Uniswap Treasury Holds Over $5 Billion in Assets, Mostly in $UNI Form. Recently, a proposal was launched on the Uniswap forum with the aim of addressing the single asset composition and underutilization of the current Treasury by establishing the Uniswap Treasury Working Group.
(Uniswap Users Must Empty Airdrop》Aperture Finance to Launch Currency, Teaching You How to Participate in Simple Referral Activities)
(Background Supplement:
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Uniswap DAO is the second richest protocol in the crypto space, currently holding over $5 billion in funds, most of which exist in its native token, $UNI. According to DeepDAO data, Uniswap’s Treasury is completely composed of $UNI, with over 400 million tokens. The next largest holding is $DAI, with a quantity of 749,000 tokens, which is insignificant compared to the massive $UNI reserves.
However, this allocation of funds may soon change.
The proposal suggests diversifying the assets of the Uniswap Treasury and creating additional income. Recently, a proposal was launched on the Uniswap forum by Arana Ventures investors and StableLab co-founders, with the aim of establishing the Uniswap Treasury Working Group (UTWG) to achieve long-term financial health for the DAO and support the continued development of Uniswap. This includes stabilizing the Treasury through asset diversification and finding ways to generate income and additional revenue beyond protocol operations.
The proposal states that the Uniswap DAO’s Treasury holds assets worth nearly $6 billion, but they are all in the form of $UNI tokens. This single asset composition and lack of effective utilization plan result in high asset volatility and underutilization of the Treasury.
The proposal provides an example, stating that the value of the Uniswap Treasury soared to nearly $19 billion during the 2021 bull market but dropped to $1.5 billion during the bear market in 2022. Such volatility is not ideal. In addition to diversification, the committee aims to explore how to transform the Uniswap Treasury from dormant reserves of UNI tokens into a fund that can generate income and additional revenue for the DAO.
The proposal states that the UTWG will explore plans for managing the protocol’s reserves and creating additional income for the project. It also proposes a budget of $74,000 for members to conduct eight weeks of research. During this period, the UTWG will conduct research and engage with various entities familiar with fund management and related topics to develop various funding plans for Uniswap DAO. The corresponding outcomes will be published on the forum, and they will present at least two viable funding management options for DAO voting.
Snapshot Voting Support Rate is Nearly 80%
According to the off-chain governance platform Snapshot, the community sentiment survey for this proposal has received overwhelming support, with a support rate of 79.62%. The voting will end on April 1, and there are currently 469 community members participating in the vote.
However, the proposal also points out a potential concern: before selling any $UNI from the Treasury, it is necessary to have a clear understanding of the legal aspects involved, including how to pay taxes and limit liabilities.
Therefore, the proposal suggests the establishment of another working group to address these legal issues. Once the DAO becomes a legal entity (possibly adopting the DUNA or other legal frameworks), the funding management plan can be implemented based on the research results of the UTWG.
Note: DUNA stands for Decentralized Unincorporated Nonprofit Association Act, a new law passed in Wyoming, USA, recognizing DAOs as legal entities.
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