A16z Exerts Control Over Uniswap by Downvoting BNB Chain Deployment
February 7, 2023
The VC giant has used its overwhelming voting power in an attempt to quash a proposal by Uniswap governance.
A16z, a cryptocurrency venture firm, voted against the use of the Wormhole bridge for Uniswap V3 deployment on the BNB Chain with its 15 million UNI token voting block.
The outcome of the proposal vote is still being determined, but it appears that a16z has managed to sway about half of the votes cast so far thanks to its massive collection of tokens.
On February 2, a plan to introduce the most recent Uniswap iteration to the BNB Chain was presented. It was created by 0xPlasma Labs on behalf of the Uniswap Community after a temperature check in which the proposal received 80% support.
Just 3%, or 30.5 million votes, had been cast as of the writing of this article, and the voting period will end on February 10.
Uniswap controlled by VCs
The move has the crypto community riled and calling for answers from a protocol that claims to be decentralized.
The decision to downvote appears to have been driven by the choice of cross-chain bridge in the proposal. 0xPlasma Labs have preferred Wormhole, whereas a16z is in favor of LayerZero.
“As a result of a very complex discussion and voting on the Snapshot, the community chose the Wormhole bridge for the Uniswap v3 deployment on BNB Chain (with 28M votes),” 0xPlasma Labs noted.
Furthermore, a16z led a $135 million investment round in the LayerZero blockchain interoperability protocol in March 2022.
Decentralization advocate Chris Blec commented, “anti-competition cartels in DeFi are REAL.” Following the vote, Binance boss Changpeng Zhao said:
“On chain voting just means the large whale(s) control the blockchain then. Just like shareholders.”
UNI Price Outlook
Uniswap’s governance token lost 3.9% on the day. At the time of writing, UNI was trading at $6.91 following an intraday high of $7.30.
The token has failed to gain much momentum during the January rally gaining just 25% over the past month.
UNI prices dumped below $5 following the FTX crash in November and have remained relatively flat since mid-August. Furthermore, UNI is still down 84.6% from its May 2021 all-time high of just under $45.