in the event of an attack. a. There’s no certainty on this, and its better safe than sorry, but we don’t see it as worth holding this as the main worry for this change, considering that the quorum value has already fluctuated between $195M and $790M in the last year. b. The DeFi calculations of how far the token price could melt in such short notice have too many variables and we'd welcome a well based challenge or support to this thesis.
The real questions to consider regarding quorum are: a. Is there anyone that would profit by “risking/burning capital at the quorum’s dollar value” to break Uniswap token or take control of its governance permissions over the protocol? b. Can delegates coordinate to defend against an attack of 24M UNI at all times?
If we can defend against 40M VP, then we can defend against 24M VP. So either we are already at risk, or the risk doesn't change much. a. If we can’t defend either, then estimating if someone who won’t be willing to lose 40M UNI worth to attack would be willing to lose 24M to do so would be the best questioning. And we find it almost impossibly complex to estimate such things.
The quorum also presents a previously undiscussed problem of making the current treasury delegations very close to enough for dominance. Assuming the active voting power really follows a patern of decrease but only until its barely above quorum, this could mean a very hard to revert dominance by delegate teams over the next couple of years.
Regarding initiatives of token emissions as incentives for holders to have their tokens delegated
tl;dr it's be the best option presented so far, but will need refinement
@Curia and @1a35e1 made very good additions to this discussion. It'd be very interesting to explore alternatives together as we see the approaches presented being dissimilar in some senses, as lighthouse doesn't explicitly put it as financial incentives and Curia brings reputation to the table, which we are deeply favorable towards if well executed.
For that reason:
a. We believe there should be an incentive for active delegations, independent of alignment or quality of the delegate.
b. It’s not the ideal governance’s role to enforce a distinction between "good" and "bad" delegates for holders to choose from to get yield from vetted vaults. It severely hurts holder's choice and power.
c. If you want people to participate, holders should have power over governance, not be limited by it in their choice of who to delegate to i they want yields.The other options presented are (very) interesting mechanisms to experiment with and can bring positive results. Still, given the state of quorum and activity, we don’t believe they would be beneficial at this point or are prioritary.
Particularly for Optimistic Governance, given that we are struggling to maintain quorums above the necessary level as they continue to decline, we don’t want to create an option for any proposal to pass instead of fail in case the quorum is not met, even with a smaller quorum for vetoing.
In summary:
Incentivized Delegation Vaults: Multiple delegates recognized that it is not healthy for the governance ecosystem if the entirety of the votable supply is sustained by treasury delegations alone. As such, encouraging community delegations is essential. The most direct and intuitive approach is to incentivize participation. IDVs offer a low-touch, plug-and-play approach to facilitate this. Each eligible delegate will receive their own IDV. Delegators to each vault will receive emissions passively once delegated. The objective of IDVs is to, at a minimum, close the 9M UNI shortfall.
Vault Structure:
Unique Vaults for Every Delegate: Each eligible delegate will receive their own branded vault. Eligibility extends to:
Treasury Delegation Candidates: Any delegate who qualifies for treasury delegations (regardless of whether they ultimately receive treasury delegations).
Delegate Compensation Applicants: Any delegate who applied for the Delegate Reward Initiative cycle 4.
Once created, these vaults will allow UNI token holders to earn reward emissions for delegating voting power to any branded delegate vault. No cost or obligations will be incurred by the delegates.
Application Content: Applicants will need to provide
User Experience: IDVs simply track delegation activity on-chain, specifically who delegated to whom and how much, and emit weekly airdropped rewards to participants in exchange for delegating to eligible delegates. There is no transfer of assets, depositing or contract interactions necessary for claims.
Flat Rate Emissions: A flat rate emission will be provided to depositors into any vault.
Security: Tokens never leave the users’ wallets. Delegation through IDVs is fully non-custodial. Users maintain complete control over their assets and are rewarded solely for delegating, not for transferring or locking tokens. Delegation is executed via a signature-based function call on the Uniswap token contract.
Application Process: There will be an additional vault application thread where eligible applicants will be able to express their interest.
Configuration:
Target Delegations: 9,000,000 UNI
Starting APR: 2%
APR Rationale: Assuming Treasury Delegations pass, the shortfall in delegated UNI is projected at ~9M UNI. At present, UNI has few, if any, single-sided, low-risk yield opportunities. A 2% APR is therefore considered sufficient to incentivize participation without excessive emissions.
KPI: Emissions operate on a flat-rate model: every UNI emitted definitionally secures the exact amount of delegation value the DAO seeks. This design and commitment to flat vs variable APR eliminates the risk of “overspend” or “underspend”: If more UNI is delegated, emissions scale up. If less UNI is delegated, less UNI is emitted. The sole KPI for program management is therefore to maintain an average APR at the DAO-approved target rate (e.g., 2%). This is achieved through straightforward accounting and strict adherence to the DAO mandate. In short, performance to emissions is guaranteed by design; the program succeeds whenever the agreed APR is consistently maintained.
Budget: 18,200 UNI
Initial Build: 5,000 UNI – A one-time allocation that covers the full build and instantiation of the product. This is released by the UAC at the point at which the product is functioning as noted by the launch of the first, or first batch, of delegate-branded IDVs.
Year 1 Development and 2 Years of Maintenance: 13,200 UNI provides for one year of ongoing development and maintenance. Event Horizon will guarantee active development during the first 12 months. This may include as reasonable, the incorporation of on-chain delegate metrics and requirements, integrations with approved third-party products, adjustments to the emissions model, other DAO-requested improvements deemed beneficial. Event Horizon further commits to up to an additional 12 months of general product operation and maintenance beyond the 1 year payment term.
Note: The Event Horizon team aims to serve as a transparent, consistent, and reliable builder for the Uniswap community alongside other recognized names such as Oku for years to come. In that spirit, we approached valuation in an effort to both allow for operational viability and continued future work/value provision for the DAO and to be respectful and reasonable in what we ask of the DAO. Our reasoning landed as follows:
From the DAO’s perspective, there is clear value in expanding the votable supply. This is abundantly evident by the current >$200m quorum deficit. But it also strengthens Uniswap’s governance by reducing vulnerability and prevents future bottlenecks in decision-making.
From the individual delegate’s perspective, IDVs create tangible value by supporting their community involvement and in directly expanding their delegation through incentives.
To ground the valuation of governance participation, we looked at existing precedent: the delegate reward initiative. At current UNI prices, each compensated delegate receives ~600 UNI/month, while the average compensated delegate maintains ~1M UNI in delegations. In other words, consistent participation of ~1M UNI is currently valued by the DRI at ~600 UNI/month.
The IDV program is designed to mobilize up to 9M UNI. If even 10% of this target is reached (900K UNI), the mobilized voting power is equivalent to that of a compensated delegate presently valued at 600 UNI per month. At full capacity, IDVs nearly match the voting power of every compensated delegate combine, which currently represents a cumulative value of ~9,000 UNI per month.
Importantly, this added voting power also improves the cost efficiency of the reward initiative itself, since every compensated delegate will be eligible for their own vault and therefore become the direct recipients of the delegations driven by IDVs. The same delegates, being paid the same amount from DRI, now mobilizing a much more impactful benefit to the DAO.
The entire program’s total cost nets to ~750 UNI/month, or approximately the cost of a single compensated delegate. This is factoring in not just mobilized voting power but also upfront build costs, benefits to individual delegates, and ongoing maintenance and evolution.
Treasury Earmarked for Possible Emissions: 180,000 UNI
Proportional Scale
Re-Scaled
Key points on Emissions:
Flat-Rate Emissions: Each UNI emitted has a consistent marginal value. For example, at a 2% APR, every 1 UNI emitted secures 50 UNI in delegation for at least one year.
Not a Committed Expense: The 180,000 UNI is an earmark, not a guaranteed outlay. Actual emissions will depend on delegation uptake, which is expected to ramp gradually rather than begin at full scale. The UAC only emits an amount of UNI directly proportional to the amount of value (in the form of delegations) that the delegates, and thereby the DAO, have gained through the vaults. As depicted above, it is a direct trade-off between delegations and UNI emissions at the exact value exchange rate determined and managed by the DAO.
Conservative Buffer: While it is unlikely the full 9M will be delegated immediately, holding the full earmark avoids the need for a risky “top-up” proposal under sub-quorum conditions.
Non-Dilutive: It is important to distinguish these emissions from other programs, such as LP incentives, in that the emissions are exclusively dedicated to UNI token holders. Any token holder who helps secure the DAO receives their share of emissions. As such, dilution is fully avoidable. And, contextualized at scale, even at its fullest emission rate, it represents ~0.034% in completely avoidable dilution annually.
DAO Flexibility: Any unused portion remains in UAC custody and ultimately under DAO control, to be reallocated or repurposed as the community decides. After the initial 12 months, the UAC will begin a discussion and eventual vote to determine how any remaining emissions amount should be utilized, be it continued incentive rounds, return to treasury, or otherwise.
Eligible Delegates:
Path 1 Treasury Delegation Application: All delegates eligible for the Treasury Delegation program will automatically be eligible to have a vault created and funded for them, regardless of whether or how much delegation they received during the treasury delegation round.
Path 2 – Delegate Compensation Applicants: Anyone who applied for delegate compensation will be considered eligible.
UI: To begin, Event Horizon will host the initial IDV UI. That said, after initial instantiation, any DAO-approved vendor will be eligible to host a white labeled instance of the vaults.
APR Management:
Baseline Rate: The program will target an average APR of 2%.
Governance Oversight: The UAC may propose to amend the APR cap at its discretion. Any recommendation to increase the APR cap must be taken to a Snapshot vote.
APR Ceiling: No rate shall exceed 10% APR at any time without Snapshot approval.
Reporting: The UAC will provide monthly reporting on the rate of emissions, delegation amounts, and other relevant information during the community calls.
APR Adjustments: The UAC may adjust the APR within the program to optimize participation (e.g., a front-loaded APR schedule to encourage early delegations). All adjustments will be posted publicly under the program’s forum thread and will require a customary Snapshot vote. No adjustment shall exceed 10% APR for any duration without Snapshot approval.
Custody of Funds: The UAC will custody funds and disperse them for emissions as needed.
Thank you for this great document. Since I’ve been watching the ecosystem from above at DeepDAO, and this fascinating discussion is diving into the details of governance, I found myself needing to take a step back and ask if there’s a strategy document for the DAO. I’d like to understand questions like these:
Thank you for this great document. Since I’ve been watching the ecosystem from above at DeepDAO, and this fascinating discussion is diving into the details of governance, I found myself needing to take a step back and ask if there’s a strategy document for the DAO. I’d like to understand questions like these:
I realize these are basic questions, and the answers are likely known for everyone here. All of these questions can also be answered by diving into the forum, and the proposals themselves over time. But I wonder if there’s a short document, something like a Uniswap Governance exec. summary.
The issues presented by the UAC are of extreme importance, and we appreciate the effort of all members involved in bringing this to light and discussing the issue. After reading the original post and comments, we’d like to bring some more context to the discussion, as well as offer our take regarding possible solutions.
The issues presented by the UAC are of extreme importance, and we appreciate the effort of all members involved in bringing this to light and discussing the issue. After reading the original post and comments, we’d like to bring some more context to the discussion, as well as offer our take regarding possible solutions.
We've been to some calls, but it's our first time in this forum, so for those who don't know: Blockful is a governance security company, we've received a grant from the UF last year to research and build a dashboard to keep track of governance security. We believe that some of the information we are keeping track - publicly available at anticapture.com/uni - can help better evaluate the next steps. Our team counts with stewards, contributors, and delegates in other DAOs.
As we see, in the original post and other comments so far, there are only 3 presented approaches that at this time would help prevent the decreasing quorum from offering real risks of creating governance paralysis, so we will focus on those.
Regarding all approaches that get more tokens from the treasury and delegate them to already active delegates selected by the governance itself.
tl;dr we are against it because benefits collusion to capture, increase and/or perpetuate power and payments in the DAO
Regarding the reduction of the necessary amount of votes cast in favor of a proposal for its results to be valid.
tl;dr we find it not ideal, but not as terrible as it initially sounds
It helps solve the problem by making the quorum more compatible with current voting power; it also increases the proportional voice of smaller delegates in comparison to what’s needed to execute something.
It's important to understand that quorum is a defense against silent proposals and attacks in which the attacker is able to nullify the defenses of the DAO. a. An attack that could compromise the governance interface can be an issue with low quorums for example b. An attack during holidays is the most classical example of a problem in low quorums.
Although partially contrarian to the approach, we don’t see a big risk increase in Uniswap DAO reducing its quorum from 40M to 24M UNI because Uniswap has the contract implementation defenses and the community necessary to defend from its issues. a. the limit of active proposals from an address and the permissionless proposal cancellation in cases wehere the proposer no longer holds VP above the threshold are examples of those defenses b. Still, it’d be preferable not to reduce quorum if not needed. More defense = better
Regarding @kpk comment about quorum vs treasury size, the quorum already sits way below the treasury value, and so does the delegated supply. We believe Uniswap has not been attacked/arbitraged out of its treasury so far because of its treasury composition(99% UNI), not because of the cost of the VP majority or quorum.
From proposal to execution, there are ~9 days of delays, and we can assume that FUD would quickly melt those billions of UNI in the event of an attack. a. There’s no certainty on this, and its better safe than sorry, but we don’t see it as worth holding this as the main worry for this change, considering that the quorum value has already fluctuated between $195M and $790M in the last year. b. The DeFi calculations of how far the token price could melt in such short notice have too many variables and we'd welcome a well based challenge or support to this thesis.
The real questions to consider regarding quorum are: a. Is there anyone that would profit by “risking/burning capital at the quorum’s dollar value” to break Uniswap token or take control of its governance permissions over the protocol? b. Can delegates coordinate to defend against an attack of 24M UNI at all times?
If we can defend against 40M VP, then we can defend against 24M VP. So either we are already at risk, or the risk doesn't change much. a. If we can’t defend either, then estimating if someone who won’t be willing to lose 40M UNI worth to attack would be willing to lose 24M to do so would be the best questioning. And we find it almost impossibly complex to estimate such things.
The quorum also presents a previously undiscussed problem of making the current treasury delegations very close to enough for dominance. Assuming the active voting power really follows a patern of decrease but only until its barely above quorum, this could mean a very hard to revert dominance by delegate teams over the next couple of years.
Regarding initiatives of token emissions as incentives for holders to have their tokens delegated
tl;dr it's be the best option presented so far, but will need refinement
@Curia and @1a35e1 made very good additions to this discussion. It'd be very interesting to explore alternatives together as we see the approaches presented being dissimilar in some senses, as lighthouse doesn't explicitly put it as financial incentives and Curia brings reputation to the table, which we are deeply favorable towards if well executed.
For that reason:
a. We believe there should be an incentive for active delegations, independent of alignment or quality of the delegate.
b. It’s not the ideal governance’s role to enforce a distinction between "good" and "bad" delegates for holders to choose from to get yield from vetted vaults. It severely hurts holder's choice and power.
c. If you want people to participate, holders should have power over governance, not be limited by it in their choice of who to delegate to i they want yields.The other options presented are (very) interesting mechanisms to experiment with and can bring positive results. Still, given the state of quorum and activity, we don’t believe they would be beneficial at this point or are prioritary.
Particularly for Optimistic Governance, given that we are struggling to maintain quorums above the necessary level as they continue to decline, we don’t want to create an option for any proposal to pass instead of fail in case the quorum is not met, even with a smaller quorum for vetoing.
In summary:
Great insights here. Appreciate the time and detail put into this from all the authors.
Great insights here. Appreciate the time and detail put into this from all the authors.
I’m still mulling this proposal, but currently I’m leaning towards a voting no. As Ben mentioned above I should have also been more engaged earlier in the process, but it’s can be hard to keep up.
In transparency I’ve also been a strong believer in Unistaker and thought via a protocol that we at Tally worked on, that this problem could be solved more elegantly via Unistaker itself via open permission-less infrastructure built on top. In the process of working with a number of DAOs we learned quite a bit around the problem space.
I’m still mulling this proposal, but currently I’m leaning towards a voting no. As Ben mentioned above I should have also been more engaged earlier in the process, but it’s can be hard to keep up.
In transparency I’ve also been a strong believer in Unistaker and thought via a protocol that we at Tally worked on, that this problem could be solved more elegantly via Unistaker itself via open permission-less infrastructure built on top. In the process of working with a number of DAOs we learned quite a bit around the problem space.
Solution–Problem Mismatch The problem as mentioned really is insufficient, engaged quorum. IDVs pay for passive delegation and require no proof of liveness, deliberation, or accountability. A wallet that never revisits governance earns the same as an active steward. That raises raw turnout without improving decision quality—at best cosmetic quorum, at worst lower‑signal votes. In this case raw turnout might just be count of votes, but fewer actual participants.
Entrenchment & Capture Risk Rewards scale with existing delegate size and longevity, creating a positive‑feedback loop that entrenches incumbents and incentivizes delegate blocs to coordinate. This has been a major concern that we’ve encountered talking with other DAOS. This positive feedback loop increases concentration and reduces contestability—the opposite of resilient governance.
Treasury Inefficiency (No Durable Asset Created) IDVs emit UNI continuously to rent temporary voting power. When emissions stop, alignment decays. The DAO spends scarce runway without creating a durable capability, product, or asset. Any program that requires perpetual emissions to sustain a metric should face a very high bar. It’s unclear to me if we’ve met that here. Uniswap is already pursuing mechanisms to attract UNI (e.g., UVN). IDVs would compete head‑to‑head in an APY race for the same token, fragmenting strategy and forcing the DAO to outbid itself. We should probably opt to pick one lever, not subsidize competing ones, or even wait a bit to see what happens with the A16z delegations and the Fee Switch (which might naturally bring in a new cohort of participants)
hey @cp0x - the latest information we have as UAC is what was shared in the FFG #2 summary:
A16z, a participant of the FFG, clarified that the token delegations they retracted in June are due to internal structural changes. Whether the retracted voting power will be redelegated or not is still unclear, and no timeline for potential redelegation was provided.
I’m still mulling this proposal, but currently I’m leaning towards a voting no. As Ben mentioned above I should have also been more engaged earlier in the process, but it’s can be hard to keep up.
In transparency I’ve also been a strong believer in Unistaker and thought via a protocol that we at Tally worked on, that this problem could be solved more elegantly via Unistaker itself via open permission-less infrastructure built on top. In the process of working with a number of DAOs we learned quite a bit around the problem space.
I’m still mulling this proposal, but currently I’m leaning towards a voting no. As Ben mentioned above I should have also been more engaged earlier in the process, but it’s can be hard to keep up.
In transparency I’ve also been a strong believer in Unistaker and thought via a protocol that we at Tally worked on, that this problem could be solved more elegantly via Unistaker itself via open permission-less infrastructure built on top. In the process of working with a number of DAOs we learned quite a bit around the problem space.
Solution–Problem Mismatch The problem as mentioned really is insufficient, engaged quorum. IDVs pay for passive delegation and require no proof of liveness, deliberation, or accountability. A wallet that never revisits governance earns the same as an active steward. That raises raw turnout without improving decision quality—at best cosmetic quorum, at worst lower‑signal votes. In this case raw turnout might just be count of votes, but fewer actual participants.
Entrenchment & Capture Risk Rewards scale with existing delegate size and longevity, creating a positive‑feedback loop that entrenches incumbents and incentivizes delegate blocs to coordinate. This has been a major concern that we’ve encountered talking with other DAOS. This positive feedback loop increases concentration and reduces contestability—the opposite of resilient governance.
Treasury Inefficiency (No Durable Asset Created) IDVs emit UNI continuously to rent temporary voting power. When emissions stop, alignment decays. The DAO spends scarce runway without creating a durable capability, product, or asset. Any program that requires perpetual emissions to sustain a metric should face a very high bar. It’s unclear to me if we’ve met that here. Uniswap is already pursuing mechanisms to attract UNI (e.g., UVN). IDVs would compete head‑to‑head in an APY race for the same token, fragmenting strategy and forcing the DAO to outbid itself. We should probably opt to pick one lever, not subsidize competing ones, or even wait a bit to see what happens with the A16z delegations and the Fee Switch (which might naturally bring in a new cohort of participants)
hey @cp0x - the latest information we have as UAC is what was shared in the FFG #2 summary:
A16z, a participant of the FFG, clarified that the token delegations they retracted in June are due to internal structural changes. Whether the retracted voting power will be redelegated or not is still unclear, and no timeline for potential redelegation was provided.
This will indeed be a challenge. As we’ve seen in the recent vote for DUNI, it is possible to activate non-regular voters on critical proposals. The UAC and @DonOfDAOs are reaching out to these delegates, hoping to get their engagement on the GLI proposals.
Thanks for putting together such a detailed report. At Lighthouse, we agree that maintaining a Healthy Delegation Margin (“HDM”) is a key metric for assessing and improving governance resiliency in Uniswap and we should collectively lean more into how this metric can serve us.
While the documented 11.80% margin is concerning, as of prop 89, ~193M tokens have been delegated, so there is more than enough voting power ready to meet quorum. Our raw analysis can be found here.
Thanks for putting together such a detailed report. At Lighthouse, we agree that maintaining a Healthy Delegation Margin (“HDM”) is a key metric for assessing and improving governance resiliency in Uniswap and we should collectively lean more into how this metric can serve us.
While the documented 11.80% margin is concerning, as of prop 89, ~193M tokens have been delegated, so there is more than enough voting power ready to meet quorum. Our raw analysis can be found here.
We think it would be better to examine and activate this dormant voting power instead of designing new systems.
The main questions are:
How do we encourage voters to delegate to active, engaged participants and sustain that behavior over time?
How do we objectively track, measure and maintain this metric?
Across a historical dataset of approximately 486,000 delegations, the geometric mean of new unique delegators per month is 4,231.
Therefore the issue is not the lack of delegation, but rather the lack of participation by those who already hold delegated power.
The top 100 addresses held 193M UNI in delegated voting power, however we know many of the top holders have specific reasons for not participating in voting, so we took a look at how the data changes if we skip the top 25 or 50 holders.
| Segment | Inactive Delegates | Delegated Voting Power | Unique Delegators |
|---|---|---|---|
| Skipping 50 | 44 | 20.4M UNI | 48 |
| Skipping 25 | 62 | 47.9M UNI | 67 |
Redirecting a fraction of this latent delegation could restore a strong and reliable quorum margin.
Rather than implementing entirely new governance systems that introduce complexity and potential risk, we propose building an open, programmable mechanism to encourage re-delegation towards active participants. Such a system could:
This approach would address the root cause of the issue (delegating to inactive voters) without requiring complex protocol improvements.
We look forward to dropping in and discussing this further in the next community call.
This will indeed be a challenge. As we’ve seen in the recent vote for DUNI, it is possible to activate non-regular voters on critical proposals. The UAC and @DonOfDAOs are reaching out to these delegates, hoping to get their engagement on the GLI proposals.
Thanks for putting together such a detailed report. At Lighthouse, we agree that maintaining a Healthy Delegation Margin (“HDM”) is a key metric for assessing and improving governance resiliency in Uniswap and we should collectively lean more into how this metric can serve us.
While the documented 11.80% margin is concerning, as of prop 89, ~193M tokens have been delegated, so there is more than enough voting power ready to meet quorum. Our raw analysis can be found here.
Thanks for putting together such a detailed report. At Lighthouse, we agree that maintaining a Healthy Delegation Margin (“HDM”) is a key metric for assessing and improving governance resiliency in Uniswap and we should collectively lean more into how this metric can serve us.
While the documented 11.80% margin is concerning, as of prop 89, ~193M tokens have been delegated, so there is more than enough voting power ready to meet quorum. Our raw analysis can be found here.
We think it would be better to examine and activate this dormant voting power instead of designing new systems.
The main questions are:
How do we encourage voters to delegate to active, engaged participants and sustain that behavior over time?
How do we objectively track, measure and maintain this metric?
Across a historical dataset of approximately 486,000 delegations, the geometric mean of new unique delegators per month is 4,231.
Therefore the issue is not the lack of delegation, but rather the lack of participation by those who already hold delegated power.
The top 100 addresses held 193M UNI in delegated voting power, however we know many of the top holders have specific reasons for not participating in voting, so we took a look at how the data changes if we skip the top 25 or 50 holders.
| Segment | Inactive Delegates | Delegated Voting Power | Unique Delegators |
|---|---|---|---|
| Skipping 50 | 44 | 20.4M UNI | 48 |
| Skipping 25 | 62 | 47.9M UNI | 67 |
Redirecting a fraction of this latent delegation could restore a strong and reliable quorum margin.
Rather than implementing entirely new governance systems that introduce complexity and potential risk, we propose building an open, programmable mechanism to encourage re-delegation towards active participants. Such a system could:
This approach would address the root cause of the issue (delegating to inactive voters) without requiring complex protocol improvements.
We look forward to dropping in and discussing this further in the next community call.
Calculations: Rewards will be calculated by scaling an annualized fixed-rate APR to a daily rate. Each day, when the reward distribution is run by the contract, it will iterate over every delegate and perform the following process for each of their delegators:
Calculations: Rewards will be calculated by scaling an annualized fixed-rate APR to a daily rate. Each day, when the reward distribution is run by the contract, it will iterate over every delegate and perform the following process for each of their delegators:
Delegate Inclusion: Delegates must be approved and added. The first batch will be done via snapshot vote. Changes can be made by the DAO via the UAC in the same way APR adjustments can be made.
Calculations: Rewards will be calculated by scaling an annualized fixed-rate APR to a daily rate. Each day, when the reward distribution is run by the contract, it will iterate over every delegate and perform the following process for each of their delegators:
Calculations: Rewards will be calculated by scaling an annualized fixed-rate APR to a daily rate. Each day, when the reward distribution is run by the contract, it will iterate over every delegate and perform the following process for each of their delegators:
Delegate Inclusion: Delegates must be approved and added. The first batch will be done via snapshot vote. Changes can be made by the DAO via the UAC in the same way APR adjustments can be made.
Hi all, late to the party here. I think i have a grasp on how this would work, but wanted to confirm. Can you list concisely where there are centralized points of control in the IDV system?
Thanks Jordan.
The UAC will transfer UNI as needed to the distribution contract.
Also, and apologies if i missed a clarification on this, but my initial read led me to believe that which delegates have vaults is also gated. Is that correct?
Hi all, late to the party here. I think i have a grasp on how this would work, but wanted to confirm. Can you list concisely where there are centralized points of control in the IDV system?
Thanks Jordan.
The UAC will transfer UNI as needed to the distribution contract.
Also, and apologies if i missed a clarification on this, but my initial read led me to believe that which delegates have vaults is also gated. Is that correct?
II. Incentivized Delegation Vaults (IDVs): Increase Votable Supply
And one more question - legal
II. Incentivized Delegation Vaults (IDVs): Increase Votable Supply
And one more question - legal
Last time, about a year ago, there was a vote on the distribution of profits from the protocol and everything was suspended due to legal problems
Will there be legal problems here, because delegateing is essentially a profit for the holders of the UNI token (who delegated)?
Hi, @DonOfDAOs
Has there been any new information from A16Z about the delegations?
I understand that even if they return, the problem still remains and it is not worth being dependent on the decision of one major delegate
We would like to inform the community that we have voted in favor of the GLI — Treasury delegation Round 2 proposal for the following reasons, as expressed in our delegation thread:
We would like to inform the community that we have voted in favor of the GLI — Treasury delegation Round 2 proposal for the following reasons, as expressed in our delegation thread:
That said, we want to reiterate our opposition to selecting delegates for treasury delegation through a DAO vote, as this favors popular delegates and incentivizes harmful practices such as collusion or cartelization among delegates to vote for themselves. We believe that delegates should instead be ranked based on participation ratios, which is an objective criterion that allocates VP to the most active delegates. We hope this adjustment will be made in the onchain vote.
And we have voted against the GLI — Incentivized Delegation Vaults proposal for the following reasons, which we have already outlined in this debate:
Additionally, we want to reiterate our concern regarding a potential conflict of interest between a member of the UAC and the company proposed to develop the IDV system. We do not consider it healthy governance practice for one individual to hold two opposing roles—both evaluating the delivery of a product and authorizing payments to a service provider with which they are directly affiliated.
This is being finalized today and will be posted next week!
There are three domains of control:
Asset Custody: The full emissions pool is retained within a UAC-controlled SAFE wallet. The UAC will transfer UNI as needed to the distribution contract. This means the vast majority of UNI at any given point will be retained by the UAC, as with many other initiatives.
There are three domains of control:
Asset Custody: The full emissions pool is retained within a UAC-controlled SAFE wallet. The UAC will transfer UNI as needed to the distribution contract. This means the vast majority of UNI at any given point will be retained by the UAC, as with many other initiatives.
Asset Distribution As mentioned above, the assets held in UAC custody are transferred to the distribution contract on an as-needed basis. Once loaded to this contract, rewards are sent directly to the recipient wallets.
Parameter Change: The DAO may elect to make changes to emissions variables, namely APR. This can be done by either Event Horizon or the UAC. Event Horizon has no preference toward retaining this capacity itself. Rather, it would be useful for the UAC to have the option to offload the technical change work to EH. That said, this can be reduced down to just UAC if generally preferred.
The application thread has been posted: https://gov.uniswap.org/t/gli-treasury-delegation-round-2-applications/25832
I have a question after the community call - how will the quorum of on-chain voting take place if we are gathering delegations for this quorum? What are the possibilities?
I voted FOR both
I think it is important not to miss the moment, so as not to end up in a situation where, due to the lack of quorum, we cannot resolve any issue I also think it is important that the quorum is not reduced - this is an important and correct decision, in my opinion
I voted FOR both
I think it is important not to miss the moment, so as not to end up in a situation where, due to the lack of quorum, we cannot resolve any issue I also think it is important that the quorum is not reduced - this is an important and correct decision, in my opinion
I think this experimental solution is a good way out of the current situation As I understand it, direct staking will be subject to legal problems, especially in accordance with DUNA
Also, I want to say that it is certainly important to check the contracts and this must be done before the on-chain vote is received, and at the moment we are voting for the initial decision - the technical part can be checked in parallel
I also think it is important that the quorum is not reduced - this is an important and correct decision, in my opinion
The distribution of 10 million UNI has already been carried out and this mechanism works, especially with restrictions of 2.5 (although it seems to me that this parameter can be reduced)
I have another question after the community call
There were reports that there would be an application form for Treasury delegation Round 2 earlier this week. I may have missed something, but I don't see it.
ScopeLift has voted against the delegation vaults proposal on Snapshot. There are two distinct reasons for this.
First, there’s not currently enough clarity on the technical implementation of what’s being proposed. I respect the work of Event Horizon, and to their credit, when I reached out to ask questions, they were extremely responsive and helpful. They open sourced the distribution contracts at my request, and are working to provide more information and documentation. I suspect that in short order, we can get to a point where we have the requisite transparency on the technical details, and therefore assess the technical soundness of the proposal.
On structural elements such as per-delegate caps and the selection mechanism, I will hold off until a broader community consensus forms. These are meaningful design tradeoffs, and it is best to align across multiple stakeholders before narrowing in on specifics.
On structural elements such as per-delegate caps and the selection mechanism, I will hold off until a broader community consensus forms. These are meaningful design tradeoffs, and it is best to align across multiple stakeholders before narrowing in on specifics.
Program duration The two-year framing is not a compensation period or deadline, but an upper bound commitment intended to help provide the DAO with a degree of confidence, certainty and reliability. It signals Event Horizon’s willingness to operate and maintain the system beyond the 1-year program duration, at no additional cost, should the DAO decide to continue beyond the initial funding window. We dont want to walk away leaving the program in a non-functional position. Conversely, if the DAO wishes to end the program sooner, of course, it may at any point. The extension does not signal a target 2-year program run time, and removing the extended commitment would strictly reduce optionality and assurance for the DAO.
Relationship with UVN UVN’s timeline and ultimate impact remain variable. It is not yet certain that UVN alone will restore quorum stability, nor that it will launch in the near term. IDVs are intended as a DAO-led stopgap that can support quorum until UVN is proven effective. If UVN fully solves the problem, IDVs can be deprecated early. Additionally, I would not assume that UVN and IDVs are intrinsically mutually exclusive. There is a possibility that the systems could be complementary rather than competitive.
Conflict of interest
I want to directly address this. By intentional design, the program is structured such that it does not create a financial incentive tied to APR adjustments, subjective milestone assessments, or any subjective behavior on the part of the UAC. Compensation is not contingent on the rate of emission or subjective determinations.
That said, I fully recognize the importance of impartiality and transparency. I bring a unique degree of familiarity with and expertise in these mechanisms which could benefit the UAC in guiding the program. In this regard, I believe I stand to help the program and the DAO to drive the most possible value out of the initative that we can.
However, if the DAO believes there is a material risk or 'severe conflict of interest', I have no reservation recusing myself from IDV management, as other committee members (e.g., KPK) have in analogous treasury situations. I have full faith and confidence in the other members of the committee to manage operations with or without my direct involvement.
Thank you for structuring the two proposals!
We have separate feedback and comments for each of them:
Background:
Background:
Beginning in June, the UAC internally recognized votable supply, which at the time stood at ~41M UNI (relative to the 40M UNI quorum), as a potentially imminent and systemic risk to the DAO. In response, and in efforts to protect the DAO, the UAC proactively began the first Governance Logistics Improvement research report and RFC. The report sought to identify the greatest issues Uniswap governance faces, with particular emphasis on votable supply as it pertains to quorum.
Notably, the report emphasized that “the DAO operates under an unspoken dependency: that nearly all of its top delegates will participate in every vote, without exception. Put plainly, the exit of even a single large voter could bring governance to a standstill. Further, the risk of delegate removal from the voter body is not hypothetical; we’ve already seen this dynamic unfold as several institutional actors have scaled back participation in response to regulatory pressures.”
Incidentally, during the initial weeks of research, that dependency risk became a material reality as changes in the token custody process led to A16Z’s removal of ~20M UNI from delegation. As it stands today, the consistently active votable supply stands at just 21M UNI. This is just 52.5% of the required 40M UNI quorum, or approximately a $209 million vote deficit. While the UAC strongly believes that, for now, critical proposals will pass through the direct support of large, less active voters, such as A16Z, broader community governance risks grinding to a complete halt.
To address this mounting issue, the UAC invoked an open call for community-sourced solutions. This call resulted in five potential pathways, which were then aggregated and presented to the community. Of those five proposed solutions, two have emerged with majority support within the forum discussions: Treasury Delegations and Incentivized Delegation Vaults. (Governance Logistics Improvement)
This proposal will expand upon the community-preferred solutions, providing context around the specific configuration variables of each in an effort to pass a single, holistic quorum resolution bill.
Next Steps Summary:
UAC: The UAC has reviewed and endorsed the above research and RFC, as well as the conceptual solutions which the community generally agreed upon (Treasury Delegations + Incentivized Delegation Vaults). Given there is no counterparty to do so, the UAC will directly champion the push forward of the Treasury Delegations proposal and its implementation should it pass. With regards to IDVs, the UAC will serve under the DAO’s guidance as the program manager of the Incentivized Delegation Vault initiative, should it pass (detailed below).
Temperature Checks: Following the posting of this proposal draft, the UAC will publish the TD temperature. Event Horizon will publish the IDV forum draft shortly, and eventually, the temperature check.
On-Chain Vote: Should TD pass, the UAC will publish the on-chain vote. Should IDVs pass, Event Horizon will publish the on-chain vote.
Treasury delegations have received nearly universal support, given their direct method of addressing the votable supply shortfall and proven historical precedent and track record. In fact, today, half of the remaining votable supply is directly sourced by the previous treasury delegation round (Governance Logistics Improvement) . The UAC recommends the following configuration:
Delegation Amount: 10M UNI This proposal will instantiate an additional 10M UNI in delegations from the treasury to community delegates. This will bring the resulting votable supply to ~31M UNI, or just ~25% below the required quorum.
Relationship to Treasury Delegation Round 1: Additive This round will not revoke, supersede, change, or otherwise impact the continuation of the 10M UNI previously delegated during the last treasury delegation round. As a result, the cumulative treasury delegated UNI will stand at 20M UNI.
Delegation Cap: 2.5M To avoid excessive consolidation of voting power, no round 2 applicant may accrue greater than 2.5M UNI in total voting power (be it from the treasury or otherwise) as a result of this round.
Ex. if an applicant holds 1M UNI in delegations, the most they stand to receive from this program is an additional 1.5M UNI in delegations. The remainder will waterfall to the next most eligible candidate.
Eligibility:
Selection Process: Election The DAO will vote for its preferred delegates from the pool of eligible candidates.
Technical Implementation: Franchiser An identical approach to round one. A full review by Chainsecurity on the Franchiser contracts can be found here.
Distribution Model: Waterfall Each eligible candidate will be listed on the election snapshot vote. The DAO will allocate voting power to each candidate as it sees fit. At the end of the voting period, all delegates will be ranked in order from the most to the least votes received. Sequentially from the top of the list to the bottom, each delegate will receive delegated voting power up to the point at which they individually hold 2.5M total VP. Then, the process repeats for the next delegate, and the next, until all VP has been allocated.
Self-Voting: Because this election is not for a finite number of seats, and it is best to encourage broader distribution of votes, self-voting will not leverage the max-matching model seen during committee elections. Instead, each voter will be eligible to commit a maximum of 25% to himself or herself and distribute the remainder as they see fit.
Selected Delegates' Responsibilities: Each delegate elected by the DAO, who will receive the treasury delegation, should maintain the following requirements:
Program Management: The UAC will post a report every 3 months detailing the participation record of each delegation recipient, along with other relevant program information. Delegates who fail to meet the minimum participation requirements will have their delegations revoked via an on-chain voting. In the event of a revocation, the removed delegation will then be distributed in the same fashion as the initial waterfall design. The next highest scoring candidate will receive an increase in delegation up to the point at which they reach the 2.5M cap. If there is still voting power to distribute, it will then go to the next candidate. If all candidates have already met their 2.5M cap, the UAC will contact the first runner-up from the original election for inclusion into the program. If the first runner-up declines, cannot be contacted, or meets their 2.5M cap before the redelegated amount has been exhausted, the process continues sequentially through the following runner-ups.
Delegate Principles: All delegation recipients will be expected to review and uphold the delegate principles as ratified here: https://www.tally.xyz/gov/uniswap/proposal/78
We are strongly in favour of treasury delegation. While we do not see this as a long-term solution, it is a necessary step to increase the voting supply to a level that allows ordinary proposals to reach quorum reliably. The recent vote on establishing Uniswap Governance as DUNI demonstrated that the community is both capable and willing to mobilise for proposals with significant impact. This is a healthy sign for Uniswap governance overall, but it also highlights the importance of building a consistent base of regular voters who can support the many “ordinary operational” proposals that have underpinned the protocol’s growth over the years. Treasury delegation offers a practical way to achieve this.
We support UAC’s suggested path forward and, at the same time, echo @SEEDGov’s recommendation that adding objective eligibility requirements for delegate candidates is likely to provide better results. We believe it is fair to include objective requirements in the application as suggested, determining the baseline for qualification to the election. Clear criteria—such as the suggested 75% voting participation—help set a fair baseline and ensure reliability from those receiving delegated funds.
Thanks to @DonOfDAOs and the rest of the UAC for putting these ideas forward. As a disclaimer, 404 is one of the delegates currently participating in the active treasury delegation program.
After reviewing the options discussed and current feedback for governance improvements, treasury delegation appears to be the favored path. This is understandable, as the program has been battle-tested within the DAO and proven effective in meeting its core objective: attaining quorum.
Hey Jojo,
Thank you for the feedback!
Will there be an option to not choose any delegate in the list of options?
TD: If I'm understanding your question properly, this would be achieved by abstaining or not voting.
II. Incentivized Delegation Vaults (IDVs): Increase Votable Supply
And one more question - legal
II. Incentivized Delegation Vaults (IDVs): Increase Votable Supply
And one more question - legal
Last time, about a year ago, there was a vote on the distribution of profits from the protocol and everything was suspended due to legal problems
Will there be legal problems here, because delegateing is essentially a profit for the holders of the UNI token (who delegated)?
Hi, @DonOfDAOs
Has there been any new information from A16Z about the delegations?
I understand that even if they return, the problem still remains and it is not worth being dependent on the decision of one major delegate
We would like to inform the community that we have voted in favor of the GLI — Treasury delegation Round 2 proposal for the following reasons, as expressed in our delegation thread:
We would like to inform the community that we have voted in favor of the GLI — Treasury delegation Round 2 proposal for the following reasons, as expressed in our delegation thread:
That said, we want to reiterate our opposition to selecting delegates for treasury delegation through a DAO vote, as this favors popular delegates and incentivizes harmful practices such as collusion or cartelization among delegates to vote for themselves. We believe that delegates should instead be ranked based on participation ratios, which is an objective criterion that allocates VP to the most active delegates. We hope this adjustment will be made in the onchain vote.
And we have voted against the GLI — Incentivized Delegation Vaults proposal for the following reasons, which we have already outlined in this debate:
Additionally, we want to reiterate our concern regarding a potential conflict of interest between a member of the UAC and the company proposed to develop the IDV system. We do not consider it healthy governance practice for one individual to hold two opposing roles—both evaluating the delivery of a product and authorizing payments to a service provider with which they are directly affiliated.
This is being finalized today and will be posted next week!
There are three domains of control:
Asset Custody: The full emissions pool is retained within a UAC-controlled SAFE wallet. The UAC will transfer UNI as needed to the distribution contract. This means the vast majority of UNI at any given point will be retained by the UAC, as with many other initiatives.
There are three domains of control:
Asset Custody: The full emissions pool is retained within a UAC-controlled SAFE wallet. The UAC will transfer UNI as needed to the distribution contract. This means the vast majority of UNI at any given point will be retained by the UAC, as with many other initiatives.
Asset Distribution As mentioned above, the assets held in UAC custody are transferred to the distribution contract on an as-needed basis. Once loaded to this contract, rewards are sent directly to the recipient wallets.
Parameter Change: The DAO may elect to make changes to emissions variables, namely APR. This can be done by either Event Horizon or the UAC. Event Horizon has no preference toward retaining this capacity itself. Rather, it would be useful for the UAC to have the option to offload the technical change work to EH. That said, this can be reduced down to just UAC if generally preferred.
The application thread has been posted: https://gov.uniswap.org/t/gli-treasury-delegation-round-2-applications/25832
I have a question after the community call - how will the quorum of on-chain voting take place if we are gathering delegations for this quorum? What are the possibilities?
I voted FOR both
I think it is important not to miss the moment, so as not to end up in a situation where, due to the lack of quorum, we cannot resolve any issue I also think it is important that the quorum is not reduced - this is an important and correct decision, in my opinion
I voted FOR both
I think it is important not to miss the moment, so as not to end up in a situation where, due to the lack of quorum, we cannot resolve any issue I also think it is important that the quorum is not reduced - this is an important and correct decision, in my opinion
I think this experimental solution is a good way out of the current situation As I understand it, direct staking will be subject to legal problems, especially in accordance with DUNA
Also, I want to say that it is certainly important to check the contracts and this must be done before the on-chain vote is received, and at the moment we are voting for the initial decision - the technical part can be checked in parallel
I also think it is important that the quorum is not reduced - this is an important and correct decision, in my opinion
The distribution of 10 million UNI has already been carried out and this mechanism works, especially with restrictions of 2.5 (although it seems to me that this parameter can be reduced)
I have another question after the community call
There were reports that there would be an application form for Treasury delegation Round 2 earlier this week. I may have missed something, but I don't see it.
ScopeLift has voted against the delegation vaults proposal on Snapshot. There are two distinct reasons for this.
First, there’s not currently enough clarity on the technical implementation of what’s being proposed. I respect the work of Event Horizon, and to their credit, when I reached out to ask questions, they were extremely responsive and helpful. They open sourced the distribution contracts at my request, and are working to provide more information and documentation. I suspect that in short order, we can get to a point where we have the requisite transparency on the technical details, and therefore assess the technical soundness of the proposal.
On structural elements such as per-delegate caps and the selection mechanism, I will hold off until a broader community consensus forms. These are meaningful design tradeoffs, and it is best to align across multiple stakeholders before narrowing in on specifics.
On structural elements such as per-delegate caps and the selection mechanism, I will hold off until a broader community consensus forms. These are meaningful design tradeoffs, and it is best to align across multiple stakeholders before narrowing in on specifics.
Program duration The two-year framing is not a compensation period or deadline, but an upper bound commitment intended to help provide the DAO with a degree of confidence, certainty and reliability. It signals Event Horizon’s willingness to operate and maintain the system beyond the 1-year program duration, at no additional cost, should the DAO decide to continue beyond the initial funding window. We dont want to walk away leaving the program in a non-functional position. Conversely, if the DAO wishes to end the program sooner, of course, it may at any point. The extension does not signal a target 2-year program run time, and removing the extended commitment would strictly reduce optionality and assurance for the DAO.
Relationship with UVN UVN’s timeline and ultimate impact remain variable. It is not yet certain that UVN alone will restore quorum stability, nor that it will launch in the near term. IDVs are intended as a DAO-led stopgap that can support quorum until UVN is proven effective. If UVN fully solves the problem, IDVs can be deprecated early. Additionally, I would not assume that UVN and IDVs are intrinsically mutually exclusive. There is a possibility that the systems could be complementary rather than competitive.
Conflict of interest
I want to directly address this. By intentional design, the program is structured such that it does not create a financial incentive tied to APR adjustments, subjective milestone assessments, or any subjective behavior on the part of the UAC. Compensation is not contingent on the rate of emission or subjective determinations.
That said, I fully recognize the importance of impartiality and transparency. I bring a unique degree of familiarity with and expertise in these mechanisms which could benefit the UAC in guiding the program. In this regard, I believe I stand to help the program and the DAO to drive the most possible value out of the initative that we can.
However, if the DAO believes there is a material risk or 'severe conflict of interest', I have no reservation recusing myself from IDV management, as other committee members (e.g., KPK) have in analogous treasury situations. I have full faith and confidence in the other members of the committee to manage operations with or without my direct involvement.
Thank you for structuring the two proposals!
We have separate feedback and comments for each of them:
Background:
Background:
Beginning in June, the UAC internally recognized votable supply, which at the time stood at ~41M UNI (relative to the 40M UNI quorum), as a potentially imminent and systemic risk to the DAO. In response, and in efforts to protect the DAO, the UAC proactively began the first Governance Logistics Improvement research report and RFC. The report sought to identify the greatest issues Uniswap governance faces, with particular emphasis on votable supply as it pertains to quorum.
Notably, the report emphasized that “the DAO operates under an unspoken dependency: that nearly all of its top delegates will participate in every vote, without exception. Put plainly, the exit of even a single large voter could bring governance to a standstill. Further, the risk of delegate removal from the voter body is not hypothetical; we’ve already seen this dynamic unfold as several institutional actors have scaled back participation in response to regulatory pressures.”
Incidentally, during the initial weeks of research, that dependency risk became a material reality as changes in the token custody process led to A16Z’s removal of ~20M UNI from delegation. As it stands today, the consistently active votable supply stands at just 21M UNI. This is just 52.5% of the required 40M UNI quorum, or approximately a $209 million vote deficit. While the UAC strongly believes that, for now, critical proposals will pass through the direct support of large, less active voters, such as A16Z, broader community governance risks grinding to a complete halt.
To address this mounting issue, the UAC invoked an open call for community-sourced solutions. This call resulted in five potential pathways, which were then aggregated and presented to the community. Of those five proposed solutions, two have emerged with majority support within the forum discussions: Treasury Delegations and Incentivized Delegation Vaults. (Governance Logistics Improvement)
This proposal will expand upon the community-preferred solutions, providing context around the specific configuration variables of each in an effort to pass a single, holistic quorum resolution bill.
Next Steps Summary:
UAC: The UAC has reviewed and endorsed the above research and RFC, as well as the conceptual solutions which the community generally agreed upon (Treasury Delegations + Incentivized Delegation Vaults). Given there is no counterparty to do so, the UAC will directly champion the push forward of the Treasury Delegations proposal and its implementation should it pass. With regards to IDVs, the UAC will serve under the DAO’s guidance as the program manager of the Incentivized Delegation Vault initiative, should it pass (detailed below).
Temperature Checks: Following the posting of this proposal draft, the UAC will publish the TD temperature. Event Horizon will publish the IDV forum draft shortly, and eventually, the temperature check.
On-Chain Vote: Should TD pass, the UAC will publish the on-chain vote. Should IDVs pass, Event Horizon will publish the on-chain vote.
Treasury delegations have received nearly universal support, given their direct method of addressing the votable supply shortfall and proven historical precedent and track record. In fact, today, half of the remaining votable supply is directly sourced by the previous treasury delegation round (Governance Logistics Improvement) . The UAC recommends the following configuration:
Delegation Amount: 10M UNI This proposal will instantiate an additional 10M UNI in delegations from the treasury to community delegates. This will bring the resulting votable supply to ~31M UNI, or just ~25% below the required quorum.
Relationship to Treasury Delegation Round 1: Additive This round will not revoke, supersede, change, or otherwise impact the continuation of the 10M UNI previously delegated during the last treasury delegation round. As a result, the cumulative treasury delegated UNI will stand at 20M UNI.
Delegation Cap: 2.5M To avoid excessive consolidation of voting power, no round 2 applicant may accrue greater than 2.5M UNI in total voting power (be it from the treasury or otherwise) as a result of this round.
Ex. if an applicant holds 1M UNI in delegations, the most they stand to receive from this program is an additional 1.5M UNI in delegations. The remainder will waterfall to the next most eligible candidate.
Eligibility:
Selection Process: Election The DAO will vote for its preferred delegates from the pool of eligible candidates.
Technical Implementation: Franchiser An identical approach to round one. A full review by Chainsecurity on the Franchiser contracts can be found here.
Distribution Model: Waterfall Each eligible candidate will be listed on the election snapshot vote. The DAO will allocate voting power to each candidate as it sees fit. At the end of the voting period, all delegates will be ranked in order from the most to the least votes received. Sequentially from the top of the list to the bottom, each delegate will receive delegated voting power up to the point at which they individually hold 2.5M total VP. Then, the process repeats for the next delegate, and the next, until all VP has been allocated.
Self-Voting: Because this election is not for a finite number of seats, and it is best to encourage broader distribution of votes, self-voting will not leverage the max-matching model seen during committee elections. Instead, each voter will be eligible to commit a maximum of 25% to himself or herself and distribute the remainder as they see fit.
Selected Delegates' Responsibilities: Each delegate elected by the DAO, who will receive the treasury delegation, should maintain the following requirements:
Program Management: The UAC will post a report every 3 months detailing the participation record of each delegation recipient, along with other relevant program information. Delegates who fail to meet the minimum participation requirements will have their delegations revoked via an on-chain voting. In the event of a revocation, the removed delegation will then be distributed in the same fashion as the initial waterfall design. The next highest scoring candidate will receive an increase in delegation up to the point at which they reach the 2.5M cap. If there is still voting power to distribute, it will then go to the next candidate. If all candidates have already met their 2.5M cap, the UAC will contact the first runner-up from the original election for inclusion into the program. If the first runner-up declines, cannot be contacted, or meets their 2.5M cap before the redelegated amount has been exhausted, the process continues sequentially through the following runner-ups.
Delegate Principles: All delegation recipients will be expected to review and uphold the delegate principles as ratified here: https://www.tally.xyz/gov/uniswap/proposal/78
We are strongly in favour of treasury delegation. While we do not see this as a long-term solution, it is a necessary step to increase the voting supply to a level that allows ordinary proposals to reach quorum reliably. The recent vote on establishing Uniswap Governance as DUNI demonstrated that the community is both capable and willing to mobilise for proposals with significant impact. This is a healthy sign for Uniswap governance overall, but it also highlights the importance of building a consistent base of regular voters who can support the many “ordinary operational” proposals that have underpinned the protocol’s growth over the years. Treasury delegation offers a practical way to achieve this.
We support UAC’s suggested path forward and, at the same time, echo @SEEDGov’s recommendation that adding objective eligibility requirements for delegate candidates is likely to provide better results. We believe it is fair to include objective requirements in the application as suggested, determining the baseline for qualification to the election. Clear criteria—such as the suggested 75% voting participation—help set a fair baseline and ensure reliability from those receiving delegated funds.
Thanks to @DonOfDAOs and the rest of the UAC for putting these ideas forward. As a disclaimer, 404 is one of the delegates currently participating in the active treasury delegation program.
After reviewing the options discussed and current feedback for governance improvements, treasury delegation appears to be the favored path. This is understandable, as the program has been battle-tested within the DAO and proven effective in meeting its core objective: attaining quorum.
Hey Jojo,
Thank you for the feedback!
Will there be an option to not choose any delegate in the list of options?
TD: If I'm understanding your question properly, this would be achieved by abstaining or not voting.
ScopeLift has voted against the delegation vaults proposal on Snapshot. There are two distinct reasons for this.
First, there’s not currently enough clarity on the technical implementation of what’s being proposed. I respect the work of Event Horizon, and to their credit, when I reached out to ask questions, they were extremely responsive and helpful. They open sourced the distribution contracts at my request, and are working to provide more information and documentation. I suspect that in short order, we can get to a point where we have the requisite transparency on the technical details, and therefore assess the technical soundness of the proposal.
Secondly, and separately, I’m not convinced that the tradeoffs around IDVs are the right ones for the DAO, and it’s not clear to me from the conversation in this thread that they were sufficiently weighed.
As one example of this, it’s generally framed as a benefit that the token holder does not have to do anything to receive rewards, such as registering or depositing the tokens in a staking contract. However, it’s not obvious to me this is a net benefit for the DAO. A token holder who claimed at the airdrop, delegated to a “big name” they recognized, and has never so much as thought about Uniswap DAO since then, will receive the same rewards (if there delegate has remained active) as someone who is regularly engaged with the community, voting on proposals and/or changing their delegation based on their delegate’s behavior. Is this definitely what the DAO wants? Would some proof of “liveness” be a beneficial feature?
There are several other points like this that could be discussed. I don’t mean to elucidate each one in this particular post, but simply to call attention to the fact that the pluses and minuses of IDVs seem under discussed.
I want to acknowledge that I’m guilty here of something that has frustrated me in other contexts: I missed this discussion completely in the forum, until very recently, and am hopping in to play catch up now that a vote is actually live. It’s very possible that a number of discussions of these kinds of tradeoffs were had in other contexts, like UAC calls, that I was unaware of. I think this fragmentation of effort—where various members of the DAO don’t know what others are doing—is a structural issue with decentralized governance, but I do still feel bad for contributing to this negative dynamic in this case. I also still feel obliged, now that I am aware of the proposal, to raise my concerns and vote according to the information I have available.
I also want to acknowledge that I don’t have a totally unbiased view. ScopeLift built the UniStaker contracts, which sought to incentivize delegation through the distribution of protocol fees rather than treasury tokens. While the context is different, the UniStaker contracts could still serve this purpose, and it’s not clear to me if they were considered, and if they were, why they weren’t chosen. I will point out that UniStaker is not a product of ScopeLift’s, but rather an open source codebase we were given a grant by the UF to write. We don’t stand to benefit directly from the adoption of UniStaker by the DAO, (though perhaps indirectly it would be redound to our benefit reputationally).
While I acknowledge I can’t claim to be totally unbiased when I ask “why isn’t the DAO using UniStaker for this purpose?”, I still think it’s a question worth asking, and to the extent it was discussed at some point, I would love to understand the answers.
So, to reiterate, ScopeLift is voting against the IDV proposal for two main reasons: a lack of technical clarity and a need for a better understanding of the tradeoffs around the mechanism chosen. It’s possible ScopeLift’s vote will change between now and an onchain proposal if these concerns are addressed.
Finally, I want to reiterate again that I respect the work Event Horizon has done here, and have total confidence they’ve acted in 100% good faith. My current skepticism about the proposal has nothing to do with my opinion of EH as a team—quite the opposite.
Thank you for structuring the two proposals!
We have separate feedback and comments for each of them:
In principle, we agree with this proposal, as we have repeatedly and in differetn postrs expressed our support for it. While we acknowledge that it may not be the ideal or definitive solution, we believe it is necessary given the current challenges the DAO faces in consistently reaching quorum for on-chain proposals.
That said, we have two suggestions to improve the proposal:
Cap per delegate. In addition to maintaining the 2.5M VP total cap (coming from the treasury or otherwise), we suggest that no delegate should receive more than 1M or 1.5M UNI through this program. This means that regardless of the VP each delegate already holds, no single delegate would be allocated more than this threshold, with the overall cap of 2.5M UNI per delegate remaining in place. This adjustment would ensure that treasury delegation is distributed more horizontally across more delegates, reducing the risk that only 4 or 5 delegates capture the entire 10M UNI delegation pool.
Selection method. We do not agree that delegates should be chosen by DAO voting. As we have pointed out on previous occasions, such a process risks becoming a popularity contest or incentivizing cartelization or collusion among delegates. This would contradict good governance practices and directly contravene the Uniswap DAO Principles (“Delegates must prevent the formation of cartels and ensure that the protocol is protected from any proposals driven by personal motives that do not align with the protocol’s best interests”). Instead, we believe that the ranking and selection among applying delegates should follow the same scoring methodology as the rewards program, which accounts for participation rates. This is a more objective and reliable way to prioritize delegates based on their actual engagement in the DAO and avoid the risk of assigning VP to popular delegates with low participation, which would conspire against the proposal's goal of increasing the voting VP.
We have previously stated our opposition to this proposal, and in addition to the reasons already provided, we would like to add further concerns based on the details now available:
Overlap with UVN - Trial Program. Unichain will soon launch UVN, which aims to attract and incentivize UNI tokenholders to become stakers and validators of the network. We believe this IDV system would directly compete with the official staking mechanism since both aim to attract UNI. When we raised this point, @donofdaos responded that Unichain’s launch may take time and, if this initiative proved redundant, the IDV could be deprecated once UVN is live:
While UVN is a promising step toward increasing delegation, its timeline remains uncertain, and several implementation details are still to be determined. More importantly, there’s no guarantee that UVN alone will be sufficient to restore quorum stability. In the meantime, DAO-led solutions are necessary. At worst, these initiatives become redundant and can be deprecated upon UVN’s launch; at best, they serve as critical infrastructure to support any delegation gap UVN may leave unaddressed.
However, the proposal currently presented includes a two-year implementation and budget. This is inconsistent with the response given, since while UVN’s timeline is uncertain, it is not expected to take two years or longer. If approved with a two-year scope, the IDV program will very likely become redundant and compete with UVN in attracting UNI. We are not comfortable with this, Unichain and UVN should have full priority and support from the DAO. We believe the proposal should be significantly reduced in both duration and budget, and instead designed as a 6-month pilot program, renewable every 6 months by DAO vote if proven successful, and only if it does not overlap with UVN once launched.
Potential Conflict of Interest. In reviewing this proposal, we want to raise a concern regarding the dual role of @donofdaos as both a member of the Uniswap Accountability Committee (UAC) and the founder of @eventhorizon, the entity proposed to develop and maintain the IDV. As described, the UAC would not only monitor implementation and evaluate deliverables, but also oversee the disbursement of funds related to this proposal. Given @donofdaos’s connection to @eventhorizon, this could place him in the challenging position of being both service provider and evaluator of the same work — for instance, participating in decisions on milestones, APR adjustments, or payment releases to the company he founded. We believe this situation raises important questions for the DAO:
The Uniswap DAO Principles note that “Severe conflicts of interest that could undermine the integrity of governance must be avoided.” and that “delegates should err on the side of transparency and openness.” In light of this, we respectfully suggest that the DAO consider whether additional safeguards (such as recusal from budget administration or milestone evaluation) would be appropriate if this proposal moves forward.
Our intention is not to question the good faith of any individual, but to ensure that Uniswap governance upholds the highest standards of impartiality, transparency, and accountability.
We are strongly in favour of treasury delegation. While we do not see this as a long-term solution, it is a necessary step to increase the voting supply to a level that allows ordinary proposals to reach quorum reliably. The recent vote on establishing Uniswap Governance as DUNI demonstrated that the community is both capable and willing to mobilise for proposals with significant impact. This is a healthy sign for Uniswap governance overall, but it also highlights the importance of building a consistent base of regular voters who can support the many “ordinary operational” proposals that have underpinned the protocol’s growth over the years. Treasury delegation offers a practical way to achieve this.
We support UAC’s suggested path forward and, at the same time, echo @SEEDGov’s recommendation that adding objective eligibility requirements for delegate candidates is likely to provide better results. We believe it is fair to include objective requirements in the application as suggested, determining the baseline for qualification to the election. Clear criteria—such as the suggested 75% voting participation—help set a fair baseline and ensure reliability from those receiving delegated funds.
On the IDV proposal, we view this as a more experimental but promising initiative. Running a 12-month pilot with @EventHorizon seems like a sensible way to test its effectiveness. In parallel, we believe initiatives such as DUNA and UVN could significantly strengthen Uniswap governance and participation in the medium term. Until then, an IDV pilot provides a valuable opportunity to drive results in the shorter term.
Thanks to @DonOfDAOs and the rest of the UAC for putting these ideas forward. As a disclaimer, 404 is one of the delegates currently participating in the active treasury delegation program.
After reviewing the options discussed and current feedback for governance improvements, treasury delegation appears to be the favored path. This is understandable, as the program has been battle-tested within the DAO and proven effective in meeting its core objective: attaining quorum.
That said, we should be mindful of the risks of continually increasing treasury delegation. While it is an important program for the DAO, in order to ensure that quorum is reached and governance can function smoothly, treasury delegation dilutes the governance power of actively participating token-holders. This may unintentionally disincentivize UNI holders from delegating or further engaging in governance.
We look forward to continuing the discussion around short to medium term solutions for governance operations.
Hey Jojo,
Thank you for the feedback!
Will there be an option to not choose any delegate in the list of options?
TD: If I'm understanding your question properly, this would be achieved by abstaining or not voting.
IDVs We fully intend for the program to evolve over time, whether through refining delegate credentialing, experimenting with alternative APR models, integrating with third-party solutions, or adopting any other adjustments the DAO prefers. We’ll maintain open lines for feedback (both in one-on-one conversations and during community calls) so that iteration is community-led.
The current v1 design prioritizes speed, simplicity, and general delegate agreeability in effort to solve the immediate quorum deficit; the systemically critical issue. A flat APR keeps flows simple, predictable, consistent with respect to emission per delegated UNI, and uniform across delegates. Introducing dynamic APR creates greater complexity in payment flows, inter-delegate dynamics and delegator behavior, which we believe is better suited for experimentation once the baseline program is live.
That said, some measures (such as caps) can be introduced with relatively little complexity, and we are open to exploring those adjustments sooner. Our general stance is to work with the DAO to launch the simplest, agreeable version to address the immediately critical issue.
To be clear I don't mean to discourage your ideation on end-state solutions. It is very valuable and highly encouraged. More so, my point is that we'd like to address the problem and then see these nuances deliberated in evolution of the program once live (hence our commitment to build and maintain). And, its worth noting, that we will likely benefit collectively from being able to leverage the live feedback loop as we iterate vs speculate/estimate the optimal structure pre-launch from an infinite set of possible structures.
Hello @bendi and @dennisonb , collectively, the staker team. I appreciate your acknowledging the conflict of interest.
That said, I am surprised that the landing point of your team is to work against a solution that resolves a systemically critical crisis the DAO is facing (a $200M quorum deficit) out of personal product preference and the conjuring of competitive analysis. I'm also a bit confused why this discussion materialized only after the community supported and aligned with IDVs through temp check, and not during the ~2 months of forum discussion and multiple community calls. Ultimately, that is your choice, but the health of the DAO is critical, and deepening entrenchment and delay don't serve the DAO or the community.
Hello @bendi and @dennisonb , collectively, the staker team. I appreciate your acknowledging the conflict of interest.
That said, I am surprised that the landing point of your team is to work against a solution that resolves a systemically critical crisis the DAO is facing (a $200M quorum deficit) out of personal product preference and the conjuring of competitive analysis. I'm also a bit confused why this discussion materialized only after the community supported and aligned with IDVs through temp check, and not during the ~2 months of forum discussion and multiple community calls. Ultimately, that is your choice, but the health of the DAO is critical, and deepening entrenchment and delay don't serve the DAO or the community.
To establish the landscape: The UF has made no public forward progress on Unistaker for over a year. I would imagine that they have their reasoning. In part, I would imagine, this is rooted in the added complexities, level of protocol integration, and regulatory consideration required for staker. Simultaneously, Tally has made no efforts to collaborate with the DAO directly except perhaps this message explicitly in response to IDV's direct DAO/community engagement.
In contrast, IDVs emerged from inception through direct communication with and voting of the DAO itself. The solution is intentionally lightweight, low-protocol commit/integration, and is designed to stop an acute issue.
The crux being, IDV's, a simple, DAO-supported, and most importantly, immediately viable solution, not predicated on hypothetical requirements, is likely the better tool for resolving the DAOs complete bottleneck it faces today than an intentionally shelved product, contingent on uncertain protocol decisions, operated outside the direct discussion of the DAO.
I would encourage the Tally team to recognize that IDVs in no way change the future of staker or the pre-existing blockers it faced (e.g. if it were viable, it would be live after over one year of effort, and if it becomes viable through UF, it still can be). But, we can help the DAO become functional today, and further extending a greater than year-long delay in preference of staker, at the expense of the DAO, is only at odds with serving the best interest of the DAO and community.
IDVs pay for passive delegation and require no proof of liveness, deliberation, or accountability.
This is untrue. IDVs are created for a select number of trusted, community-supported delegates with proven track records. Inclusion or exclusion, as well as all required metrics, are freely created or changed by the DAO and enforced by the UAC. In fact, several teams have already reached out and begun discussions about how they could support in the credentialing, reward distribution, and delegate metrics capturing, and participation enforcement portions of the program (these teams include Blockful, Curia, and Lighthouse). Should IDVs pass, these discussions will be hosted publicly, facilitated in community calls and forums. We see this as a multi-team, community-wide initiative. Tally is welcome to join the community in building this.
Beyond the above fact, that IDV recipients are beholden to valuable contributions. The DAO is $200m beneath quorum. If one truly considers the health of the DAO, quorum itself is far from a cosmetic issue.
Rewards scale with existing delegate size and longevity, creating a positive‑feedback loop that entrenches incumbents and incentivizes delegate blocs to coordinate.
As a first note, the idea that rewards 'entrench' delegates permanently is at odds with your latter statement that rewards lead to fickle, transient delegators. Either direct emissions lock delegators in (thereby durably increasing quorum) or they only support delegations so long as they are emitting (in which case adjustments to rewards, inclusion of new delegate IDVs, and changes made by the DAO and UAC would allow the DAO to granularly manage and distribute voting power). The former solves quorum with a single round, the latter allows for evolution of the program to give the DAO great power in ensuring productive and equitable distribution of VP.
IDVs are fully capable of including more delegates as they meet eligibility requirements. These requirements and potential for eligibility incentive quality contribution directly.
The DAO spends scarce runway without creating a durable capability, product, or asset.
It is our understanding that staker relies on protocol-level fee distribution which has not been confirmed yet. Should unistaker not receive distributable protocol fees, it does not function. IDVs rely on treasury emissions, which are both reasonably small and guaranteed to be available now, when the DAO urgently needs it, in particular.
Uniswap is already pursuing mechanisms to attract UNI (e.g., UVN). IDVs would compete head‑to‑head in an APY race for the same token, fragmenting strategy and forcing the DAO to outbid itself.
Unlike staker, and in our opinion superior to staker, IDVs are intentionally low-commit and directly managed by the UAC and DAO. While unistaker requires systemic commitment, difficult unwind, and higher effort change and interaction, the IDV program can address quorum today, be guided manually and directly by the DAO, and begin to sunset the very day UVN launches (should the DAO prefer this route to potentially synergistic approaches). This has already been addressed, though. I have full faith in the collective intelligence of the DAO to find a solution, quite possibly sunset, that does not bid against itself.
We should probably opt to pick one lever, not subsidize competing ones, or even wait a bit to see what happens with the A16z delegations and the Fee Switch (which might naturally bring in a new cohort of participants)
Should the community decide that lever to be IDVs, I would hope the Tally team would not begrudge the decision. To reiterate, halting solution progress for the DAO on the basis of hypotheticals suitable for staker, is strictly worse for the DAO.
Ultimately, this is not to say that there isn't a future implementation of staker possible. Uniswap Foundation may decide it is viable at a later date. At that point, the IDV program, again, is in the full and manual control of the DAO, and can be sunset or synergized as deemed fit, similarly to considerations around UVN.
Appreciate the update @DonOfDAOs and glad to see the treasury delegation proposal being stewarded forward by the UAC. Will there be an option to not choose any delegate in the list of options?
The IDV proposal does not clarify its stance on VP concentration amongst top delegates. We have seen tally’s impementation of staking rewards lead to heavy centralisation in other DAOs eg: rari, obol Since this is a concern cited by the UAC in its research and there is a suggestion to cap max delegation at 2.5M in the treasury delegation proposal, it would be helpful to have some parameters in the IDV proposal as well. It would be great if the IDV framework targets a ‘max’ delegation for each delegate and dynamically adjusts the APR based on how ‘far’ any given delegate is from that ‘max’ value, eg: delegators to delegates with 500K VP receive more APR than delegators to delegates with 1M or 2M VP etc…
Appreciate the update @DonOfDAOs and glad to see the treasury delegation proposal being stewarded forward by the UAC. Will there be an option to not choose any delegate in the list of options?
The IDV proposal does not clarify its stance on VP concentration amongst top delegates. We have seen tally’s impementation of staking rewards lead to heavy centralisation in other DAOs eg: rari, obol Since this is a concern cited by the UAC in its research and there is a suggestion to cap max delegation at 2.5M in the treasury delegation proposal, it would be helpful to have some parameters in the IDV proposal as well. It would be great if the IDV framework targets a ‘max’ delegation for each delegate and dynamically adjusts the APR based on how ‘far’ any given delegate is from that ‘max’ value, eg: delegators to delegates with 500K VP receive more APR than delegators to delegates with 1M or 2M VP etc…
Another helpful tip for the token holder is to delegate to a custom vault which auto balances delegations between delegates to maximize APR for the token holder.
It’s important to understand how much of the observed decline can be explained by broader, industry-wide reductions in DAO activity.
It’s important to understand how much of the observed decline can be explained by broader, industry-wide reductions in DAO activity.
As @kfx rightly pointed out, it's essential to consider how much of the decline in participation reflects broader industry-wide trends in DAO engagement.
While we don’t have formal research to cite at the moment, based on our experience and kpk’s active involvement across multiple DeFi DAOs, we believe this drop in voting participation is an industry-wide issue rather than something unique to Uniswap.
For instance, even Arbitrum DAO, one of the most active DAOs in the space, recently struggled to reach quorum on constitutional proposals. Similarly, DAOs like Gnosis, Aave, and Lido have dedicated initiatives to drive engagement and improve participation across their communities.
Atis, thank you for joining the conversation.
To be clear, I do support continuing with treasury delegation at least until the Unistaker goes live. However, I would not support increasing it to a level that would, on its own, fully compensate for the retracted 20M.
Atis, thank you for joining the conversation.
To be clear, I do support continuing with treasury delegation at least until the Unistaker goes live. However, I would not support increasing it to a level that would, on its own, fully compensate for the retracted 20M.
Clarification: The round 2 treasury delegation, as it's currently structured, adds 10M new delegations in addition to the existing 10M. This would bring the total treasury delegations to 20M and would close 10M of the 20M quorum gap.
Question: What is an amount that you feel is ideal in total terms (round 1 [10M] + round 2)?
Next Steps: Your general support for treasury delegations has been noted.
It’s important to understand how much of the observed decline can be explained by broader, industry-wide reductions in DAO activity. For example, one approach could be to fit a linear regression model that includes an “industry-average trend” as an explanatory variable.
According to the summary at the end, the Community Proposal Factory (CPF) appears to be the preferred option.
Ultimately, it will likely take a combination of solutions, which, based upon community decision, may or may not include CPF.
The systemic fix here would be to associate yield on UNI tokens with the condition of delegating to active governance participants.
In discussing proposed solutions, the UAC's goal is not to advocate or oppose, but to offer counterfactuals, steelman arguments, and constructive counterpoints as needed, not to establish formal positions, but to facilitate deeper dialogue and holistic evaluation. Simultaneously, we approach this with care, aiming to represent the community-sourced solutions entrusted to us by builders in good faith.
In discussing proposed solutions, the UAC's goal is not to advocate or oppose, but to offer counterfactuals, steelman arguments, and constructive counterpoints as needed, not to establish formal positions, but to facilitate deeper dialogue and holistic evaluation. Simultaneously, we approach this with care, aiming to represent the community-sourced solutions entrusted to us by builders in good faith.
Firstly, we would like to thank the UAC members for this post. Several delegates, including ourselves, have been warning for months about the quorum situation in the DAO, the risk of paralysis it faces and the need to find solutions.
it is common practice to coordinate with high-VP holders to publish them. Therefore, we do not see a need for this change.
Clarification: CPF is intended for Future Proofing. My understanding, however, is that CPF provides future proofing. While identifying delegates and securing champions is standard practice, it increasingly becomes a bottleneck (particularly at scale) and adds pressure to a shrinking pool of active high-VP participants.
We also disagree with the 10M delegation boost from the CPF smart contract. This is effectively a 25% onchain quorum reduction (from 40M to 30M), increasing governance risk by making it significantly easier for a malicious actor to reach quorum.
Counterfactual: CPF Still Requires Majority Agreement. While concerns about reduced quorum thresholds are valid, it’s important to note that CPF proposals still operate under the standard referendum process both at the sub and main DAO level. Should the broader DAO dislike or identify a proposal as malicious, the majority community vote would still block the proposal within the CPF from reaching the main DAO. And, should it reach the main DAO, further majority support would be necessary.
Feedback-Derived Improvement -- CPF Votes Abstain: A possible configuration that @SEEDGov 's perspective does bring about is to ensure the CPF votes ABSTAIN, rather than FOR. In this regard, the system further relies on standard consensus.
We do not support this approach that incentivizes V.P. delegation through UNI emissions or treasury allocations. Like with TVL-based incentives for liquidity pools, this approach creates unsustainable behaviors: tokenholders delegate while incentives are high, and withdraw when they’re gone, leaving governance participation dependent on continuous spending.
Counterfactual: Delegations tend to be sticky.
While concerns about sustainability are valid, the behavioral dynamics of delegation suggest that incentives don’t necessarily lead to short-term, extractive activity, but are in fact rather sticky.
Incentives typically prompt users to delegate in the first place, an action that requires effort, but there’s no comparable incentive to undelegate. In fact, there’s a disincentive to undelegate: users may fear missing out on future emissions or having to repeat the delegation process later.
We can observe similar dynamics in airdrop-based delegation models. For example, Scroll’s airdrop initiated delegation at token launch. Delegations didn’t unwind through active undelegation, but instead, they tapered off only when users sold their assets. While wallet assets may vacillate delegated status tend to persist.
Conversely, DAOs regularly face problems around high-stickiness, not low. This is seen through ghost delegates; accounts that retain large voting power despite long-term inactivity. In Aave, for instance, only ~7 of the top 100 delegates have voted in the past year, yet very few delegators have undelegated or re-delegated, underscoring the inertia built into delegation behavior.
Finally, this “stickiness” is reflected in the high failure rate of redelegation campaigns. Once a wallet is delegated, it tends to stay that way, even when campaigns try to dislodge it.
In effect, delegation is often a set-and-forget decision, and the risk of mass undelegation following incentive tapering is likely overstated.
Clarification: UVN is a promising solution, but holds a variable timeline and impact.
While UVN is a promising step toward increasing delegation, its timeline remains uncertain, and several implementation details are still to be determined. More importantly, there’s no guarantee that UVN alone will be sufficient to restore quorum stability. In the meantime, DAO-led solutions are necessary. At worst, these initiatives become redundant and can be deprecated upon UVN’s launch; at best, they serve as critical infrastructure to support any delegation gap UVN may leave unaddressed.
Counterfactual: Validators are not always governance-aligned. It’s also worth noting that validator incentives may not directly translate to responsible governance engagement. Validators often operate with a different focus and skillset from active governance participants, and many may not have the interest or ability, to engage meaningfully in DAO decision-making. It also remains to be seen whether UVN will allow for re-delegation to more involved actors while staked.
Incentivized Delegation Vaults (IDVs) would directly compete with official staking, which we believe is counterproductive.
This is a suboptimal solution, as the ideal scenario would involve aligning incentives with tokenholders so they participate directly or by delegating their voting power. Given the DAO’s current situation, another valid option would be for the UAC and Foundation to actively reach out to institutional tokenholders—such as a16z in the past—and encourage them to delegate to a curated group of delegates (potentially the same group that would receive the treasury delegation).
The UAC is actively engaging with both the UF and a16z to help stabilize quorum in the short term. That said, reliance on external coordination, however effective immediately, will always leave the DAO vulnerable to similar risks in the future. Our goal is not only to address the immediate quorum gap, but to help the DAO build a more durable, internally sustained quorum margin over time.
While we support this approach as a voting system that we understand to be positive in certain cases, it remains unclear to us which proposals would fall under this category and which should continue using the traditional voting system.
Feedback-Derived Improvement: Clarity around when Optimistic Governance is used. Establishing clearer guidelines for when Optimistic Governance should be used is a valuable suggestion. While it could, in theory, be left to the proposal author to choose the path at the time of posting, broader consensus on the criteria and process would help.
Moreover, this system also does not solve the root problem. It may help with routine, whitelisted proposals and proposers, but doesn’t impact more strategic or high-stakes proposals, which are the ones struggling to reach quorum.
Counterfactual: Optmistic Governance indirectly addresses quorum and directly addresses other concerns.
SEEDGov is correct that Optimistic Governance does not address quorum challenges for high-impact or contentious proposals (nor for proposals that establish the OG framework itself).
However, the core value of OG lies elsewhere: today, every proposal (regardless of scope) is treated as if it were high-stakes, requiring full quorum and maximum attention. By enabling procedural or low-risk proposals to move through a more efficient path, OG helps declutter governance, reduce voter fatigue, and free up attention for the proposals that do merit more intensive participation.
OG does not directly address quorum, though it does indirectly. And, it's important to note that quorum is the main, but not the only issue/improvement necessary.
Thank you FranklinDAO for joining the conversation and for the thorough analysis.
Counterfactual: The CPF is a separate, optional track to the primary governance flow. Given the CPF is a separate track there shouldn't be necessary delays. All delays would be accepted by the proposer as a trade-off. There is nothing preventing proposal authors from seeking a sponsor and pursuing the standard proposal path
Feedback Derived Improvement: standardizing CPF proposal requirements could drive higher quality. Creating a required format and template structure for 'valid' CPF proposals could address some of the valid concerns FranklinDAO has raised regarding proposal quality.
Personal Note: I, as an individual, find this approach novel and interesting. I find the incentive to delegate compelling alignment. I would worry that this, if not structured properly, could exaggerate the burden to champion that delegates face. However, I'd be open to scoping this solution out with you more broadly as a potential solution for this or future UAC posts.
Since increased participation doesn’t automatically improve governance quality or efficiency, it’s important to ask how does broader participation actually enhance DAO decision-making beyond attack resistance?
Next Steps: Your conditional support has been noted. Should additional support across the DAO continue, full scoping of the unit economics of IDVs will be shared.
Regarding governance quality, IDVs would incentivize delegation to a selected subset of community-selected, high-quality delegates. The selection process would also be concretized should the broader idea continue to receive full or conditional support.
Specific Recommendations:
Your support of TDs has been noted. Could you please:
Regarding selection itself, a formal set of nomination eligibility criteria will be suggested should TDs continue to grow full or conditional support.
Next Steps: This configuration suggestion has been noted and will be added to the next status summary the UAC provides.
Thank you @kpk , @SEEDGov and @pennblockchain for joining the conversation. Its a systemically important issue for the DAO and your participation is greatly appreciated.
I have reviewed the information and have the following comments:
1. Overall position: I agree that difficulty to reach quorum is a real problem, but at the moment I do not strongly support either of the proposed solutions. I'm reserving judgment depending on how the discussion evolves.
I have reviewed the information and have the following comments:
1. Overall position: I agree that difficulty to reach quorum is a real problem, but at the moment I do not strongly support either of the proposed solutions. I'm reserving judgment depending on how the discussion evolves.
To be clear, I do support continuing with treasury delegation at least until the Unistaker goes live. However, I would not support increasing it to a level that would, on its own, fully compensate for the retracted 20M.
2. Analysis of voting trends over time: It’s important to understand how much of the observed decline can be explained by broader, industry-wide reductions in DAO activity. For example, one approach could be to fit a linear regression model that includes an “industry-average trend” as an explanatory variable.
Another idea is to use a two-phase model: initial decline followed by later stabilization. Right now, there isn't enough evidence to conclusively favor this over a linear fit. I checked that the two-phase model produces a lower error (RMSE), but the difference doesn’t clearly justify the added complexity (Occam's razor is in favor of simpler models - too many parameters lead to overfitting).
3. Clarification on CPF According to the summary at the end, the Community Proposal Factory (CPF) appears to be the preferred option. However, I’m struggling to see how it would help with achieving quorum. Can you clarify? Is the idea that the 10M votes delegated to the CPF would actively participate in voting?
Edit: after reading DonOfDAOS's latest response, I see that this has already been addressed and that the CPF will vote "Abstain", consequently it won't help the quorum.
It seems unlikely that a proposal which cannot find a sponsor willing to post it or sub-delegate votes would have enough traction to pass quorum—especially since meeting quorum is a much bigger challenge than simply submitting a proposal.
4. "Bandaids" vs. a more stable solution It’s frankly not a good look that a single actor (a16z) can once again demonstrate how much Uniswap governance depends on their goodwill.
The systemic fix here would be to associate yield on UNI tokens with the condition of delegating to active governance participants.
FranklinDAO appreciates the UAC's careful analysis of the governance challenges facing Uniswap. After careful consideration of the proposed solutions, our team believes that the DAO should prioritize governance quality and proven mechanisms over experimental approaches that may introduce new risks.
FranklinDAO appreciates the UAC's careful analysis of the governance challenges facing Uniswap. After careful consideration of the proposed solutions, our team believes that the DAO should prioritize governance quality and proven mechanisms over experimental approaches that may introduce new risks.
Support: Expanded Treasury Delegations as the most effective near-term solution Conditional Support: Optimisic Governance for specific use-cases and decision flows Oppose: Community Proposal Factory and Quorum Reduction Neutral: Incentivized Delegation Vaults (pending cost-benefit analysis)
Before addressing specific proposals, FranklinDAO it's important to establish clear criteria for evaluating governance improvements. We think any changes should be assessed across three dimensions.
Efficiency: Speed & cost of decision-making processes Robustness: Resistance to governance attacks, rent-seeking, and system failures Quality: Likelihood of producing well-informed and beneficial outcomes for the DAO
These dimensions often involve tradeoffs, and our analysis prioritizes solutions that optimize across all three rather than maximize any single metric.
Community Proposal Factory (CPF) - Opposed
We're opposed to @GFXlabs's CPF solution for several fundamental reasons. First, quality considerations. The Uniswap ecosystem's complexity requires an understanding of technical, tokenomics, and legal ramifications. Grassroots proposals usually come from participants with limited governance involvement. Thus, they're unlikely to put forward proposals that advance the protocol's interests without consuming substantial attention and resources.
Efficiency Questions: The CPF introduces additional governance layers and potential delays. If most grassroots proposals lack the depth required for implementation, the CPF becomes a mechanism that consumes delegate attention without proportional value creation.
Instead, FranklinDAO recommends an alternative by building on the current forum-based systems:
This creates a representative-constituent model that provides screening and mentorship, incentivizes delegation to active gov participants, and maintains quality control without complex new infrastructure.
Incentivized Delegation Vaults (IDVs) - Neutral Pending Analysis
The fundamental challenge isn't just moving tokens off exchanges, it's creating sustained engagement. Even with incentives, retail participants delegate infrequently and remain largely uninformed about gov decisions. We believe that IDVs lack specific cost projections for the marginal increase in voting supply per unit of incentives. Given UNI's lack of native yield, even modest incentives might drive participations, but maybe not.
FranklinDAO would like a realistic analysis of:
Since increased participation doesn't automatically improve governance quality or efficiency, it's important to ask how does broader participation actually enhance DAO decision-making beyond attack resistance?
FranklinDAO offers conditional support to IDVs if comprehensive cost-benefit analysis shows reasonable acquisition cost for delegated tokens, clear metrics for success are established, and the program includes sunset provisions to build-in clear evaluation windows.
Treasury Delegations - Strong Support
Treasury delegations represent the most proven mechanism for addressing quorum challenges while maintaining governance quality. Kudos to @Doo_StableLab for pushing the initiative.
Specific Recommendations:
We believe that treasury delegations are the most straightforward path to meeting quorum reliably. It has further benefits of allocating voting power to proven governance participants, creates a buffer against single-entity delegation withdrawals, and has minimal ongoing operational costs.
Quorum Reduction - Opposed
FranklinDAO is strongly opposed to quorum reduction at this time. Lowering quorum is a short-term solution to a long-term problem facing every DAO, regardless of whether Uniswap's participation threshold is higher or lower than other DAOs. Lowering the economic barrier for governance decisions increases attack vectors, which are particularly problematic given that some actors control 30M+ UNI and that some on-chain decisions are irreversible.
Alternative Path: Rather than reducing quorum, the DAO should focus on sustainable participation through treasury delegations and targeted retail engagement. Quorum adjustment might be warranted after implementing other solutions and observing their effects over 12-18 months.
Optimistic Governance - Conditional Support
Optimistic governance offers efficiency gains for specific categories of decisions:
Implementation Concerns:
Veto Threshold Critical: The proposed 1-2M UNI threshold appears too low, potentially enabling griefing attacks by a single delegate. We recommend a higher threshold of 5-8M for meaningful veto protection. This threshold should correspond to requiring roughly 3/15 top delegates to veto a proposal.
Scope Limitations: Optimistic governance should explicitly exclude treasury allocations/budgets above defined thresholds or legal/regulatory decisions with broad implications.
We'd appreciate a deeper analysis of which flows should first roll out optimistic decision-making and what guardrails should exist to prevent exploitation.
The UAC has identified genuine challenges facing the DAO. FranklinDAO believes that the path forward should prioritize proven mechanisms and incremental improvement over experimental systems that introduce new risks. As such, we believe that strengthening the existing treasury delegations, enhancing current infrastructure through expanding the use of forums, and a phased roll-out of optimistic governance is the right path forward.
This strategy addresses immediate quorum challenges while maintaining the security and quality standards essential for governing Uniswap. We look forward to continued dialogue between the community and the UAC and stand ready to support proposals that advance these principles.
We appreciate the effort by the UAC team for delivering such a thorough and well-structured analysis. This post does an excellent job of surfacing the critical issues facing Uniswap governance and framing a path toward constructive solutions.
From my perspective, the situation is clear: our governance is structurally precarious. Quorum margins are near historic lows, and our ability to pass proposals increasingly depends on the consistent participation of a very small group of delegates. This over-reliance creates a systemic risk where the the abstention of just one or two key actors can stall the entire governance process.
We appreciate the effort by the UAC team for delivering such a thorough and well-structured analysis. This post does an excellent job of surfacing the critical issues facing Uniswap governance and framing a path toward constructive solutions.
From my perspective, the situation is clear: our governance is structurally precarious. Quorum margins are near historic lows, and our ability to pass proposals increasingly depends on the consistent participation of a very small group of delegates. This over-reliance creates a systemic risk where the the abstention of just one or two key actors can stall the entire governance process.
The quorum vulnerability we observe is not the root problem but a symptom of two underlying factors:
1. Low participation among delegates
Inactive or “ghost” delegates – A number of delegates hold significant voting power but fail to participate, rendering that power dormant.
Delegators delegating to inactive delegates – Tokenholders compound this issue by delegating to these inactive accounts, effectively sidelined their own voting power.
2. Undelegated tokens
Institutional undelegation events – cases like a16z where large-scale undelegations from funds or institutions for asset transfer or exit positions, which abruptly reduce votable supply.
Dormant Undelegated UNI – wallets that hold UNI but have never delegated, leaving this portion of the supply inactive in governance.
I also agree with @1a35e1’s observation that the problem is not the total delegated UNI (~193M), but rather the inactivity of much of this delegated power. While this latent voting power leaves governance vulnerable to decision paralysis, it also represents a profound opportunity if reactivated.
Thus, the ultimate goal should be to increase meaningful governance participation across two critical dimensions:
Votable Supply – increasing the amount of delegated UNI by encouraging delegation from holders and mitigating risks from large-scale undelegations (e.g., institutional actors like a16z) through proactive outreach.
Delegate Activity – improving how delegated voting power is utilized by:
Ensuring delegates who receive voting power actively participate in governance.
Guiding delegators to delegate to active participants rather than ghost or inactive delegates.
I share the view that CPF does not directly address the quorum issue. While it may improve accessibility and inclusivity, there is little evidence that delegates with small voting power currently face difficulty pushing proposals, as coordination with larger holders is already a functional pathway.
Moreover, CPF comes with structural complexity and implementation costs that may not be justified at Uniswap’s current scale. A key concern is the security risk tied to its design:
The CPF contract would hold a standing 10M UNI delegation to push proposals to the main DAO.
This effectively lowers the quorum for CPF-originated proposals from 40M to 30M UNI, reducing the cost for reaching quorum.
If misconfigured, this could make it significantly easier for a malicious actor to exploit the process and pass harmful proposals.
Rationale: CPF is not a priority for addressing the current quorum and participation issues. However, it could still be tested as an experimental tool to enhance proposal diversity, provided the DAO agrees on strict safeguards and clear cost-benefit justification.
I strongly support this solution. IDVs directly incentivize delegators, targeting both:
New UNI holders who have not delegated yet, and
Existing delegators who are currently delegating to inactive or “ghost” delegates.
This strategy aligns well with the goal of activating dormant voting power. We are keen to contribute to the discussions on defining “active delegates” to ensure the program 's effectiveness similar to our works within Obol collective.
Regarding the concern from SeedGov that IDVs may overlap with UVN. I agree with @DonOfDAOS’s clarification. While UVN is promising, its timeline is uncertain and its impact is not guaranteed to fully address quorum issue. It may be prudent, therefore, to concurrently explore DAO-led solutions like IDVs. Such initiatives could serve as valuable complements to UVN, addressing any delegation gaps it might leave unaddressed, and could be phased out if UVN proves to be a comprehensive solution on its own.
I support TDR2 as a necessary short-term measure to improve the quorum issue. However, it should be treated as a temporary bridge, not a permanent solution.
To maximize its impact while avoiding governance centralization, its implementation would ideally involve:
Paired with Healthy Delegation Margin (HDM) tracking to evaluate whether it actually improves participation.
Distributed carefully to avoid further concentrating voting power among existing large delegates.
I also echo SeedGov’s point that active outreach to institutional tokenholders—such as previous efforts with a16z—should be pursued alongside TDR2. Encouraging these investors to delegate to a curated set of active delegates would greatly strengthen quorum issue while keeping voting power in engaged, responsible hands.
I do not support quorum reduction. Lowering the quorum threshold increases unnecessary security risks while failing to address the root cause of the problem (low participation and undelegated tokens).
Since there are alternative solutions with less risk and more alignment with improving delegate engagement, this should not be pursued.
I also do not see Optimistic Governance as a solution to our current quorum problem.
It may improve efficiency for routine proposals, but it does not impact participation in high-stakes votes—the ones most at risk.
If implemented, we should clearly define which proposal types fall under this model to avoid confusion or misuse.
Like CPF, it is not a priority but could be tested as an experimental process improvement.
Another solution worth exploring is Dynamic Quorum, where the threshold is not a fixed number but can adjust over time. While the implementation details would require careful research,one potential design could involve adjusting the thresholds based on metrics like recent delegate activity. The primary benefit would be ensuring our quorum requirement remains realistic and connected to the actual state of governance activity.
Based on the analysis above, my current position on each solution is as follows:
✅ Treasury Delegation Expansion (TDR2): Support as a necessary short-term measure, with HDM tracking, careful distribution, and active outreach to institutional tokenholders to strengthen governance without over-centralization.
✅ Incentivized Delegation Vaults (IDVs): Support, as they directly activate dormant voting power and align incentives, with the understanding that they complement rather than conflict with UVN.
❌ Quorum Alteration: Do not support, as it introduces risk while failing to address the root cause.
⚪ Community Proposal Factory (CPF): Not a priority for solving the current problem, but could be tested under strict safeguards as an experimental tool for proposal diversity.
⚪ Optimistic Governance: Not a priority for addressing quorum, but may be valuable as a process improvement if scope is clearly defined.
🔍 Dynamic Quorum: Recommend research to explore its feasibility as a long-term, adaptive governance mechanism.
These are my initial thoughts on the path forward.I look forward to continuing this discussion and incorporate perspectives from other delegates as we work toward a solution that ensures Uniswap governance remains resilient and decentralized.
Hello!
Firstly, we would like to thank the UAC members for this post. Several delegates, including ourselves, have been warning for months about the quorum situation in the DAO, the risk of paralysis it faces and the need to find solutions.
We have some comments to make about the proposed alternatives in the post itself.
Hello!
Firstly, we would like to thank the UAC members for this post. Several delegates, including ourselves, have been warning for months about the quorum situation in the DAO, the risk of paralysis it faces and the need to find solutions.
We have some comments to make about the proposed alternatives in the post itself.
This system didn’t address the DAO's current main issue: onchain quorum. Lowering the proposal threshold to 1M UNI doesn’t solve the actual problem, as posting proposals has not been a bottleneck — it is common practice to coordinate with high-VP holders to publish them. Therefore, we do not see a need for this change.
Moreover, this proposed solution introduces an additional layer of complexity that is not justified given the current scale and activity level of the DAO. While such a mechanism might make sense in a larger DAO with a broader scope—where specialized sub-DAOs or expert groups could curate proposals—this is not the case in Uniswap DAO. If the main discussion space remains the forum, and no modifications can be made between Snapshot and on-chain execution, the added structure risks becoming counterproductive rather than helpful.
We also disagree with the 10M delegation boost from the CPF smart contract. This is effectively a 25% onchain quorum reduction (from 40M to 30M), increasing governance risk by making it significantly easier for a malicious actor to reach quorum.
We do not support this approach that incentivizes V.P. delegation through UNI emissions or treasury allocations. Like with TVL-based incentives for liquidity pools, this approach creates unsustainable behaviors: tokenholders delegate while incentives are high, and withdraw when they’re gone, leaving governance participation dependent on continuous spending.
Also and more important, this system would compete against the soon-to-be-launched Unichain Validation Network (UVN) whereby tokenholders will be compensated for staking UNI to validate the network. We do not believe that another incentive system for parallel and external staking should be created to compete against the official UVN.
This is a suboptimal solution, as the ideal scenario would involve aligning incentives with tokenholders so they participate directly or by delegating their voting power. Given the DAO’s current situation, another valid option would be for the UAC and Foundation to actively reach out to institutional tokenholders—such as a16z in the past—and encourage them to delegate to a curated group of delegates (potentially the same group that would receive the treasury delegation).
However, considering that outreach efforts to institutional tokenholders have shown limited results in other DAOs (e.g., Lido), treasury delegation emerges as a viable and pragmatic alternative. In this context, we reaffirm our support for @Tane’s proposals and continue to believe this is the most effective and low-risk solution at this specific time. It organically increases voting power by delegating to high-performing delegates, ensuring that the voting power is in active and responsible hands.
Key advantages:
It is flexible, safe, and efficient.
We oppose this proposal. While lowering quorum may appear to be a quick fix, it introduces serious risks by reducing the barrier to a governance attack.
If the UNI price drops, this risk increases. Additionally, changing the quorum requires smart contract changes, adding further complexity and potential points of failure.
While we support this approach as a voting system that we understand to be positive in certain cases, it remains unclear to us which proposals would fall under this category and which should continue using the traditional voting system.
Moreover, this system also does not solve the root problem. It may help with routine, whitelisted proposals and proposers, but doesn’t impact more strategic or high-stakes proposals, which are the ones struggling to reach quorum.
Given the DAO's current quorum problem, non-routine and important votes will continue to be at risk of paralysis. Although the optimistic governance system was designed to handle low-risk routine and procedurally proposals, it was not intended to address the issue of difficulty in achieving a quorum. Solutions should not be found in tools that were not designed to address these particular problems.
It’s crucial to consider that Unichain is launching the Unichain Validation Network (UVN), which will offer official staking rewards for UNI holders to validate the network. This initiative will likely increase UNI holder engagement within the Uniswap ecosystem.
In this context:
We firmly believe that Treasury Delegation remains the best short-term solution. It provides safety, zero cost, and strategic flexibility while we await UVN's rollout that will encourage large holders to mobilise their funds for staking, which presents a unique opportunity to onboard these large UNI holders into governance through direct participation or delegation. We believe that this is where efforts should be focused.
Thanks for compiling this thoughtful and in-depth analysis of the current governance challenges and potential paths forward.
Thanks for compiling this thoughtful and in-depth analysis of the current governance challenges and potential paths forward.
One way to highlight this trend is by tracking the quorum margin, defined as the percentage by which total votes exceeded the 40M quorum threshold. This metric offers a clear view of the DAO’s diminishing participation over time. Note that the current state of margin, 11.80% or 4.72M UNI (44.72M Total), is well below other DAOs and increasingly alarming.
We agree that the quorum issue is the most pressing and relevant challenge at the moment. As you highlighted, the current proposal margin of just 11.8% is quite concerning, and we believe raising this number should be the top short-term priority for the DAO.
While we’re confident that long-term initiatives like Unistaker and possibly UVN will play a key role in addressing this challenge, we also recognise that these solutions may take time to materialise fully. In the meantime, identifying a solid mid-term strategy makes great sense. In that context, treasury delegation and quorum alteration strike us as the most direct and actionable levers to pull.
The potential of IDVs and Optimistic Governance is promising, though likely more suitable for long-term experimentation and refinement.
That said, we do think it's important to approach quorum reduction with caution. Lowering quorum thresholds could increase the risk of governance attacks—especially considering the size of the Uniswap treasury. While the dollar value of the quorum currently sits at $280M, the DAO treasury is valued at $3.9 Billion. A higher quorum helps protect against that.
We fully agree with the UAC's assessment that the costs currently outweigh the potential benefits of a quorum alteration.
In contrast, treasury delegation provides a way to increase the proposal margin by empowering trusted parties, without broadly opening treasury access. It seems like a reasonable temporary solution that balances efficiency and security.
Because this analysis is broad and touches on various challenges and potential solutions—each with varying degrees of innovation, experimentation, and implementation timelines—we suggest a step-by-step approach. This would start with tackling the most urgent issues through feasible, direct actions, followed by a deeper evaluation and rollout of longer-term initiatives that could meaningfully strengthen the DAO's governance over time.
Appreciate the effort that went into this post, and looking to support pragmatic improvements.
Thank you for this thoughtful post. I agree with several delegates that the quorum issue is the most pressing at the moment and reducing quorum threshold will add more risk to the equation. I appreciate the solutions such as IDV and CPF. If incentivized correctly these offer promising solutions, but due to lack of data I am hesitant about going full speed on these just yet. We could run small experiments in the coming months to see how they perform and I’d be highly supportive of such experiments.
Treasury delegations seem to be the most optimal short term solution given the constrains presented in this post. I am supportive of the 10M threshold suggested in this post as well as a 2.5M cap. However, I would like to see delegations going to all delegates who have shown active participation in the past 1 year, as opposed to selecting a few delegates from all eligible delegates. In the past a fixed amount was suggested to be allocated to each delegate which resulted in having to select a few delegates. I believe this is the wrong approach since it evenly distributes VP amongst delegates with uneven performance. I’d rather like to see a proportional allocation based on performance which includes a broad set of active delegates.
continuation
At the time of write, with a token price of ~$6.50, Uniswap maintains the highest quorum dollar value of any DAO at ~$280,000,000. This is notably higher than even the most significant DAOs in the space.
continuation
At the time of write, with a token price of ~$6.50, Uniswap maintains the highest quorum dollar value of any DAO at ~$280,000,000. This is notably higher than even the most significant DAOs in the space.
| DAO | Quorum | % of Circ. Supply | Relevance |
|---|---|---|---|
| Uniswap | $284,800,000.00 | 6.66% | |
| Uniswap (adjusted) | $171,017,579.19 | 4.00% | Potential Alternative |
| AAVE | $167,520,600.00 | 4.25% | Highest TVL |
| Arbitrum | $62,000,000.00 | 4.03% | Largest L2 |
| LIDO | $32,290,570.15 | 5.00% | Systemic Importance |
| Optimism | $19,250,000.00 | 2.00% | Parent Chain |
| ENS | $18,640,000.00 | 3.02% | 3rd Largest Treasury |
Currently, Uniswap’s quorum dollar value is:
This makes the question of “why?” worthwhile for us to consider as a DAO. While the UAC does not currently take a position on the matter, it is essential that we, as a community, regularly question and review our assumptions. Is a $280M quorum threshold truly necessary, or even optimal?
Important Feasibility Note: Although the DAO has had some discussions in the past around both increasing and decreasing quorum, our present stance is that there should be no change to quorum as the costs outweigh the potential benefits. First, quorum changes aren’t as simple as changing the proposal threshold. More development work is required to make such alterations. Plus, quorum changes are far less trivial than proposal threshold updates since quorum represents the economic barrier to finalizing on-chain decisions, and altering it can have unintended consequences for protocol security.
Important Security Note: Lowering quorum may increase proposal throughput, but it also reduces the cost of malicious actions, especially in a protocol with a large treasury. And, if the Uniswap treasury increases in diversity, away from the native UNI token, the appeal of an attack increases. Thus, while lower quorum may seem attractive from a governance participation standpoint in the short-term, such a move should be considerate of the current and future state of the treasury.
Large actor considerations: It's important to weigh the above with the knowledge that some large actors such as a16z maintain token balances in excess of 30M UNI. Two example perspectives to take from this are:
or...
Influence on Actors:
Circulating Supply Beyond dollar value, another fairly common way to consider quorum is relative to token count through percent of circulating supply. At present, Uniswap’s quorum stands at ~6.66% of the circulating supply. This is ~50% higher than the average of the collection of DAOs mentioned and is generally quite high relative to the DAO space broadly.
If as an example alternative, Uniswap were to conform more closely to an industry standard ratio of 4% of circulating supply (adjusted), quorum would drop to ~24M UNI or $171,017,579.19.
At this adjusted level, nearly every historic proposal would have achieved or nearly achieved quorum, even without a16z delegations as visualized above. This does assume that 10M in treasury delegations persist.
Note on State of Circulating Supply: Unlike some other DAOs, where quorum may be in flux, altering based on the supply of the native token, Uniswap’s is fixed. Arbitrum DAO recently lowered its quorum threshold as a result of low voting participation, but that was in part due to the increasing bar for reaching quorum. A fixed threshold allows for more predictability.
Summary: Token governance is valuable, but the current process of requiring full community mobilization for every single change or process is inefficient. While Optimistic Governance does not directly address the root issue of quorum for referendum voting (which would still be required in certain instances), it can elevate many of the core functions of the DAO to a committees/leadership-based model, which circumvents the need for quorum, particularly for routine or procedurally approved processes.
Rather than requiring explicit approval from the full voter base for every action, optimistic governance empowers a designated committee, working group, or delegate to execute predefined responsibilities or decisions autonomously, unless a challenge is raised within a set dispute window. The only instance of this present in Uniswap DAO at the moment is approval for cross-chain deployments, which follow a 7-day optimistic approval period guided by the UAC. This setup was implemented due to voter fatigue when it came to deploying v3 on new chains. As soon as this optimistic setup was implemented, the number of approved chains increased drastically.
Optimistic Governance offers a pragmatic escape valve. It does not eliminate tokenholder control. It simply reconfigures the exercise of that control. The model retains ultimate oversight via the ability to veto or challenge actions, while enabling a more scalable and operationally resilient workflow for day-to-day DAO execution.
Example -- Aragon Solution:
Aragon champions an optimistic governance process more emblematic of corporate/board-structured governance. It's a construct predicated on two core ideas:
and...
Multi-Phasic Proposal Process: Much like a SAFE for governance, Aragon's solution allows for proposal staging such that each stage invokes the consent of different parties, or requires the meeting of specific requirements, before passing to a final community veto stage before passing. This is facilitated through Aragon’s Stage Proposal Processor (SPP). (For definition’s sake, we will refer to the entrusted individuals and entities with optimistic passing authority as the ‘privileged parties’.) Example:
- Stage 1: A committee composed of a 2-of-3 multi-sig approves the proposal
- Stage 2: The Uniswap Foundation’s attorney approves the proposal
- Stage 3: Optimistic Community Veto Window
- Pass (or Fail if vetoed)
Integration: This would not require a change to the base governor contract but rather a replacement of the timelock contract the governor interacts with with Aragon’s executor contract. This executor would be fully and wholly owned by the DAO, so future adjustments post-instantiation would be done through full-community, token-based governance.
Cost: The functionalities described here are available out of the box on the Aragon App and leverage OSx, an open-source governance framework. There is no cost associated with using either of these, however hiring Aragon to help with the design and implementation of this setup would be preferable.
Critical Configuration 1 – Veto Threshold: The veto threshold serves to balance the power of the privileged parties and committees. As an example, if a committee moves to allocate more funding to an initiative than the broader community may appreciate, it is the veto capacity that will block the optimistic continuation of the expenditure. However, as we see it, there are two sides to this equation: the first being to balance committee power as stated above, and the second being to prevent veto or bottleneck attacks on the optimistic model.
It was mentioned during the July 8th community call that the veto threshold should be fairly constrained at around 1M to 2M UNI, intuitively to prevent consolidation of power amongst the privileged parties. However, should the veto constraint be too low, it would become trivial for large to mid-sized malicious parties to repeatedly block proposals for no other purpose than to push internal agendas. At present, attacks of this nature on the DAO as it stands today would require 51% of the total voting power, and total voting power would need to exceed the required quorum. Attack via veto would require tens of millions of UNI tokens.
If, for example, the veto threshold was set at the referenced 1.5M UNI, in theory, any actor with this sum could block all procedures across the DAO
Mitigating Factor 1: The veto itself functions as a referendum vote. All token holders may partake. Therefore, the attacker could be offset by the support of other actors in the ecosystem. That said, depending on the scale of the attack, this could create a de facto standard token vote for all DAO processes and limit the benefits of the optimist model altogether. ex. if an attacker voted FOR a veto with 10M UNI, but the broader community voted AGAINST with >10M UNI, the veto would not pass.
Mitigating Factor 2: If the vote were to be blocked at the veto-level due to a lack of general participation in opposition to the attacker by the token holder body, standard token governance is always still an option. The DAO could pass a standalone standard-token vote to pass the intended proposal as well as possibly increase the veto threshold, black list (though this is hard) the attacking party, or otherwise address the issue as deemed fit at that time.
It is important to note that these considerations are not to be presented as in excess of the potential value of the broader solution, but are instead noted as a black hat exercise and call to collective thought around the best possible execution path.
| Votable Supply | Quorum | Accessibility | Long-Term | |
|---|---|---|---|---|
| CPFs | YES | YES | YES | YES |
| IDVs | YES | YES | MAYBE | YES |
| Treasury | YES | YES | MAYBE | MAYBE |
| Reduce Quorum | NO | YES | NO | NO |
| Optimistic Governance / SPP | NO | YES (mostly) | NO | YES |
This document has laid out a comprehensive set of observations and potential interventions for making Uniswap governance more robust. Importantly, the goal here is not to advocate for a predetermined bundle of changes but rather to initiate structured dialogue across the community. Let us know—
Please share your thoughts below, or reach out directly to the UAC. With the help of other delegates over the coming weeks, we will synthesize this feedback, ideally leading to actionable proposals.
ScopeLift has voted against the delegation vaults proposal on Snapshot. There are two distinct reasons for this.
First, there’s not currently enough clarity on the technical implementation of what’s being proposed. I respect the work of Event Horizon, and to their credit, when I reached out to ask questions, they were extremely responsive and helpful. They open sourced the distribution contracts at my request, and are working to provide more information and documentation. I suspect that in short order, we can get to a point where we have the requisite transparency on the technical details, and therefore assess the technical soundness of the proposal.
Secondly, and separately, I’m not convinced that the tradeoffs around IDVs are the right ones for the DAO, and it’s not clear to me from the conversation in this thread that they were sufficiently weighed.
As one example of this, it’s generally framed as a benefit that the token holder does not have to do anything to receive rewards, such as registering or depositing the tokens in a staking contract. However, it’s not obvious to me this is a net benefit for the DAO. A token holder who claimed at the airdrop, delegated to a “big name” they recognized, and has never so much as thought about Uniswap DAO since then, will receive the same rewards (if there delegate has remained active) as someone who is regularly engaged with the community, voting on proposals and/or changing their delegation based on their delegate’s behavior. Is this definitely what the DAO wants? Would some proof of “liveness” be a beneficial feature?
There are several other points like this that could be discussed. I don’t mean to elucidate each one in this particular post, but simply to call attention to the fact that the pluses and minuses of IDVs seem under discussed.
I want to acknowledge that I’m guilty here of something that has frustrated me in other contexts: I missed this discussion completely in the forum, until very recently, and am hopping in to play catch up now that a vote is actually live. It’s very possible that a number of discussions of these kinds of tradeoffs were had in other contexts, like UAC calls, that I was unaware of. I think this fragmentation of effort—where various members of the DAO don’t know what others are doing—is a structural issue with decentralized governance, but I do still feel bad for contributing to this negative dynamic in this case. I also still feel obliged, now that I am aware of the proposal, to raise my concerns and vote according to the information I have available.
I also want to acknowledge that I don’t have a totally unbiased view. ScopeLift built the UniStaker contracts, which sought to incentivize delegation through the distribution of protocol fees rather than treasury tokens. While the context is different, the UniStaker contracts could still serve this purpose, and it’s not clear to me if they were considered, and if they were, why they weren’t chosen. I will point out that UniStaker is not a product of ScopeLift’s, but rather an open source codebase we were given a grant by the UF to write. We don’t stand to benefit directly from the adoption of UniStaker by the DAO, (though perhaps indirectly it would be redound to our benefit reputationally).
While I acknowledge I can’t claim to be totally unbiased when I ask “why isn’t the DAO using UniStaker for this purpose?”, I still think it’s a question worth asking, and to the extent it was discussed at some point, I would love to understand the answers.
So, to reiterate, ScopeLift is voting against the IDV proposal for two main reasons: a lack of technical clarity and a need for a better understanding of the tradeoffs around the mechanism chosen. It’s possible ScopeLift’s vote will change between now and an onchain proposal if these concerns are addressed.
Finally, I want to reiterate again that I respect the work Event Horizon has done here, and have total confidence they’ve acted in 100% good faith. My current skepticism about the proposal has nothing to do with my opinion of EH as a team—quite the opposite.
Thank you for structuring the two proposals!
We have separate feedback and comments for each of them:
In principle, we agree with this proposal, as we have repeatedly and in differetn postrs expressed our support for it. While we acknowledge that it may not be the ideal or definitive solution, we believe it is necessary given the current challenges the DAO faces in consistently reaching quorum for on-chain proposals.
That said, we have two suggestions to improve the proposal:
Cap per delegate. In addition to maintaining the 2.5M VP total cap (coming from the treasury or otherwise), we suggest that no delegate should receive more than 1M or 1.5M UNI through this program. This means that regardless of the VP each delegate already holds, no single delegate would be allocated more than this threshold, with the overall cap of 2.5M UNI per delegate remaining in place. This adjustment would ensure that treasury delegation is distributed more horizontally across more delegates, reducing the risk that only 4 or 5 delegates capture the entire 10M UNI delegation pool.
Selection method. We do not agree that delegates should be chosen by DAO voting. As we have pointed out on previous occasions, such a process risks becoming a popularity contest or incentivizing cartelization or collusion among delegates. This would contradict good governance practices and directly contravene the Uniswap DAO Principles (“Delegates must prevent the formation of cartels and ensure that the protocol is protected from any proposals driven by personal motives that do not align with the protocol’s best interests”). Instead, we believe that the ranking and selection among applying delegates should follow the same scoring methodology as the rewards program, which accounts for participation rates. This is a more objective and reliable way to prioritize delegates based on their actual engagement in the DAO and avoid the risk of assigning VP to popular delegates with low participation, which would conspire against the proposal's goal of increasing the voting VP.
We have previously stated our opposition to this proposal, and in addition to the reasons already provided, we would like to add further concerns based on the details now available:
Overlap with UVN - Trial Program. Unichain will soon launch UVN, which aims to attract and incentivize UNI tokenholders to become stakers and validators of the network. We believe this IDV system would directly compete with the official staking mechanism since both aim to attract UNI. When we raised this point, @donofdaos responded that Unichain’s launch may take time and, if this initiative proved redundant, the IDV could be deprecated once UVN is live:
While UVN is a promising step toward increasing delegation, its timeline remains uncertain, and several implementation details are still to be determined. More importantly, there’s no guarantee that UVN alone will be sufficient to restore quorum stability. In the meantime, DAO-led solutions are necessary. At worst, these initiatives become redundant and can be deprecated upon UVN’s launch; at best, they serve as critical infrastructure to support any delegation gap UVN may leave unaddressed.
However, the proposal currently presented includes a two-year implementation and budget. This is inconsistent with the response given, since while UVN’s timeline is uncertain, it is not expected to take two years or longer. If approved with a two-year scope, the IDV program will very likely become redundant and compete with UVN in attracting UNI. We are not comfortable with this, Unichain and UVN should have full priority and support from the DAO. We believe the proposal should be significantly reduced in both duration and budget, and instead designed as a 6-month pilot program, renewable every 6 months by DAO vote if proven successful, and only if it does not overlap with UVN once launched.
Potential Conflict of Interest. In reviewing this proposal, we want to raise a concern regarding the dual role of @donofdaos as both a member of the Uniswap Accountability Committee (UAC) and the founder of @eventhorizon, the entity proposed to develop and maintain the IDV. As described, the UAC would not only monitor implementation and evaluate deliverables, but also oversee the disbursement of funds related to this proposal. Given @donofdaos’s connection to @eventhorizon, this could place him in the challenging position of being both service provider and evaluator of the same work — for instance, participating in decisions on milestones, APR adjustments, or payment releases to the company he founded. We believe this situation raises important questions for the DAO:
The Uniswap DAO Principles note that “Severe conflicts of interest that could undermine the integrity of governance must be avoided.” and that “delegates should err on the side of transparency and openness.” In light of this, we respectfully suggest that the DAO consider whether additional safeguards (such as recusal from budget administration or milestone evaluation) would be appropriate if this proposal moves forward.
Our intention is not to question the good faith of any individual, but to ensure that Uniswap governance upholds the highest standards of impartiality, transparency, and accountability.
We are strongly in favour of treasury delegation. While we do not see this as a long-term solution, it is a necessary step to increase the voting supply to a level that allows ordinary proposals to reach quorum reliably. The recent vote on establishing Uniswap Governance as DUNI demonstrated that the community is both capable and willing to mobilise for proposals with significant impact. This is a healthy sign for Uniswap governance overall, but it also highlights the importance of building a consistent base of regular voters who can support the many “ordinary operational” proposals that have underpinned the protocol’s growth over the years. Treasury delegation offers a practical way to achieve this.
We support UAC’s suggested path forward and, at the same time, echo @SEEDGov’s recommendation that adding objective eligibility requirements for delegate candidates is likely to provide better results. We believe it is fair to include objective requirements in the application as suggested, determining the baseline for qualification to the election. Clear criteria—such as the suggested 75% voting participation—help set a fair baseline and ensure reliability from those receiving delegated funds.
On the IDV proposal, we view this as a more experimental but promising initiative. Running a 12-month pilot with @EventHorizon seems like a sensible way to test its effectiveness. In parallel, we believe initiatives such as DUNA and UVN could significantly strengthen Uniswap governance and participation in the medium term. Until then, an IDV pilot provides a valuable opportunity to drive results in the shorter term.
Thanks to @DonOfDAOs and the rest of the UAC for putting these ideas forward. As a disclaimer, 404 is one of the delegates currently participating in the active treasury delegation program.
After reviewing the options discussed and current feedback for governance improvements, treasury delegation appears to be the favored path. This is understandable, as the program has been battle-tested within the DAO and proven effective in meeting its core objective: attaining quorum.
That said, we should be mindful of the risks of continually increasing treasury delegation. While it is an important program for the DAO, in order to ensure that quorum is reached and governance can function smoothly, treasury delegation dilutes the governance power of actively participating token-holders. This may unintentionally disincentivize UNI holders from delegating or further engaging in governance.
We look forward to continuing the discussion around short to medium term solutions for governance operations.
Hey Jojo,
Thank you for the feedback!
Will there be an option to not choose any delegate in the list of options?
TD: If I'm understanding your question properly, this would be achieved by abstaining or not voting.
IDVs We fully intend for the program to evolve over time, whether through refining delegate credentialing, experimenting with alternative APR models, integrating with third-party solutions, or adopting any other adjustments the DAO prefers. We’ll maintain open lines for feedback (both in one-on-one conversations and during community calls) so that iteration is community-led.
The current v1 design prioritizes speed, simplicity, and general delegate agreeability in effort to solve the immediate quorum deficit; the systemically critical issue. A flat APR keeps flows simple, predictable, consistent with respect to emission per delegated UNI, and uniform across delegates. Introducing dynamic APR creates greater complexity in payment flows, inter-delegate dynamics and delegator behavior, which we believe is better suited for experimentation once the baseline program is live.
That said, some measures (such as caps) can be introduced with relatively little complexity, and we are open to exploring those adjustments sooner. Our general stance is to work with the DAO to launch the simplest, agreeable version to address the immediately critical issue.
To be clear I don't mean to discourage your ideation on end-state solutions. It is very valuable and highly encouraged. More so, my point is that we'd like to address the problem and then see these nuances deliberated in evolution of the program once live (hence our commitment to build and maintain). And, its worth noting, that we will likely benefit collectively from being able to leverage the live feedback loop as we iterate vs speculate/estimate the optimal structure pre-launch from an infinite set of possible structures.
Hello @bendi and @dennisonb , collectively, the staker team. I appreciate your acknowledging the conflict of interest.
That said, I am surprised that the landing point of your team is to work against a solution that resolves a systemically critical crisis the DAO is facing (a $200M quorum deficit) out of personal product preference and the conjuring of competitive analysis. I'm also a bit confused why this discussion materialized only after the community supported and aligned with IDVs through temp check, and not during the ~2 months of forum discussion and multiple community calls. Ultimately, that is your choice, but the health of the DAO is critical, and deepening entrenchment and delay don't serve the DAO or the community.
Hello @bendi and @dennisonb , collectively, the staker team. I appreciate your acknowledging the conflict of interest.
That said, I am surprised that the landing point of your team is to work against a solution that resolves a systemically critical crisis the DAO is facing (a $200M quorum deficit) out of personal product preference and the conjuring of competitive analysis. I'm also a bit confused why this discussion materialized only after the community supported and aligned with IDVs through temp check, and not during the ~2 months of forum discussion and multiple community calls. Ultimately, that is your choice, but the health of the DAO is critical, and deepening entrenchment and delay don't serve the DAO or the community.
To establish the landscape: The UF has made no public forward progress on Unistaker for over a year. I would imagine that they have their reasoning. In part, I would imagine, this is rooted in the added complexities, level of protocol integration, and regulatory consideration required for staker. Simultaneously, Tally has made no efforts to collaborate with the DAO directly except perhaps this message explicitly in response to IDV's direct DAO/community engagement.
In contrast, IDVs emerged from inception through direct communication with and voting of the DAO itself. The solution is intentionally lightweight, low-protocol commit/integration, and is designed to stop an acute issue.
The crux being, IDV's, a simple, DAO-supported, and most importantly, immediately viable solution, not predicated on hypothetical requirements, is likely the better tool for resolving the DAOs complete bottleneck it faces today than an intentionally shelved product, contingent on uncertain protocol decisions, operated outside the direct discussion of the DAO.
I would encourage the Tally team to recognize that IDVs in no way change the future of staker or the pre-existing blockers it faced (e.g. if it were viable, it would be live after over one year of effort, and if it becomes viable through UF, it still can be). But, we can help the DAO become functional today, and further extending a greater than year-long delay in preference of staker, at the expense of the DAO, is only at odds with serving the best interest of the DAO and community.
IDVs pay for passive delegation and require no proof of liveness, deliberation, or accountability.
This is untrue. IDVs are created for a select number of trusted, community-supported delegates with proven track records. Inclusion or exclusion, as well as all required metrics, are freely created or changed by the DAO and enforced by the UAC. In fact, several teams have already reached out and begun discussions about how they could support in the credentialing, reward distribution, and delegate metrics capturing, and participation enforcement portions of the program (these teams include Blockful, Curia, and Lighthouse). Should IDVs pass, these discussions will be hosted publicly, facilitated in community calls and forums. We see this as a multi-team, community-wide initiative. Tally is welcome to join the community in building this.
Beyond the above fact, that IDV recipients are beholden to valuable contributions. The DAO is $200m beneath quorum. If one truly considers the health of the DAO, quorum itself is far from a cosmetic issue.
Rewards scale with existing delegate size and longevity, creating a positive‑feedback loop that entrenches incumbents and incentivizes delegate blocs to coordinate.
As a first note, the idea that rewards 'entrench' delegates permanently is at odds with your latter statement that rewards lead to fickle, transient delegators. Either direct emissions lock delegators in (thereby durably increasing quorum) or they only support delegations so long as they are emitting (in which case adjustments to rewards, inclusion of new delegate IDVs, and changes made by the DAO and UAC would allow the DAO to granularly manage and distribute voting power). The former solves quorum with a single round, the latter allows for evolution of the program to give the DAO great power in ensuring productive and equitable distribution of VP.
IDVs are fully capable of including more delegates as they meet eligibility requirements. These requirements and potential for eligibility incentive quality contribution directly.
The DAO spends scarce runway without creating a durable capability, product, or asset.
It is our understanding that staker relies on protocol-level fee distribution which has not been confirmed yet. Should unistaker not receive distributable protocol fees, it does not function. IDVs rely on treasury emissions, which are both reasonably small and guaranteed to be available now, when the DAO urgently needs it, in particular.
Uniswap is already pursuing mechanisms to attract UNI (e.g., UVN). IDVs would compete head‑to‑head in an APY race for the same token, fragmenting strategy and forcing the DAO to outbid itself.
Unlike staker, and in our opinion superior to staker, IDVs are intentionally low-commit and directly managed by the UAC and DAO. While unistaker requires systemic commitment, difficult unwind, and higher effort change and interaction, the IDV program can address quorum today, be guided manually and directly by the DAO, and begin to sunset the very day UVN launches (should the DAO prefer this route to potentially synergistic approaches). This has already been addressed, though. I have full faith in the collective intelligence of the DAO to find a solution, quite possibly sunset, that does not bid against itself.
We should probably opt to pick one lever, not subsidize competing ones, or even wait a bit to see what happens with the A16z delegations and the Fee Switch (which might naturally bring in a new cohort of participants)
Should the community decide that lever to be IDVs, I would hope the Tally team would not begrudge the decision. To reiterate, halting solution progress for the DAO on the basis of hypotheticals suitable for staker, is strictly worse for the DAO.
Ultimately, this is not to say that there isn't a future implementation of staker possible. Uniswap Foundation may decide it is viable at a later date. At that point, the IDV program, again, is in the full and manual control of the DAO, and can be sunset or synergized as deemed fit, similarly to considerations around UVN.
Appreciate the update @DonOfDAOs and glad to see the treasury delegation proposal being stewarded forward by the UAC. Will there be an option to not choose any delegate in the list of options?
The IDV proposal does not clarify its stance on VP concentration amongst top delegates. We have seen tally’s impementation of staking rewards lead to heavy centralisation in other DAOs eg: rari, obol Since this is a concern cited by the UAC in its research and there is a suggestion to cap max delegation at 2.5M in the treasury delegation proposal, it would be helpful to have some parameters in the IDV proposal as well. It would be great if the IDV framework targets a ‘max’ delegation for each delegate and dynamically adjusts the APR based on how ‘far’ any given delegate is from that ‘max’ value, eg: delegators to delegates with 500K VP receive more APR than delegators to delegates with 1M or 2M VP etc…
Appreciate the update @DonOfDAOs and glad to see the treasury delegation proposal being stewarded forward by the UAC. Will there be an option to not choose any delegate in the list of options?
The IDV proposal does not clarify its stance on VP concentration amongst top delegates. We have seen tally’s impementation of staking rewards lead to heavy centralisation in other DAOs eg: rari, obol Since this is a concern cited by the UAC in its research and there is a suggestion to cap max delegation at 2.5M in the treasury delegation proposal, it would be helpful to have some parameters in the IDV proposal as well. It would be great if the IDV framework targets a ‘max’ delegation for each delegate and dynamically adjusts the APR based on how ‘far’ any given delegate is from that ‘max’ value, eg: delegators to delegates with 500K VP receive more APR than delegators to delegates with 1M or 2M VP etc…
Another helpful tip for the token holder is to delegate to a custom vault which auto balances delegations between delegates to maximize APR for the token holder.
It’s important to understand how much of the observed decline can be explained by broader, industry-wide reductions in DAO activity.
It’s important to understand how much of the observed decline can be explained by broader, industry-wide reductions in DAO activity.
As @kfx rightly pointed out, it's essential to consider how much of the decline in participation reflects broader industry-wide trends in DAO engagement.
While we don’t have formal research to cite at the moment, based on our experience and kpk’s active involvement across multiple DeFi DAOs, we believe this drop in voting participation is an industry-wide issue rather than something unique to Uniswap.
For instance, even Arbitrum DAO, one of the most active DAOs in the space, recently struggled to reach quorum on constitutional proposals. Similarly, DAOs like Gnosis, Aave, and Lido have dedicated initiatives to drive engagement and improve participation across their communities.
Atis, thank you for joining the conversation.
To be clear, I do support continuing with treasury delegation at least until the Unistaker goes live. However, I would not support increasing it to a level that would, on its own, fully compensate for the retracted 20M.
Atis, thank you for joining the conversation.
To be clear, I do support continuing with treasury delegation at least until the Unistaker goes live. However, I would not support increasing it to a level that would, on its own, fully compensate for the retracted 20M.
Clarification: The round 2 treasury delegation, as it's currently structured, adds 10M new delegations in addition to the existing 10M. This would bring the total treasury delegations to 20M and would close 10M of the 20M quorum gap.
Question: What is an amount that you feel is ideal in total terms (round 1 [10M] + round 2)?
Next Steps: Your general support for treasury delegations has been noted.
It’s important to understand how much of the observed decline can be explained by broader, industry-wide reductions in DAO activity. For example, one approach could be to fit a linear regression model that includes an “industry-average trend” as an explanatory variable.
According to the summary at the end, the Community Proposal Factory (CPF) appears to be the preferred option.
Ultimately, it will likely take a combination of solutions, which, based upon community decision, may or may not include CPF.
The systemic fix here would be to associate yield on UNI tokens with the condition of delegating to active governance participants.
In discussing proposed solutions, the UAC's goal is not to advocate or oppose, but to offer counterfactuals, steelman arguments, and constructive counterpoints as needed, not to establish formal positions, but to facilitate deeper dialogue and holistic evaluation. Simultaneously, we approach this with care, aiming to represent the community-sourced solutions entrusted to us by builders in good faith.
In discussing proposed solutions, the UAC's goal is not to advocate or oppose, but to offer counterfactuals, steelman arguments, and constructive counterpoints as needed, not to establish formal positions, but to facilitate deeper dialogue and holistic evaluation. Simultaneously, we approach this with care, aiming to represent the community-sourced solutions entrusted to us by builders in good faith.
Firstly, we would like to thank the UAC members for this post. Several delegates, including ourselves, have been warning for months about the quorum situation in the DAO, the risk of paralysis it faces and the need to find solutions.
it is common practice to coordinate with high-VP holders to publish them. Therefore, we do not see a need for this change.
Clarification: CPF is intended for Future Proofing. My understanding, however, is that CPF provides future proofing. While identifying delegates and securing champions is standard practice, it increasingly becomes a bottleneck (particularly at scale) and adds pressure to a shrinking pool of active high-VP participants.
We also disagree with the 10M delegation boost from the CPF smart contract. This is effectively a 25% onchain quorum reduction (from 40M to 30M), increasing governance risk by making it significantly easier for a malicious actor to reach quorum.
Counterfactual: CPF Still Requires Majority Agreement. While concerns about reduced quorum thresholds are valid, it’s important to note that CPF proposals still operate under the standard referendum process both at the sub and main DAO level. Should the broader DAO dislike or identify a proposal as malicious, the majority community vote would still block the proposal within the CPF from reaching the main DAO. And, should it reach the main DAO, further majority support would be necessary.
Feedback-Derived Improvement -- CPF Votes Abstain: A possible configuration that @SEEDGov 's perspective does bring about is to ensure the CPF votes ABSTAIN, rather than FOR. In this regard, the system further relies on standard consensus.
We do not support this approach that incentivizes V.P. delegation through UNI emissions or treasury allocations. Like with TVL-based incentives for liquidity pools, this approach creates unsustainable behaviors: tokenholders delegate while incentives are high, and withdraw when they’re gone, leaving governance participation dependent on continuous spending.
Counterfactual: Delegations tend to be sticky.
While concerns about sustainability are valid, the behavioral dynamics of delegation suggest that incentives don’t necessarily lead to short-term, extractive activity, but are in fact rather sticky.
Incentives typically prompt users to delegate in the first place, an action that requires effort, but there’s no comparable incentive to undelegate. In fact, there’s a disincentive to undelegate: users may fear missing out on future emissions or having to repeat the delegation process later.
We can observe similar dynamics in airdrop-based delegation models. For example, Scroll’s airdrop initiated delegation at token launch. Delegations didn’t unwind through active undelegation, but instead, they tapered off only when users sold their assets. While wallet assets may vacillate delegated status tend to persist.
Conversely, DAOs regularly face problems around high-stickiness, not low. This is seen through ghost delegates; accounts that retain large voting power despite long-term inactivity. In Aave, for instance, only ~7 of the top 100 delegates have voted in the past year, yet very few delegators have undelegated or re-delegated, underscoring the inertia built into delegation behavior.
Finally, this “stickiness” is reflected in the high failure rate of redelegation campaigns. Once a wallet is delegated, it tends to stay that way, even when campaigns try to dislodge it.
In effect, delegation is often a set-and-forget decision, and the risk of mass undelegation following incentive tapering is likely overstated.
Clarification: UVN is a promising solution, but holds a variable timeline and impact.
While UVN is a promising step toward increasing delegation, its timeline remains uncertain, and several implementation details are still to be determined. More importantly, there’s no guarantee that UVN alone will be sufficient to restore quorum stability. In the meantime, DAO-led solutions are necessary. At worst, these initiatives become redundant and can be deprecated upon UVN’s launch; at best, they serve as critical infrastructure to support any delegation gap UVN may leave unaddressed.
Counterfactual: Validators are not always governance-aligned. It’s also worth noting that validator incentives may not directly translate to responsible governance engagement. Validators often operate with a different focus and skillset from active governance participants, and many may not have the interest or ability, to engage meaningfully in DAO decision-making. It also remains to be seen whether UVN will allow for re-delegation to more involved actors while staked.
Incentivized Delegation Vaults (IDVs) would directly compete with official staking, which we believe is counterproductive.
This is a suboptimal solution, as the ideal scenario would involve aligning incentives with tokenholders so they participate directly or by delegating their voting power. Given the DAO’s current situation, another valid option would be for the UAC and Foundation to actively reach out to institutional tokenholders—such as a16z in the past—and encourage them to delegate to a curated group of delegates (potentially the same group that would receive the treasury delegation).
The UAC is actively engaging with both the UF and a16z to help stabilize quorum in the short term. That said, reliance on external coordination, however effective immediately, will always leave the DAO vulnerable to similar risks in the future. Our goal is not only to address the immediate quorum gap, but to help the DAO build a more durable, internally sustained quorum margin over time.
While we support this approach as a voting system that we understand to be positive in certain cases, it remains unclear to us which proposals would fall under this category and which should continue using the traditional voting system.
Feedback-Derived Improvement: Clarity around when Optimistic Governance is used. Establishing clearer guidelines for when Optimistic Governance should be used is a valuable suggestion. While it could, in theory, be left to the proposal author to choose the path at the time of posting, broader consensus on the criteria and process would help.
Moreover, this system also does not solve the root problem. It may help with routine, whitelisted proposals and proposers, but doesn’t impact more strategic or high-stakes proposals, which are the ones struggling to reach quorum.
Counterfactual: Optmistic Governance indirectly addresses quorum and directly addresses other concerns.
SEEDGov is correct that Optimistic Governance does not address quorum challenges for high-impact or contentious proposals (nor for proposals that establish the OG framework itself).
However, the core value of OG lies elsewhere: today, every proposal (regardless of scope) is treated as if it were high-stakes, requiring full quorum and maximum attention. By enabling procedural or low-risk proposals to move through a more efficient path, OG helps declutter governance, reduce voter fatigue, and free up attention for the proposals that do merit more intensive participation.
OG does not directly address quorum, though it does indirectly. And, it's important to note that quorum is the main, but not the only issue/improvement necessary.
Thank you FranklinDAO for joining the conversation and for the thorough analysis.
Counterfactual: The CPF is a separate, optional track to the primary governance flow. Given the CPF is a separate track there shouldn't be necessary delays. All delays would be accepted by the proposer as a trade-off. There is nothing preventing proposal authors from seeking a sponsor and pursuing the standard proposal path
Feedback Derived Improvement: standardizing CPF proposal requirements could drive higher quality. Creating a required format and template structure for 'valid' CPF proposals could address some of the valid concerns FranklinDAO has raised regarding proposal quality.
Personal Note: I, as an individual, find this approach novel and interesting. I find the incentive to delegate compelling alignment. I would worry that this, if not structured properly, could exaggerate the burden to champion that delegates face. However, I'd be open to scoping this solution out with you more broadly as a potential solution for this or future UAC posts.
Since increased participation doesn’t automatically improve governance quality or efficiency, it’s important to ask how does broader participation actually enhance DAO decision-making beyond attack resistance?
Next Steps: Your conditional support has been noted. Should additional support across the DAO continue, full scoping of the unit economics of IDVs will be shared.
Regarding governance quality, IDVs would incentivize delegation to a selected subset of community-selected, high-quality delegates. The selection process would also be concretized should the broader idea continue to receive full or conditional support.
Specific Recommendations:
Your support of TDs has been noted. Could you please:
Regarding selection itself, a formal set of nomination eligibility criteria will be suggested should TDs continue to grow full or conditional support.
Next Steps: This configuration suggestion has been noted and will be added to the next status summary the UAC provides.
Thank you @kpk , @SEEDGov and @pennblockchain for joining the conversation. Its a systemically important issue for the DAO and your participation is greatly appreciated.
I have reviewed the information and have the following comments:
1. Overall position: I agree that difficulty to reach quorum is a real problem, but at the moment I do not strongly support either of the proposed solutions. I'm reserving judgment depending on how the discussion evolves.
I have reviewed the information and have the following comments:
1. Overall position: I agree that difficulty to reach quorum is a real problem, but at the moment I do not strongly support either of the proposed solutions. I'm reserving judgment depending on how the discussion evolves.
To be clear, I do support continuing with treasury delegation at least until the Unistaker goes live. However, I would not support increasing it to a level that would, on its own, fully compensate for the retracted 20M.
2. Analysis of voting trends over time: It’s important to understand how much of the observed decline can be explained by broader, industry-wide reductions in DAO activity. For example, one approach could be to fit a linear regression model that includes an “industry-average trend” as an explanatory variable.
Another idea is to use a two-phase model: initial decline followed by later stabilization. Right now, there isn't enough evidence to conclusively favor this over a linear fit. I checked that the two-phase model produces a lower error (RMSE), but the difference doesn’t clearly justify the added complexity (Occam's razor is in favor of simpler models - too many parameters lead to overfitting).
3. Clarification on CPF According to the summary at the end, the Community Proposal Factory (CPF) appears to be the preferred option. However, I’m struggling to see how it would help with achieving quorum. Can you clarify? Is the idea that the 10M votes delegated to the CPF would actively participate in voting?
Edit: after reading DonOfDAOS's latest response, I see that this has already been addressed and that the CPF will vote "Abstain", consequently it won't help the quorum.
It seems unlikely that a proposal which cannot find a sponsor willing to post it or sub-delegate votes would have enough traction to pass quorum—especially since meeting quorum is a much bigger challenge than simply submitting a proposal.
4. "Bandaids" vs. a more stable solution It’s frankly not a good look that a single actor (a16z) can once again demonstrate how much Uniswap governance depends on their goodwill.
The systemic fix here would be to associate yield on UNI tokens with the condition of delegating to active governance participants.
FranklinDAO appreciates the UAC's careful analysis of the governance challenges facing Uniswap. After careful consideration of the proposed solutions, our team believes that the DAO should prioritize governance quality and proven mechanisms over experimental approaches that may introduce new risks.
FranklinDAO appreciates the UAC's careful analysis of the governance challenges facing Uniswap. After careful consideration of the proposed solutions, our team believes that the DAO should prioritize governance quality and proven mechanisms over experimental approaches that may introduce new risks.
Support: Expanded Treasury Delegations as the most effective near-term solution Conditional Support: Optimisic Governance for specific use-cases and decision flows Oppose: Community Proposal Factory and Quorum Reduction Neutral: Incentivized Delegation Vaults (pending cost-benefit analysis)
Before addressing specific proposals, FranklinDAO it's important to establish clear criteria for evaluating governance improvements. We think any changes should be assessed across three dimensions.
Efficiency: Speed & cost of decision-making processes Robustness: Resistance to governance attacks, rent-seeking, and system failures Quality: Likelihood of producing well-informed and beneficial outcomes for the DAO
These dimensions often involve tradeoffs, and our analysis prioritizes solutions that optimize across all three rather than maximize any single metric.
Community Proposal Factory (CPF) - Opposed
We're opposed to @GFXlabs's CPF solution for several fundamental reasons. First, quality considerations. The Uniswap ecosystem's complexity requires an understanding of technical, tokenomics, and legal ramifications. Grassroots proposals usually come from participants with limited governance involvement. Thus, they're unlikely to put forward proposals that advance the protocol's interests without consuming substantial attention and resources.
Efficiency Questions: The CPF introduces additional governance layers and potential delays. If most grassroots proposals lack the depth required for implementation, the CPF becomes a mechanism that consumes delegate attention without proportional value creation.
Instead, FranklinDAO recommends an alternative by building on the current forum-based systems:
This creates a representative-constituent model that provides screening and mentorship, incentivizes delegation to active gov participants, and maintains quality control without complex new infrastructure.
Incentivized Delegation Vaults (IDVs) - Neutral Pending Analysis
The fundamental challenge isn't just moving tokens off exchanges, it's creating sustained engagement. Even with incentives, retail participants delegate infrequently and remain largely uninformed about gov decisions. We believe that IDVs lack specific cost projections for the marginal increase in voting supply per unit of incentives. Given UNI's lack of native yield, even modest incentives might drive participations, but maybe not.
FranklinDAO would like a realistic analysis of:
Since increased participation doesn't automatically improve governance quality or efficiency, it's important to ask how does broader participation actually enhance DAO decision-making beyond attack resistance?
FranklinDAO offers conditional support to IDVs if comprehensive cost-benefit analysis shows reasonable acquisition cost for delegated tokens, clear metrics for success are established, and the program includes sunset provisions to build-in clear evaluation windows.
Treasury Delegations - Strong Support
Treasury delegations represent the most proven mechanism for addressing quorum challenges while maintaining governance quality. Kudos to @Doo_StableLab for pushing the initiative.
Specific Recommendations:
We believe that treasury delegations are the most straightforward path to meeting quorum reliably. It has further benefits of allocating voting power to proven governance participants, creates a buffer against single-entity delegation withdrawals, and has minimal ongoing operational costs.
Quorum Reduction - Opposed
FranklinDAO is strongly opposed to quorum reduction at this time. Lowering quorum is a short-term solution to a long-term problem facing every DAO, regardless of whether Uniswap's participation threshold is higher or lower than other DAOs. Lowering the economic barrier for governance decisions increases attack vectors, which are particularly problematic given that some actors control 30M+ UNI and that some on-chain decisions are irreversible.
Alternative Path: Rather than reducing quorum, the DAO should focus on sustainable participation through treasury delegations and targeted retail engagement. Quorum adjustment might be warranted after implementing other solutions and observing their effects over 12-18 months.
Optimistic Governance - Conditional Support
Optimistic governance offers efficiency gains for specific categories of decisions:
Implementation Concerns:
Veto Threshold Critical: The proposed 1-2M UNI threshold appears too low, potentially enabling griefing attacks by a single delegate. We recommend a higher threshold of 5-8M for meaningful veto protection. This threshold should correspond to requiring roughly 3/15 top delegates to veto a proposal.
Scope Limitations: Optimistic governance should explicitly exclude treasury allocations/budgets above defined thresholds or legal/regulatory decisions with broad implications.
We'd appreciate a deeper analysis of which flows should first roll out optimistic decision-making and what guardrails should exist to prevent exploitation.
The UAC has identified genuine challenges facing the DAO. FranklinDAO believes that the path forward should prioritize proven mechanisms and incremental improvement over experimental systems that introduce new risks. As such, we believe that strengthening the existing treasury delegations, enhancing current infrastructure through expanding the use of forums, and a phased roll-out of optimistic governance is the right path forward.
This strategy addresses immediate quorum challenges while maintaining the security and quality standards essential for governing Uniswap. We look forward to continued dialogue between the community and the UAC and stand ready to support proposals that advance these principles.
We appreciate the effort by the UAC team for delivering such a thorough and well-structured analysis. This post does an excellent job of surfacing the critical issues facing Uniswap governance and framing a path toward constructive solutions.
From my perspective, the situation is clear: our governance is structurally precarious. Quorum margins are near historic lows, and our ability to pass proposals increasingly depends on the consistent participation of a very small group of delegates. This over-reliance creates a systemic risk where the the abstention of just one or two key actors can stall the entire governance process.
We appreciate the effort by the UAC team for delivering such a thorough and well-structured analysis. This post does an excellent job of surfacing the critical issues facing Uniswap governance and framing a path toward constructive solutions.
From my perspective, the situation is clear: our governance is structurally precarious. Quorum margins are near historic lows, and our ability to pass proposals increasingly depends on the consistent participation of a very small group of delegates. This over-reliance creates a systemic risk where the the abstention of just one or two key actors can stall the entire governance process.
The quorum vulnerability we observe is not the root problem but a symptom of two underlying factors:
1. Low participation among delegates
Inactive or “ghost” delegates – A number of delegates hold significant voting power but fail to participate, rendering that power dormant.
Delegators delegating to inactive delegates – Tokenholders compound this issue by delegating to these inactive accounts, effectively sidelined their own voting power.
2. Undelegated tokens
Institutional undelegation events – cases like a16z where large-scale undelegations from funds or institutions for asset transfer or exit positions, which abruptly reduce votable supply.
Dormant Undelegated UNI – wallets that hold UNI but have never delegated, leaving this portion of the supply inactive in governance.
I also agree with @1a35e1’s observation that the problem is not the total delegated UNI (~193M), but rather the inactivity of much of this delegated power. While this latent voting power leaves governance vulnerable to decision paralysis, it also represents a profound opportunity if reactivated.
Thus, the ultimate goal should be to increase meaningful governance participation across two critical dimensions:
Votable Supply – increasing the amount of delegated UNI by encouraging delegation from holders and mitigating risks from large-scale undelegations (e.g., institutional actors like a16z) through proactive outreach.
Delegate Activity – improving how delegated voting power is utilized by:
Ensuring delegates who receive voting power actively participate in governance.
Guiding delegators to delegate to active participants rather than ghost or inactive delegates.
I share the view that CPF does not directly address the quorum issue. While it may improve accessibility and inclusivity, there is little evidence that delegates with small voting power currently face difficulty pushing proposals, as coordination with larger holders is already a functional pathway.
Moreover, CPF comes with structural complexity and implementation costs that may not be justified at Uniswap’s current scale. A key concern is the security risk tied to its design:
The CPF contract would hold a standing 10M UNI delegation to push proposals to the main DAO.
This effectively lowers the quorum for CPF-originated proposals from 40M to 30M UNI, reducing the cost for reaching quorum.
If misconfigured, this could make it significantly easier for a malicious actor to exploit the process and pass harmful proposals.
Rationale: CPF is not a priority for addressing the current quorum and participation issues. However, it could still be tested as an experimental tool to enhance proposal diversity, provided the DAO agrees on strict safeguards and clear cost-benefit justification.
I strongly support this solution. IDVs directly incentivize delegators, targeting both:
New UNI holders who have not delegated yet, and
Existing delegators who are currently delegating to inactive or “ghost” delegates.
This strategy aligns well with the goal of activating dormant voting power. We are keen to contribute to the discussions on defining “active delegates” to ensure the program 's effectiveness similar to our works within Obol collective.
Regarding the concern from SeedGov that IDVs may overlap with UVN. I agree with @DonOfDAOS’s clarification. While UVN is promising, its timeline is uncertain and its impact is not guaranteed to fully address quorum issue. It may be prudent, therefore, to concurrently explore DAO-led solutions like IDVs. Such initiatives could serve as valuable complements to UVN, addressing any delegation gaps it might leave unaddressed, and could be phased out if UVN proves to be a comprehensive solution on its own.
I support TDR2 as a necessary short-term measure to improve the quorum issue. However, it should be treated as a temporary bridge, not a permanent solution.
To maximize its impact while avoiding governance centralization, its implementation would ideally involve:
Paired with Healthy Delegation Margin (HDM) tracking to evaluate whether it actually improves participation.
Distributed carefully to avoid further concentrating voting power among existing large delegates.
I also echo SeedGov’s point that active outreach to institutional tokenholders—such as previous efforts with a16z—should be pursued alongside TDR2. Encouraging these investors to delegate to a curated set of active delegates would greatly strengthen quorum issue while keeping voting power in engaged, responsible hands.
I do not support quorum reduction. Lowering the quorum threshold increases unnecessary security risks while failing to address the root cause of the problem (low participation and undelegated tokens).
Since there are alternative solutions with less risk and more alignment with improving delegate engagement, this should not be pursued.
I also do not see Optimistic Governance as a solution to our current quorum problem.
It may improve efficiency for routine proposals, but it does not impact participation in high-stakes votes—the ones most at risk.
If implemented, we should clearly define which proposal types fall under this model to avoid confusion or misuse.
Like CPF, it is not a priority but could be tested as an experimental process improvement.
Another solution worth exploring is Dynamic Quorum, where the threshold is not a fixed number but can adjust over time. While the implementation details would require careful research,one potential design could involve adjusting the thresholds based on metrics like recent delegate activity. The primary benefit would be ensuring our quorum requirement remains realistic and connected to the actual state of governance activity.
Based on the analysis above, my current position on each solution is as follows:
✅ Treasury Delegation Expansion (TDR2): Support as a necessary short-term measure, with HDM tracking, careful distribution, and active outreach to institutional tokenholders to strengthen governance without over-centralization.
✅ Incentivized Delegation Vaults (IDVs): Support, as they directly activate dormant voting power and align incentives, with the understanding that they complement rather than conflict with UVN.
❌ Quorum Alteration: Do not support, as it introduces risk while failing to address the root cause.
⚪ Community Proposal Factory (CPF): Not a priority for solving the current problem, but could be tested under strict safeguards as an experimental tool for proposal diversity.
⚪ Optimistic Governance: Not a priority for addressing quorum, but may be valuable as a process improvement if scope is clearly defined.
🔍 Dynamic Quorum: Recommend research to explore its feasibility as a long-term, adaptive governance mechanism.
These are my initial thoughts on the path forward.I look forward to continuing this discussion and incorporate perspectives from other delegates as we work toward a solution that ensures Uniswap governance remains resilient and decentralized.
Hello!
Firstly, we would like to thank the UAC members for this post. Several delegates, including ourselves, have been warning for months about the quorum situation in the DAO, the risk of paralysis it faces and the need to find solutions.
We have some comments to make about the proposed alternatives in the post itself.
Hello!
Firstly, we would like to thank the UAC members for this post. Several delegates, including ourselves, have been warning for months about the quorum situation in the DAO, the risk of paralysis it faces and the need to find solutions.
We have some comments to make about the proposed alternatives in the post itself.
This system didn’t address the DAO's current main issue: onchain quorum. Lowering the proposal threshold to 1M UNI doesn’t solve the actual problem, as posting proposals has not been a bottleneck — it is common practice to coordinate with high-VP holders to publish them. Therefore, we do not see a need for this change.
Moreover, this proposed solution introduces an additional layer of complexity that is not justified given the current scale and activity level of the DAO. While such a mechanism might make sense in a larger DAO with a broader scope—where specialized sub-DAOs or expert groups could curate proposals—this is not the case in Uniswap DAO. If the main discussion space remains the forum, and no modifications can be made between Snapshot and on-chain execution, the added structure risks becoming counterproductive rather than helpful.
We also disagree with the 10M delegation boost from the CPF smart contract. This is effectively a 25% onchain quorum reduction (from 40M to 30M), increasing governance risk by making it significantly easier for a malicious actor to reach quorum.
We do not support this approach that incentivizes V.P. delegation through UNI emissions or treasury allocations. Like with TVL-based incentives for liquidity pools, this approach creates unsustainable behaviors: tokenholders delegate while incentives are high, and withdraw when they’re gone, leaving governance participation dependent on continuous spending.
Also and more important, this system would compete against the soon-to-be-launched Unichain Validation Network (UVN) whereby tokenholders will be compensated for staking UNI to validate the network. We do not believe that another incentive system for parallel and external staking should be created to compete against the official UVN.
This is a suboptimal solution, as the ideal scenario would involve aligning incentives with tokenholders so they participate directly or by delegating their voting power. Given the DAO’s current situation, another valid option would be for the UAC and Foundation to actively reach out to institutional tokenholders—such as a16z in the past—and encourage them to delegate to a curated group of delegates (potentially the same group that would receive the treasury delegation).
However, considering that outreach efforts to institutional tokenholders have shown limited results in other DAOs (e.g., Lido), treasury delegation emerges as a viable and pragmatic alternative. In this context, we reaffirm our support for @Tane’s proposals and continue to believe this is the most effective and low-risk solution at this specific time. It organically increases voting power by delegating to high-performing delegates, ensuring that the voting power is in active and responsible hands.
Key advantages:
It is flexible, safe, and efficient.
We oppose this proposal. While lowering quorum may appear to be a quick fix, it introduces serious risks by reducing the barrier to a governance attack.
If the UNI price drops, this risk increases. Additionally, changing the quorum requires smart contract changes, adding further complexity and potential points of failure.
While we support this approach as a voting system that we understand to be positive in certain cases, it remains unclear to us which proposals would fall under this category and which should continue using the traditional voting system.
Moreover, this system also does not solve the root problem. It may help with routine, whitelisted proposals and proposers, but doesn’t impact more strategic or high-stakes proposals, which are the ones struggling to reach quorum.
Given the DAO's current quorum problem, non-routine and important votes will continue to be at risk of paralysis. Although the optimistic governance system was designed to handle low-risk routine and procedurally proposals, it was not intended to address the issue of difficulty in achieving a quorum. Solutions should not be found in tools that were not designed to address these particular problems.
It’s crucial to consider that Unichain is launching the Unichain Validation Network (UVN), which will offer official staking rewards for UNI holders to validate the network. This initiative will likely increase UNI holder engagement within the Uniswap ecosystem.
In this context:
We firmly believe that Treasury Delegation remains the best short-term solution. It provides safety, zero cost, and strategic flexibility while we await UVN's rollout that will encourage large holders to mobilise their funds for staking, which presents a unique opportunity to onboard these large UNI holders into governance through direct participation or delegation. We believe that this is where efforts should be focused.
Thanks for compiling this thoughtful and in-depth analysis of the current governance challenges and potential paths forward.
Thanks for compiling this thoughtful and in-depth analysis of the current governance challenges and potential paths forward.
One way to highlight this trend is by tracking the quorum margin, defined as the percentage by which total votes exceeded the 40M quorum threshold. This metric offers a clear view of the DAO’s diminishing participation over time. Note that the current state of margin, 11.80% or 4.72M UNI (44.72M Total), is well below other DAOs and increasingly alarming.
We agree that the quorum issue is the most pressing and relevant challenge at the moment. As you highlighted, the current proposal margin of just 11.8% is quite concerning, and we believe raising this number should be the top short-term priority for the DAO.
While we’re confident that long-term initiatives like Unistaker and possibly UVN will play a key role in addressing this challenge, we also recognise that these solutions may take time to materialise fully. In the meantime, identifying a solid mid-term strategy makes great sense. In that context, treasury delegation and quorum alteration strike us as the most direct and actionable levers to pull.
The potential of IDVs and Optimistic Governance is promising, though likely more suitable for long-term experimentation and refinement.
That said, we do think it's important to approach quorum reduction with caution. Lowering quorum thresholds could increase the risk of governance attacks—especially considering the size of the Uniswap treasury. While the dollar value of the quorum currently sits at $280M, the DAO treasury is valued at $3.9 Billion. A higher quorum helps protect against that.
We fully agree with the UAC's assessment that the costs currently outweigh the potential benefits of a quorum alteration.
In contrast, treasury delegation provides a way to increase the proposal margin by empowering trusted parties, without broadly opening treasury access. It seems like a reasonable temporary solution that balances efficiency and security.
Because this analysis is broad and touches on various challenges and potential solutions—each with varying degrees of innovation, experimentation, and implementation timelines—we suggest a step-by-step approach. This would start with tackling the most urgent issues through feasible, direct actions, followed by a deeper evaluation and rollout of longer-term initiatives that could meaningfully strengthen the DAO's governance over time.
Appreciate the effort that went into this post, and looking to support pragmatic improvements.
Thank you for this thoughtful post. I agree with several delegates that the quorum issue is the most pressing at the moment and reducing quorum threshold will add more risk to the equation. I appreciate the solutions such as IDV and CPF. If incentivized correctly these offer promising solutions, but due to lack of data I am hesitant about going full speed on these just yet. We could run small experiments in the coming months to see how they perform and I’d be highly supportive of such experiments.
Treasury delegations seem to be the most optimal short term solution given the constrains presented in this post. I am supportive of the 10M threshold suggested in this post as well as a 2.5M cap. However, I would like to see delegations going to all delegates who have shown active participation in the past 1 year, as opposed to selecting a few delegates from all eligible delegates. In the past a fixed amount was suggested to be allocated to each delegate which resulted in having to select a few delegates. I believe this is the wrong approach since it evenly distributes VP amongst delegates with uneven performance. I’d rather like to see a proportional allocation based on performance which includes a broad set of active delegates.
continuation
At the time of write, with a token price of ~$6.50, Uniswap maintains the highest quorum dollar value of any DAO at ~$280,000,000. This is notably higher than even the most significant DAOs in the space.
continuation
At the time of write, with a token price of ~$6.50, Uniswap maintains the highest quorum dollar value of any DAO at ~$280,000,000. This is notably higher than even the most significant DAOs in the space.
| DAO | Quorum | % of Circ. Supply | Relevance |
|---|---|---|---|
| Uniswap | $284,800,000.00 | 6.66% | |
| Uniswap (adjusted) | $171,017,579.19 | 4.00% | Potential Alternative |
| AAVE | $167,520,600.00 | 4.25% | Highest TVL |
| Arbitrum | $62,000,000.00 | 4.03% | Largest L2 |
| LIDO | $32,290,570.15 | 5.00% | Systemic Importance |
| Optimism | $19,250,000.00 | 2.00% | Parent Chain |
| ENS | $18,640,000.00 | 3.02% | 3rd Largest Treasury |
Currently, Uniswap’s quorum dollar value is:
This makes the question of “why?” worthwhile for us to consider as a DAO. While the UAC does not currently take a position on the matter, it is essential that we, as a community, regularly question and review our assumptions. Is a $280M quorum threshold truly necessary, or even optimal?
Important Feasibility Note: Although the DAO has had some discussions in the past around both increasing and decreasing quorum, our present stance is that there should be no change to quorum as the costs outweigh the potential benefits. First, quorum changes aren’t as simple as changing the proposal threshold. More development work is required to make such alterations. Plus, quorum changes are far less trivial than proposal threshold updates since quorum represents the economic barrier to finalizing on-chain decisions, and altering it can have unintended consequences for protocol security.
Important Security Note: Lowering quorum may increase proposal throughput, but it also reduces the cost of malicious actions, especially in a protocol with a large treasury. And, if the Uniswap treasury increases in diversity, away from the native UNI token, the appeal of an attack increases. Thus, while lower quorum may seem attractive from a governance participation standpoint in the short-term, such a move should be considerate of the current and future state of the treasury.
Large actor considerations: It's important to weigh the above with the knowledge that some large actors such as a16z maintain token balances in excess of 30M UNI. Two example perspectives to take from this are:
or...
Influence on Actors:
Circulating Supply Beyond dollar value, another fairly common way to consider quorum is relative to token count through percent of circulating supply. At present, Uniswap’s quorum stands at ~6.66% of the circulating supply. This is ~50% higher than the average of the collection of DAOs mentioned and is generally quite high relative to the DAO space broadly.
If as an example alternative, Uniswap were to conform more closely to an industry standard ratio of 4% of circulating supply (adjusted), quorum would drop to ~24M UNI or $171,017,579.19.
At this adjusted level, nearly every historic proposal would have achieved or nearly achieved quorum, even without a16z delegations as visualized above. This does assume that 10M in treasury delegations persist.
Note on State of Circulating Supply: Unlike some other DAOs, where quorum may be in flux, altering based on the supply of the native token, Uniswap’s is fixed. Arbitrum DAO recently lowered its quorum threshold as a result of low voting participation, but that was in part due to the increasing bar for reaching quorum. A fixed threshold allows for more predictability.
Summary: Token governance is valuable, but the current process of requiring full community mobilization for every single change or process is inefficient. While Optimistic Governance does not directly address the root issue of quorum for referendum voting (which would still be required in certain instances), it can elevate many of the core functions of the DAO to a committees/leadership-based model, which circumvents the need for quorum, particularly for routine or procedurally approved processes.
Rather than requiring explicit approval from the full voter base for every action, optimistic governance empowers a designated committee, working group, or delegate to execute predefined responsibilities or decisions autonomously, unless a challenge is raised within a set dispute window. The only instance of this present in Uniswap DAO at the moment is approval for cross-chain deployments, which follow a 7-day optimistic approval period guided by the UAC. This setup was implemented due to voter fatigue when it came to deploying v3 on new chains. As soon as this optimistic setup was implemented, the number of approved chains increased drastically.
Optimistic Governance offers a pragmatic escape valve. It does not eliminate tokenholder control. It simply reconfigures the exercise of that control. The model retains ultimate oversight via the ability to veto or challenge actions, while enabling a more scalable and operationally resilient workflow for day-to-day DAO execution.
Example -- Aragon Solution:
Aragon champions an optimistic governance process more emblematic of corporate/board-structured governance. It's a construct predicated on two core ideas:
and...
Multi-Phasic Proposal Process: Much like a SAFE for governance, Aragon's solution allows for proposal staging such that each stage invokes the consent of different parties, or requires the meeting of specific requirements, before passing to a final community veto stage before passing. This is facilitated through Aragon’s Stage Proposal Processor (SPP). (For definition’s sake, we will refer to the entrusted individuals and entities with optimistic passing authority as the ‘privileged parties’.) Example:
- Stage 1: A committee composed of a 2-of-3 multi-sig approves the proposal
- Stage 2: The Uniswap Foundation’s attorney approves the proposal
- Stage 3: Optimistic Community Veto Window
- Pass (or Fail if vetoed)
Integration: This would not require a change to the base governor contract but rather a replacement of the timelock contract the governor interacts with with Aragon’s executor contract. This executor would be fully and wholly owned by the DAO, so future adjustments post-instantiation would be done through full-community, token-based governance.
Cost: The functionalities described here are available out of the box on the Aragon App and leverage OSx, an open-source governance framework. There is no cost associated with using either of these, however hiring Aragon to help with the design and implementation of this setup would be preferable.
Critical Configuration 1 – Veto Threshold: The veto threshold serves to balance the power of the privileged parties and committees. As an example, if a committee moves to allocate more funding to an initiative than the broader community may appreciate, it is the veto capacity that will block the optimistic continuation of the expenditure. However, as we see it, there are two sides to this equation: the first being to balance committee power as stated above, and the second being to prevent veto or bottleneck attacks on the optimistic model.
It was mentioned during the July 8th community call that the veto threshold should be fairly constrained at around 1M to 2M UNI, intuitively to prevent consolidation of power amongst the privileged parties. However, should the veto constraint be too low, it would become trivial for large to mid-sized malicious parties to repeatedly block proposals for no other purpose than to push internal agendas. At present, attacks of this nature on the DAO as it stands today would require 51% of the total voting power, and total voting power would need to exceed the required quorum. Attack via veto would require tens of millions of UNI tokens.
If, for example, the veto threshold was set at the referenced 1.5M UNI, in theory, any actor with this sum could block all procedures across the DAO
Mitigating Factor 1: The veto itself functions as a referendum vote. All token holders may partake. Therefore, the attacker could be offset by the support of other actors in the ecosystem. That said, depending on the scale of the attack, this could create a de facto standard token vote for all DAO processes and limit the benefits of the optimist model altogether. ex. if an attacker voted FOR a veto with 10M UNI, but the broader community voted AGAINST with >10M UNI, the veto would not pass.
Mitigating Factor 2: If the vote were to be blocked at the veto-level due to a lack of general participation in opposition to the attacker by the token holder body, standard token governance is always still an option. The DAO could pass a standalone standard-token vote to pass the intended proposal as well as possibly increase the veto threshold, black list (though this is hard) the attacking party, or otherwise address the issue as deemed fit at that time.
It is important to note that these considerations are not to be presented as in excess of the potential value of the broader solution, but are instead noted as a black hat exercise and call to collective thought around the best possible execution path.
| Votable Supply | Quorum | Accessibility | Long-Term | |
|---|---|---|---|---|
| CPFs | YES | YES | YES | YES |
| IDVs | YES | YES | MAYBE | YES |
| Treasury | YES | YES | MAYBE | MAYBE |
| Reduce Quorum | NO | YES | NO | NO |
| Optimistic Governance / SPP | NO | YES (mostly) | NO | YES |
This document has laid out a comprehensive set of observations and potential interventions for making Uniswap governance more robust. Importantly, the goal here is not to advocate for a predetermined bundle of changes but rather to initiate structured dialogue across the community. Let us know—
Please share your thoughts below, or reach out directly to the UAC. With the help of other delegates over the coming weeks, we will synthesize this feedback, ideally leading to actionable proposals.