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Uniswap DAO is voting on a proposal to reclaim 12.5 million UNI tokens, worth roughly $42 million, that were loaned to the Uniswap Foundation and key delegates between 2022 and 2023. The loans were originally intended to boost governance participation, but the proposal argues that governance activity has since grown substantially.
With voting ending May 8, about 53% of voters support the move, while 46% have abstained.
Erin Koen, governance lead at Uniswap Labs and the proposal’s author, said the loaned tokens have served their purpose and are no longer necessary. He pointed to a shift in participation: passed proposals now average around 75 million votes in turnout, exceeding governance quorum by approximately 88%.
Koen also cited the creation of DUNI, Uniswap’s Decentralized Unincorporated Nonprofit Association. DUNI recognizes onchain votes as legally binding and is designed to protect DAO members from personal liability—developments the proposal describes as strengthening the governance foundation.
According to Snapshot data, there are now 56 delegates holding more than 1 million UNI in voting power. The proposal argues this broader distribution reduces the importance of the loaned tokens for maintaining quorum.
Critics have argued that the Uniswap Foundation holds too much influence within the DAO, pointing to decisions made without sufficient community input and proposals they say are pushed without broad deliberation.
They also contend that large token holders and venture capital firms, including a16z crypto, dominate voting power, limiting the influence of smaller UNI holders.
The issue drew attention beyond crypto policy circles. US Representative Sean Casten of Illinois raised questions about Uniswap DAO’s decentralization during a June hearing on the Clarity Act, increasing pressure for Uniswap to demonstrate decentralization across its governance structure.
In response to decentralization and alignment concerns, Uniswap Labs and the Uniswap Foundation co-authored a proposal to align incentives across all three entities. That proposal passed in a DAO vote in December.
The stated objectives include adding protocol fees, using proceeds to buy back and burn UNI, and eventually merging Uniswap Labs with the Foundation.
The token recall is also framed as addressing a deeper misalignment risk. The proposal notes that delegates selected for governance participation may hold little of their own UNI, creating a gap between voting power and economic exposure.
Koen said this misalignment should not persist indefinitely now that the original reason for implementing the loan mechanism is no longer a concern, and that the current vote reflects this shift.
