Ethereum solutions provider ConsenSys has pledged support for a Uniswap governance proposal to set aside tokens for a new decentralized finance (DeFi) fund for political lobbying.
The proposal was made on May 27 by the Harvard Law School Blockchain and FinTech Initiative for the creation of a fund that would finance existing and new political groups engaged in crypto policy-making and lobbying to defend DeFi against regulation.
The Harvard Law BFI proposal cited concerns that governments around the world may try to regulate DeFi without proper education and suggested a fund of 1-1.5 million UNI. It ledged more than 10 million tokens in support of the idea. The proposal is headed towards a full vote.
General legal counsel at ConsenSys, Matt Corva, stated that educating lawmakers is of critical importance at this juncture, “particularly as we creep towards true aspirational 'main street' use of our technologies”:
“In sum, this is a terrific effort and Uniswap taking the first step could break the floodgates of other large treasuries supporting this (or similar) initiatives.”
Calling it “one of the best initiatives to date”, Corva stated that the firm had been engaged in some form of policy and advocacy, either directly or indirectly, since early 2016. He added that the two best uses for community funds in his view were things that drive real-life use of the technology, and simultaneous advocacy.
“Therefore, we will be supporting this and have already communicated to our portfolio companies our wish that they consider doing the same.”
According to the firm's investment arm Mesh, portfolio companies include crypto lending platform BlockFi, security firm Quantstamp, scaling solutions provider Starkware, and DeFi protocol Compound Finance, which may be able to tip the voting balance.
The DeFi political defense fund will target the Biden administration’s 2020 budget proposal, which includes a potential expansion of crypto asset reporting requirements, among others.
The Uniswap governance proposal has been controversial since many disagree that a single organization and a handful of lawyers should decide how to deploy lobbying funds for the rest of the community.
Pseudonymous crypto-influencer DCinvestor remained skeptical, stating that the amount requested was “simply too great”, and it is not consistent with responsible treasury management.
Uniswap governance process involves three stages: a “temperature check” vote requiring 25,000 UNI to pass, a “consensus check” vote needing 50,000 to pass, and the final vote needing a quorum of 40 million UNI to pass.
The snapshot reported that there were 34 million votes for and 17.8 million against in the “consensus check” stage meaning that it will now move to a full vote.
According to Etherscan, there are a number of UNI whale addresses holding more than 10 million tokens and ConsenSys could well be one of them. Its support of the proposal will no doubt be influential on the outcome.