Binance Becomes The Entity With The Second-Highest Voting Power In Uniswap Community
- Leading crypto exchange Binance has become the entity with the second-highest voting power in the Uniswap community, accumulating 5.9% of the total voting power.
- This is a “very unique situation, as the UNI technically belongs to its users,” said Hayden Adams, the founder of Uniswap on Twitter.
- Crypto billionaire and the founder of Binance Changpeng Zhao said that the UNI tokens in question were transferred between internal Binance wallets, which caused the UNI to be automatically delegated.
Binance, the world’s biggest crypto exchange, has become the entity with the second-highest voting power in the Uniswap community, which represents the holders, developers, validators, and other people essential for the proper working of the world’s biggest decentralized crypto exchange built on the Ethereum blockchain.
With Binance becoming the second-most powerful entity in the Uniswap community, it is clear that the exchange has now a strong voting power which might change the course of a decision in the near future if needed. It is crucial to note here that the more governance token an entity holds, the more voting power they have. In this case, it means that the more UNI tokens an entity possess, the more power their decisions will be whenever a proposal is put up for discussion.
A wallet address belonging to Binance saw a deposit of 13.2 million UNI tokens on Oct. 18 and it was clear that the coins were delegated by the exchange as the entire crypto community was talking about the same. Now, the world’s biggest exchange by trading volume will take part in the governance of the world’s biggest decentralized exchange and this has become a cause for concern for the founder of Uniswap, Hayden Adams who has been taken aback by this sudden move.
This is a “very unique situation, as the UNI technically belongs to its users,” said Adams on Twitter.
Now the voting power vested with Binance is 5.9% of the total voting power. This percentage is calculated by taking a percentage of tokens delegated to the decentralized exchange out of all delegated tokens. The highest voting power is with a16z, one of the biggest names in the crypto industry which has funded some of the biggest crypto startups and had recently introduce Crypto Startup School to help new crypto startups find their way through the current bearish crypto market.
“Normally more gov participation = good, however it’s unclear how binance intends to engage Binance users would prob prefer to keep these gov rights (similar to what compound has done with cUNI) In the spirit of transparency would love to hear from @cz_binance on their plans,”said tne founder of Uniswap.
On the other hand, crypto billionaire and the founder of the world’s largest exchange Changpeng Zhao or better known as CZ in the crypto space, stepped in to clear the air, adding that the UNI tokens in question were transferred between internal Binance wallets, which caused the UNI to be automatically delegated.
“This is part of their protocol, not “we intended”. Binance don’t vote with user’s tokens. Uniswap misunderstood the situation. Tokens come to popular platforms,”Zhao further added.