Venture capitalists at Andreessen Horowitz (a16z) could control at least 41.5 million and likely over 55 million Uniswap (UNI) tokens. Globally, there are 753.7 million circulating UNI, and if a16z does indeed hold this number of tokens, it would allow the firm to unilaterally reach quorum for voting on Uniswap proposals.
Analytics provider Bubblemaps alleges that a16z controls 11 wallets with 41.5 million UNI. That figure surpasses a critical 4% threshold of UNI’s supply for voting purposes. Additional reporting by CoinDesk increases the estimate of a16z’s holdings to above 55 million, including the firm’s delegated holdings. What’s more, a16z retains the right to revoke that delegation and resume voting control over all 55 million tokens.
The founder of 0xPlasma Labs, Ilia Maksimenka, submitted a proposal to deploy Uniswap on Binance’s BNB Chain. Ilia reasoned that deploying the decentralized exchange on BNB Chain would enable Uniswap to gain a new audience and boost DeFi adoption. That proposal quickly became hotly contested.
DeFi analytics provider Treehouse highlighted that proactively adding Uniswap to BNB Chain would give Uniswap a competitive advantage over a possible competitor forking the code when an important license expires in April 2023.
a16z used 15 million tokens to vote against the proposal. Ilia’s proposed addition of Uniswap to BNB Chain would have used Wormhole as a designated bridge instead of LayerZero Labs. a16z had previously led a $135 million funding round in LayerZero labs.
a16z’s attempt to block the proposal failed, with 65.89% of overall votes in favor of the proposed addition of Uniswap to BNB Chain. Despite its failure, it highlighted the outsized influence that investment firms could have on supposedly decentralized apps.
Indeed, even Binance CEO Changpeng Zhao (CZ) commented on the possibility that Uniswap may not be all that decentralized.
Delegated tokens may partially explain a16z’s failure to block the proposal. Uniswap makes it possible to delegate voting to another party. a16z had delegated about 25 million UNI to third parties that supported the proposal — likely against the VC firm’s wishes.
The failure to nix the proposal may not have sat well with a16z. Understandably, it suffered accusations of pumping UNI soon afterward. Some argued that buying pressure originated from a16z snapping up enough UNI to ensure that such an embarrassing failure doesn’t happen again.
a16z controlled 41.5 million Uniswap tokens at the time of the vote on Ilia’s proposal to deploy Uniswap on BNB Chain. It used the 15 million tokens in one of the wallets to vote against the proposal because it suggested using a competitor for one of the organizations in its portfolio.