The Uniswap Foundation has put forth a governance proposal requesting $62.37 million in funding to support the growth of the Uniswap ecosystem. An on-chain vote on the proposal is set to take place on Wednesday, October 4, 2023.
Last year, the Uniswap Foundation requested $74 million to establish itself, and the proposal was approved through a governance vote. The funding was divided into two tranches, with the second tranche to be requested via an on-chain vote at a later date.
“The reason for breaking our funding into two tranches was to allow for the UF to finalize the completion of its legal entity, and to formally receive non-profit 501(c)4 status from the IRS (and thus receive clarity on tax implications), prior to receiving the larger portion of funds. We are pleased to have received that status in Spring of this year,” said Devin Walsh, Executive Director and co-founder of Uniswap Foundation.
10% Buffer for Price Risks
The initial funding proposal had the Uniswap Foundation receiving $20 million in the first tranche, but due to a dip in the price of UNI tokens, the group received only $17.3 million. To mitigate price volatility, the foundation is requesting an additional 10% buffer, amounting to $5.67 million, to be added to the remaining $56.7 million from the initial funding. Hence, the Uniswap Foundation is proposing a total funding of $62.37 million.
Usage of Funds
If the funding proposal is approved, the Uniswap Foundation plans to allocate the $56.7 million into two categories: operations and grants. The funds will be used for employee compensation packages, developer support, providing a six-month cash runway, and investing in low-risk yield-bearing assets.
1. What is Uniswap?
Uniswap is a decentralized cryptocurrency exchange protocol built on the Ethereum blockchain. It enables users to trade ERC-20 tokens directly from their wallets without the need for intermediaries.
2. How does the Uniswap Foundation receive funding?
The Uniswap Foundation relies on governance proposals and on-chain votes to secure funding for supporting the growth of the Uniswap ecosystem.
3. When will the on-chain vote for the funding proposal take place?
The on-chain vote for the Uniswap Foundation’s funding proposal is scheduled for Wednesday, October 4, 2023.
4. How will the funds be used if the proposal is approved?
The funds will be used for employee compensation packages, developer support, providing a six-month cash runway, and investing in low-risk yield-bearing assets to support the Uniswap ecosystem.
5. What is the purpose of the 10% buffer requested by the Uniswap Foundation?
The Uniswap Foundation is requesting a 10% buffer to mitigate potential price volatility risks and ensure that sufficient funding is available for the intended use.