Concern as Uniswap-backed 'DeFi Education Fund' dumps $10M worth of UNI
The controversial Uniswap-funded DeFi Education Fund has liquidated half of its donated funding into stablecoins, attracting condemnation from many in the crypto community.
On June 12, the fund tweeted that it was selling 500,000 UNI to Genesis Trading for 10.2 million USDC in an over-the-counter (OTC) trade, despite the Uniswap proposal for the fund indicating it would liquidate the 1 million UNI over four to five years.
In May, the student organization, Harvard Law Blockchain and Fintech Initiative, launched a governance proposal advocating for the creation of the fund and allocation of 1 million UNI (worth roughly $18 million at current prices) to the entity to support educational initiatives and policy lobbying for the decentralized finance sector.
At the start of this month, the proposal was passed and the UNI tokens were transferred to the fund.
The incident has reignited concerns regarding the centralization of Uniswap’s governance process, and called into question the transparency and motives of the fund.
Blockchain sleuths were able to identify that Larry Sukernik, one of the multi signers behind the education fund, had sold 2,612 UNI just a few hours prior to the OTC deal. On Twitter, Sukernik defended the trade, stating the UNI he sold was from a grant he'd only received a few weeks earlier.
On-chain history doesn’t tell the full story 1. The UNI I sold out of my address was from a grant a group of us received a few weeks back. *Just* noticed we received it so sold it for USDC to send it to people2. The UNI for DEF was already sold by the time of the above sale— Larry Sukernik (@lsukernik) July 13, 2021
Speaking to Cointelegraph, DeFi Watch founder, Chris Blec, emphasized that Harvard Law had made it clear “the intent was to to gradually sell the 1m UNI over a 4-5 year period, and not dump large amounts at once.”
“The Fund then just sold 50% of the 1m UNI for USDC without explanation. They still haven't explained why, despite hundreds of people asking them today,” he added.
On July 13, Blec posted a governance thread demanding transparency regarding the fund, expressing concerns regarding the voting process surrounding the proposal, the creation of the fund, and the possible role of Uniswap investor, Andresson Horowitz (a16z), in influencing the events.
“The DeFi Education Fund committee members, the Uniswap core team and its investors (including a16z) have refused to answer any specific questions posed to them about the fund’s origins, who came up with the idea, how future policy will be derived, and more,” Blec wrote, noting that a letter he sent to Andressen Horowitz had been “willfully ignored.”
“After the vote finished and the Fund was created, I sent a new set of questions on June 29 to a16z, as it appeared that the vote only won due to governance delegates using voting power given to them by a16z. These questions were also willfully ignored.”
Blec also called for Sukernik to stand down from the fund’s committee, telling Cointelegraph: “Even if it was unintentional, the appearance of a member of this committee selling UNI tokens from his own account just hours before triggering a massive 500K UNI sale is exactly the type of behavior that would trigger a regulator.”
“It would send the right message if Sukernik resigned from the committee and allowed someone else to take his place.”