DeFi projects have flourished in 2020. There’s just one problem: questions are being raised about how decentralized some of these platforms really are.
As reported by Cointelegraph in September, Uniswap came under scrutiny after it emerged that its team, investors and advisors had been allocated 40% of all UNI tokens. To make matters worse, it appeared that these assets were not locked.
Glassnode also criticized the project’s governance, as proposals can only be submitted by those who possess 1% of the entire UNI supply. By its estimations, there’s just one entity that can meet this requirement without embarking on some extensive lobbying: Binance.
Now, a new decentralized exchange is aiming to shake things up — and empower community members in a way that other platforms don’t.
WhiteBIT says its team of developers have been working in the cryptocurrency market for the past five years — adding that its new DEX, WhiteSwap, aims to lower barriers to entry for participants so getting involved in DeFi is no more complicated than setting up an email account.
WhiteSwap is an automated market making decentralized exchange that’s currently based on the Ethereum blockchain, and it forked from Uniswap V2.
In contrast to Uniswap, where just 60% of UNI will go to community members, WhiteSwap plans to give 87% of its governance tokens to participants in its ecosystem. The DEX’s smart contract code can be upgraded through governance votes — and a cross-chain solution is going to be implemented as soon as possible to enhance functionality.
The platform has already initiated the first liquidity mining phase, paving the way for 4.5% of the genesis mint to be distributed. It’s hoped that the community will take over the governance process once this phase concludes in mid-January, putting them in control of how remaining tokens are released in future.
Vladimir Nosov, the CEO of WhiteBIT, told Cointelegraph: “The DeFi (DEX) market has two weaknesses: the first one is that projects are not truly decentralized, and the second one is that there are very few decent smart contract developers on this planet. WhiteSwap aims to fix this: we’re completely decentralized.”
WhiteSwap’s governance token is known as WSE. One billion have been minted at genesis and they are set to become accessible over the next four years. This means that, between now and 2024, 870 million WSE are set to be allocated to community members. WSE is set to be listed on major exchanges in the near future.
A public schedule has been released that shows how WSE will be vested to the community treasury. In the first year, 40% of this supply will be released — 348 million tokens in all. This will decrease to 30% in the second year, 20% in the third, and 10% in the fourth.
To ensure that governance runs smoothly, 0.5% of WSE’s total supply on a delegated basis is required to submit a proposal. In order to achieve a quorum, 4% of WSE’s supply must back the proposal in question. Votes will take place over a seven-day period, and there will be a two-day timelock before execution.
As reported by Cointelegraph earlier in November, WhiteBIT has recently become one of the few exchanges worldwide to offer a margin trading terminal. The company’s goal is to cater to underserved markets in the Commonwealth of Independent States and Europe.
At the time, Nosov told Cointelegraph: “Now is the time when we are able to build the right bridge between centralization and decentralization, and between the cryptocurrency market and banking industry, to digitize and enhance all financial products.”
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