Consensus Check - UNI should fund a political defense organization for decentralized finance (copy)

Note: Copying over from Proposal Check to ensure its in the correct section to facilitate discussions

This post outlines a framework for funding regulatory and political defense of the decentralized finance ecosystem with a grant from the UNI Community Treasury. We will refer to this fund as the DeFi Defense Fund here, which can be set up as a 501(c)(4) in the US for the greatest flexibility, accountability, and benefits.

The temperature check showed massive interest in the topic and almost two-thirds of the votes were in favor of moving forward. The biggest concern—raised by those both voting yes and no—was the lack of precise details. We planned to unveil more details in the Consensus Check as the next stage in this process, and do so here. We address the other concerns raised at the end of this post and plan to respond to concerns as they come up during this Consensus Check.

This proposal is both a response to external threats and a preemptive action taken to ensure the sustainability of Uniswap—and DeFi more broadly—for the long-term. Decentralized finance is increasingly under regulatory scrutiny, and we need to defend the ecosystem, its democratizing potential, and its decentralization ideals. To date, decentralized non-custodial protocols have logically been exempted from regulatory obligations designed for custodial financial intermediaries. But now governments and international organizations are considering policies that may halt the innovation, expanded access, and transparency it enables.

Similar organizations were essential to protecting the Internet from regulatory threats that would have destroyed the internet’s potential long ago. Over the decades, legal advocates had to win the US Supreme Court case “Reno v. ACLU” in 1996 (without which most websites would have had to verify that their viewers were over 18 and exclude minors), the Comcast-BitTorrent case in 2008 (without which the largest cable companies would have continued to block peer-to-peer protocols), the SOPA/PIPA bill in 2012 (which, had it passed, would have stifled web 2.0 by targeting platforms for user-generated content), and even the Apple-FBI case in 2015 (where the US government asserted the right to force companies to write new code for increased surveillance). Without these and other wins–by lawyers, advocates, and technologists–the internet could have never reached its potential.

As the most prominent and successful automated market maker protocol, Uniswap will not only receive legal and political questions but also will be well-positioned to lead the defense against rushed proposals that would restrict individuals’ ability to use DeFi protocols or attempt to obligate governance token holders to adopt changes that would fundamentally undermine the promise of decentralized finance.

We recommend that Uniswap governance allocate funds to set up a 501(c)(4) “policymaking machine” with the goals of 1) preempting regulatory, legal, political, and tax threats to decentralized finance; 2) achieving regulatory clarity for decentralized finance and related activity; 3) advancing laws that support decentralized finance and decentralized governance; and 4) spurring other DeFi protocols’ governance bodies to contribute to the effort (through this organization or their own).

The DeFi Defense Fund would fund all of the following: 1) Thought leadership: we need more think tanks and academics to write policy white papers, articles, and op-eds explaining the benefits of decentralized finance; 2) Legal firepower: we need to develop strong legal arguments ahead of enforcement actions or new regulations that threaten DeFi; 3) Top advocates: we need more people directly educating legislative and regulatory policymakers about DeFi and advocating for policy positions that favor DeFi; 4) Messaging: We need to better formulate ideas, prepare spokespeople, and communicate to policymakers and the general public the promise of DeFi; 5) Grassroots advocacy: we need to make it easy for individuals who already care about DeFi to voice their opinions to Congress and regulations. Advocacy campaigns usually require a combination of all of these working in concert.

Due to the importance of this work to the Uniswap community and the cost of doing this work well, we propose funding the DeFi Defense Fund with 1M UNI tokens. We expect the committee to allocate these funds over 4-5 years.

Outline of this post

  • The regulatory threat
  • Doing nothing is not an option
  • The Uniswap community is best positioned to lead the effort to protect decentralized finance
  • About the DeFi political defense organization
  • Addressing questions raised in the Temperature Check
  • Snap poll

The regulatory threat

Governments’ financial supervisory regimes are generally based on the regulation of financial intermediaries (think banks, stock exchanges, money transmitters, etc.). To date, decentralized finance protocols like the Uniswap protocol have generally been excluded from these regulatory regimes because users of the protocols retain “total independent control” over their assets and the protocols have been treated more like the Bitcoin, Ethereum, or HTTP protocols. For example, in the United States, the Financial Crimes Enforcement Network (FinCEN)—the agency responsible for implementing the Bank Secrecy Act—has said that when a cryptocurrency “…trading platform only provides a forum where buyers and sellers of [cryptocurrency] post their bids and offers and the parties themselves settle any matched transactions through an outside venue (either through individual wallets or other wallets not hosted by the trading platform), the trading platform does not qualify as a money transmitter under FinCEN regulations.” This conclusion makes sense and is worth defending.

Unfortunately, governments and international organizations are considering whether to move away from this relatively clear delineation of what is and is not a regulatable activity and essentially seek to “shift the goal posts” in order to capture decentralized finance protocols—and their governance token holders—as “regulatable entities.” For example, the Financial Action Task Force (FATF), an international organization that aims to coordinate countries’ anti-money laundering regimes, essentially suggests that decentralized finance doesn’t exist at all: “Where customers can access a financial service, it stands to reason that some party has provided that financial service, even if the act of providing it was temporary or shared among multiple parties”—such as governance token holders. The FATF suggests also that “…launching a self-propelling infrastructure to offer VASP services is the same as offering them, and similarly commissioning others to build the elements of an infrastructure, is the same as building them.” Switzerland is already proposing to expand the definition of money transmission to include the “enabling” of funds transfers—even when there is no intermediary taking custody of a customer’s funds—and so may capture decentralized financial protocols in their financial supervisory regime (and this definition may even capture Bitcoin and Ethereum).

Doing nothing is not an option

“If we do nothing proactive, governments will develop proposals modeled on TradFi regulation that was developed for different systems in a different time and with wholly different risks. “Doing nothing” will lead to “doing ineffective, irrelevant activities mandated by regulators because they were not yet properly educated.” The enormous costs of this potential future are much less likely to materialize if we invest resources in a defense fund—a modest cost by comparison.

If governance of DeFi protocols is to survive long term, we need to actively engage in the policymaking discussions happening right now to ensure the interests and positions of millions of DeFi users are represented.

The Uniswap community is best positioned to lead the effort to protect decentralized finance

Decentralized and non-custodial exchange over the internet is a net benefit to society that should be embraced by societies seeking to advance economic flourishing and individual liberty. The Uniswap protocol is universally recognized as the leading and most successful automated market maker protocol in the DeFi ecosystem. Uniswap v3 and v2 each have more volume than any other automated market maker protocol. The broader Uniswap community includes many of the crypto ecosystem’s most thoughtful leaders, both institutions and individuals, and the community prioritized properly resourcing the UNI Community Treasury from day one.

We have the technological leadership, community, and human and financial resources to win this policy debate over the foundational principle underlying not only automated market makers and decentralized finance, but crypto generally.

About the DeFi political defense organization

In light of the expense of hiring sophisticated lobbyists, lawyers, and experts, and in light of the urgent threat we see from poorly informed regulatory proposals globally, we recommend an initial infusion of 1 million UNI (less than one-quarter of one percent of the treasury). This entity will not replicate the great work of existing organizations such as Coin Center, Fight for the Future, the Blockchain Association, the Crypto Council for Innovation, the Defi Alliance, Blockchain for Europe, or others. Rather, it would fund these and other organizations to expand their capabilities to be able to more effectively protect DeFi. It would fund across areas including thought leadership, legal analysis, policy advocacy, messaging, and grassroots.

Further, this fund will extend its monetary impact by conditioning some of its grants with matching by other governance treasuries, crypto foundations, or crowd-matching.

Grants administration for political spending is a subjective process that cannot be easily automated, and thus we propose a grants committee overseen by an accountable entity. This committee would hire a grants-making leader or staff and create an efficient, predictable process for applicants.

We propose the following as committee members, with a subset of them serving as the entity’s board of directors. All have expressed their willingness to join the committee:

  1. Jake Chervinsky , General Counsel, Compound Labs & Strategic Advisor, Variant Fund. Jake serves as general counsel at Compound Labs and as an adjunct professor at Georgetown University Law Center.
  2. Larry Sukernik , co-founder, Reverie. Larry co-founded Reverie to steward the development of DAOs. Previously, he was an investor at Digital Currency Group.
  3. Rebecca Rettig , General Counsel, Aave Companies. Rebecca is a well-known DeFi lawyer who has advocated before government bodies around the world. Aave is based in Europe so she can help ensure connectivity with European based groups.
  4. Marc Boiron , General Counsel, dYdX Trading. Marc is a DeFi attorney who has designed the regulatory strategies and DAO structures for many of the leading DeFi protocols in addition to having educated regulators on DeFi.
  5. Marvin Ammori , Chief Legal Officer of Uniswap Labs. Marvin has spent his career advocating for new technologies from the internet to DeFi. He has served as a board member of multiple advocacy nonprofits.
  6. Katie Biber , Chief Legal Officer of Brex, Board of Directors of Anchorage. Katie is a fintech and crypto leader and political superlawyer who served as the General Counsel of the Mitt Romney presidential campaign in 2012.
  7. Sheila Warren , World Economic Forum, Executive Committee (Cryptocurrency Lead). Sheila is trained as a lawyer who used to represent 501(c)(4) nonprofits such as Planned Parenthood and the ACLU. She now convenes experts on cryptocurrency regulatory issues at WEF.

These committee members skew towards legal advocates for their expertise in policy formation and analysis and towards US residents as the US plays an outsized role in global financial regulation.

We expect that some members will be able to serve pro bono and that the total compensation across the entire committee will be less than $150K per year. Due to the dynamic and somewhat unpredictable state of global policy proposals, we believe the grant-making committee should have considerable discretion, subject to the necessary disclosure of its activities.

Addressing questions raised in the Temperature Check

Some concerns were raised in the Temperature Check.

  • Will a student group control these funds? We propose the committee named above, which includes some of the top thinkers and lawyers in DeFI across multiple top projects. In Temperature Check, several people assumed that the Harvard Law Blockchain and Fintech Initiative would control these funds, and we should have been clearer that this was never the intent of our proposal.
  • Why isn’t the budget small? Top lawyers, lobbyists, and educational public relations campaigns are very expensive. When the US Treasury Department proposed a “midnight rulemaking” in December, blockchain advocacy organizations were forced to spend millions in just a few months on agency comments and prepared litigation. Given the complexity and novelty of these issues, we need the world’s best talent, and many of them are paid more than professional athletes. The committee will be best positioned to allocate these funds dynamically in response to threats and opportunities. Given the current proposals, the industry needs funding sizable enough to support the multi-front campaign on multiple issues.
  • Considerable transparency will be ensured. There are considerable public reporting requirements for both 501(c)(4) organizations–regarding grant size and recipients–and also separately for any lobbying expenditures. Further, we expect this committee (and independently others in the community) to provide plain language summaries of these disclosures. Board members of 501(c)(4) organizations are also fiduciaries required by law to act not in their own interest but in the organization’s best interest.
  • Free-riding can be mitigated but is not worth any upfront delay. In this ecosystem, many of us get to free ride off of one another’s software contributions (e.g., Uniswap governance is a fork of Compound governance, all of DeFi benefits from Ethereum development). Groups also free-ride off of policy contributions. DeFi has benefited from expensive and time-consuming efforts of Coin Center, the Ethereum Foundation, and others as they educated policy makers and defended Bitcoin and Ethereum against attacks for many years. As noted, we expect the committee over time to condition grants on matching funds raised by other affected communities. Further, more funds will be needed over time if DeFi continues to grow—just as internet freedom organizations such as the Electronic Frontier Foundation remain busy and have expanded over time—and we expect other communities will contribute as they wake up to additional threats and rushed proposals targeting them directly. The need for this funding organization is too urgent to delay over negotiating free-riding concerns, and we expect those concerns to be mitigated in months, not years.
  • The grants would go far beyond lobbying. Nobody likes lobbyists. We get it. But to properly educate policymakers in a way that defends DeFi, the organization would provide some funding to lobbyists and more to the workstreams described above: (1) thought leadership, (2) legal firepower, (3) top policy advocates (some of whom would be “lobbying” on specific bills and some would be more generally educational), (4) messaging, and (5) grassroots advocacy.

Link to the snap poll : Snapshot


It was indeed confusing that a proposal, already open for votes, was titled “Consensus Check”.
Maybe it would be wise to not skip the consensus exploration stage, and really, meaningfully engage in it. I guess that would require that you remove the voting prospect altogether for now, and avoid the extreme urgency aesthetics (as if something spectacular could be done on the next day upon voting “yes”) when consensus for 30M is sought. At least until the community has indeed had a chance to explore consensus and assess the implications of this on several levels.
People may not know what to vote. The “Give 1 M UNI to an NGO that has not been formed yet and without even a sample institution document ready to indicate its structure, decision making process etc” or “do nothing for DeFi” is a pseudo-dilemma. The “do-nothing” option averts those who want to say no from engaging in the voting procedure, because the “do-nothing” does not express their stance. Maybe a “not like THAT” option would be more appropriate. I would vote for "in the right direction, but a lot more needed for saying yes to (part of) it.
I definitely believe something should be done to defend DeFi but the proposal, as it is presented, is unacceptably -even shockingly- vague. As paired to the extremely high sum sought for, a “skip the step of consensus” move, together with the numbness associated to the high sum sought for, might resemble a coup.
Many questions arise and deserve answers for people to engage in an enlightened manner in acts that affect their situation, their UNI and that of UNI as a whole.
You actually say that these few people will be controlling the money to give it to projects and lobbyists. Well. Why can’t the community do that directly, when projects of interest are brought for support?
How much will the NGO registration cost and how long will it take for it to function properly? Where will its offices be? Will it have offices in other cities or continents? How much will these cost? A breakdown on basic expenses would be useful.
How will people enter the NGO as members? What are the requirements? For example, if I want to be a member, will I be able to?
How will they vote about what happens with UNI’s 1 M (or whatever)? Will the BD be steady or new persons entering might overturn it and take control of the funds’ allocation? If a member of the BD does not act in alignment with the aims, what will happen? Will other members be proposed as replacement? Will that be the case in advance? Who will have responsibility for the NGO’s potential debts?
How will the finances of the NGO be checked? The allocation of funds will be approved by the community or the plan is to put aside some millions and completely trust the BD for their allocation without requesting approval on the road?
Btw, “Paying or hiring politicians” to do this or that, can be seen as illegal or outrageous. Anyone who has access to this page might use this in a not so nice manner. It definitely cannot be part of a statute, as a means to promote an aim. Lobbying is not bribery, of course, but it does have, in many jurisdictions, complex rules. It may leave a door half open to harassment and have legal implications not only on those engaging in it actively, but also on those funding it.
Mobilisation for DeFi Defense is in the right direction. But it is not ok that the project is promoted in this manner and the community pressurized to decide “yesterday”. You are asking the community to trust your project blindly. However, this may affect their rights and obligations, as well as their assets. You have to be far more specific and document the costs.


@HarvardLawBFI I don’t know or care who any of you are, or what your intentions are.

You say you want to help yet you bring in one of the most corrupt people Sheila Warren who has connections to the World Economic Forum which have constantly stated they want a “Great Reset” of the entire world. Essentially creating an Elysium where the Elites have luxurious life styles and the rabble will own nothing and be happy.

No we need to fight against this, just made a video on this to reach as many people as possible. We got to bring everyone to fight against the machine, we did it with $GME and $DOGE now we got to do it here.

Who ever reads this, DO NOT just read what these authoritarians say. The road to hell is paved with good intentions, look at who they are bringing on and their past history.

If we let this happen they will go after AAVE, COMP, DY/DX, and other protocols. Eventually centralizing the entire ETH network.

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ConsenSys will be supporting this proposal - which we view as one of the best initiatives to date. As an organization, we’ve been engaged in some form of policy/advocacy, either directly or indirectly, since early 2016. Our efforts have historically taken several forms, namely direct advocacy through our own contracted policy experts, industry associations, or self-advocacy. Though useful in some contexts, we found the first two modalities of advocacy miss the mark in terms of our aspirations. Contracted policy rarely works well because our industry is complex and the technology moves so rapidly. For this reason, you spend a lot of time educating your own advocates and by the time they deliver the message the goal posts have already moved. Industry associations are terrific for very big picture items, but less fantastic for nuanced policy, particularly when you have the biggest backers of industry associations largely being centralized exchanges and bitcoin supporters, whose policy goals are at times inverse to that of DeFi/Ethereum. There is also an issue of attention span for those industry groups, and DeFi advocacy is not a trivial amount of work - it’s something requiring intense focus.

We see this initiative as checking a number of boxes. Chiefly, those who will be tasked with the advocacy are themselves the foremost legal/policy experts on the technology itself. Second, I do not see concerns of competing interests or advocacy points. There are underlying thematic points of agreement among all participants - and the group should be able to work in unison to achieve a collectively beneficial outcome. Third, time is of the essence on these issues. At ConsenSys, we believe education to provide understanding to lawmakers is of critical importance at this juncture - particularly as we creep towards true aspirational “main street” use of our technologies.

Lastly, as communicated by @marcboiron - the non-profit structure will be hugely beneficial to concerns around use of funds. There should be supreme transparency due to that. Though not an expert on these things, we did a bit of analysis when forming the Enterprise Ethereum Alliance and there are some benefits to a 501(c)(6) that may also be worth exploring.

In sum, this is a terrific effort and Uniswap taking the first step could break the flood gates of other large treasuries supporting this (or similar) initiatives. In my view, the two best uses for community funds are 1) things that drive real life use of the technology, and 2) simultaneous advocacy. Therefore, we will be supporting this and have already communicated to our portfolio companies our wish that they consider doing the same.

Matt Corva, General Counsel for ConsenSys Software Inc.


The community at Penn Blockchain will vote yes on this proposal. However, we believe there are some issues that must be raised and deliberated over before integrating this proposal into Uniswap:

  • There needs to be specific details on reporting to $UNI holders/measures to make operations transparent. Though the US Government may mandate reporting requirements for 501(c)(4) organizations, there has to be a mechanism to ensure tokenholders receive these reporting requirements—not everyone knows how to navigate through SEC filings. One idea might be to report the group’s spending/initiatives/activities on a monthly/quarterly basis via e.g. a Medium article.
  • There needs to be a specific breakdown on the lock-up and release schedule of the 1M in $UNI allocated to the grant. Right now, details are vague (4-5 years), without a precise understanding of how much money the committee will have to work with at certain points. Also, a discussion should be had about whether the absolute amount will be refined if funding requirements differ from expectations.
  • Specific proposals for actionable utilization of capital should be discussed before execution of proposal. For example, more details about how outreach to other DeFi communities will occur would be greatly appreciated.

While I appreciate the need for this work, there are two main problems with the ask as it is currently framed:

  1. The amount requested is simply too great, and it is not consistent with responsible treasury management. While I agree long-term the amount could be considered reasonable for these requirements, it is too much to ask for upfront without having phase-gates / milestones for demonstrated impact, and with oversight under the committee model, only one Uniswap Labs employee would be involved. Further, the proposal articulates no on-going accountability mechanisms tied to Uniswap governance. It’s not hard to imagine an effort like this starts with funding from Uniswap and quickly diverges from needs tied to the protocol / project over the course of a few years. I would propose that instead a budget for one year of operation be allocated (i.e., ~1/5 of the requested amount of UNI), with follow-up requests each year as appropriate. IMO, this would be a more reasonable ask than requesting ~$30M of UNI upfront.

  2. During that one year period, a key part of the operating plan should be to bootstrap funding from additional DeFi projects. On the proposed board, I see leaders from several other projects. The goal should be to solicit funds from each of these DAOs (and others) so this effort represents a consortium effort across DeFi. I would also be open to an effort more focused on Uniswap; however, the way in which this proposal is written is still quite broad focused on lobbying needs across DeFi.


We believe the optics on this proposal could be improved by giving context on similar cost items, and that more accountability is desired here in the proposal which so far mentions an oversight committee. That being said, Blockchain at UCLA will support this proposal as we believe the benefits outweight the risks.

Coordination among influential individuals in the corporate legal setting to champion a defi project such as Uniswap would bring value to the ecosystem as a whole, and this is a good first step towards that vision. Frontier industries which rapidly gain mainstream adoption will undoubtedly experience growing pains, not to mention regulatory risks when considering a topic such as decentralizing finance. Judgement will inevitably be cast upon the industry, the question is whether or not it will be favorable.

In terms of allocation, there is 172m UNI scheduled to be allocated in the first year alone to the treasury. We believe 1m UNI, while risky in its current format, is a reasonable enough allocation for the intent of the proposal.

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The proposal is a good one. But predetermined membership of the select committee is somewhat dubious or fishy. If the proposal should pass, governance token holders should be allowed to vet and confirm it’s members after a rigorous process. The price tag in Unis is also uncalled for, 1 million uni could translate to billions of dollars in the nearest future hence giving rise to waste, bloated budget and ultimately corruption. Rather, funds should be allocated to the committee as the needs arises.

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I purposely didn’t comment on the size of the funding, but I do want to flag that doing this effectively will cost a substantial sum. To put it in perspective, upon a quick search, it looks like each major bank discloses approximately ~3MM in policy spend per year, and that’s what is reported. That’s not to say that the number proposed is correct or incorrect, but just to put real life costs to what otherwise might seem like a big number. You then take the inherent costs/what TradFi is spending/will spend to prevent displacement and you can quickly get to a perspective that this effort will require a significant budget. I understand that people may not view it as an “efficient use of capital” - but that doesn’t mean that what it costs to play the game goes down.


First. Can those making the proposal ensure that a great part of these Uni are not going to be spent on taxes? (which would be avoided if Uni directly paid the service providers) Why does there need to be an intermediary to pay for these services? The political committee could be making the proposals for hiring etc.
Second. It’s US concentrated, this proposal. While US will ultimately have to discuss with several other players because cross-border payments are the major catcher in the discussion and it is cross-border regulation that will be promoted for mass adoption. Why a one country concentrated approach?
Strategically, other countries would be easier to influence in DeFi’s favor than the US. Countries which will sit at the table when cross-border regulation is being discussed.
Third. A rights perspective is missing.
Fourth. Several questions I asked have not been answered. A “proposed sample statute” should be uploaded so that we can comment on it.


@Amaobison - I don’t think it’s a good one, but the concept of defending DeFi is in the right direction. To become a good one it must become much more concrete, be based on an impact assessment (incl. tax treatment), involve actors from several other jurisdictions -become more inclusive and decentralized; the committee should have a strong consultative role on where the funds should go and not one of distributing funds itself. Ideally, it would be a joint endeavor of several DeFi projects or a separate one, that DeFi would collectively embrace.


Re-posting my thoughts here–in short, good cause & good lawyers, bad method of advancing that cause and funding those lawyers’ work. Accountability, transparency and openness/inclusivity are musts for any project that a DAO funds. Lawyers also do not know better than devs, investors and users what the right policies and regulations are, and they should not be enabled to decide strategies, tactics, statutes, which cases to throw their support behind, etc. without being in a continuous, binding feedback loop with these more important DeFi constituencies.

Even regulators are more open than this group seems willing to be. Hester Peirce posted her recent safe harbor proposal on Github for anyone to fork and comment on and be creative with. That is the right way forward–not elitist lobbying/lawyering behind closed doors. This group is claiming they will be accountable because they will have duties under the non-profit structure, but of course those duties flow from what the charter of the non-profit says–we don’t even have a draft of that. So there basically is no guaranteed accountability to this DAO or even to the cause of DeFi as such.

More here:


Re-positng here from the other (non copied chain)

Most law school students take a class called “Corporations.”

The key innovation behind the corporate is the separation of ownership from control – i.e., the shareholders own the company, but the board and management directly control it.

This leads to the key problem you study in a law school corporations class: how do you regulate the actions of the board (and management) when they are not the owners of the company, and can potentially do things that help themselves, but screw the shareholders?

Usually, the ** bedrock principal is that the board should act on behalf of the owners. In fact, it has fiduciary duties to act that way under Delaware and most state corporate laws.**

Most of the case law you study revolves around this issue. For example, if the chairman of the board wants to take the company private, how do you set up the process? Or, if a member of the board wants the company to do a deal with a related party, how do you regulate that?

The usual answer is through hard and soft regulation, including forming a special committee that does not include the interested board member, securing fairness opinions from banks and accounting firms, and following a number of protective processes to prevent abuse.

For a governance token, this is probably supposed to play out with the members of the DAO or the management listening to what the governance token holders direct.

So, what is going on here?

[Removed picture of HLSBFI saying on Twitter that regulators won’t listen to token holders…and positioning themselves as who regulators will listen to]

What is my governance token worth …

… if an interested party can propose and lead the vote to take funds from the treasury?

… if the people who are directing the funds are opening saying the budget’s targets will not listen to what we, as governance token holders want?

So, @haydenadams -

Does HLS Block Fi work for Uniswap governance token holders? Uniswap equity holders? Or for themselves?

How about after 1m Uni are drained from the Uniswap treasury and placed in a separate fund that none of us (including you) have any control over, and is proposed to be created with literally no governance?

This would stink to high heaven under Delaware corporate law. And HLSBFI surely knows this.

Then, of course, there is the size of the budget. It is more than Uniswap has spent to build it’s entire product. It is 10x what a major bank has disclosed as its lobbying budget in a regulatory filing.

We both deserve answers here.

And we deserve to delegate our votes to a party who works for Uniswap’s token holders. Not for themselves and the people related to them


Taxes are huge and it has to be addressed. I am amazed by just how overlooked electra´s points are. Its simply astonishing to say the least. Give this man the answers he seeks please.


From what I can sense, there are not going to be any answers about these concerns sometime soon, and at least not before the project is approved. Then we may see more clearly what happens.

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From what I could find on the IRS website combined with my limited knowledge of the taxation of non profits in the USA, I got the following information

To be tax -exempt as a social welfare organization described in Internal Revenue Code (IRC) section 501 ( c)(4 ), an organization must not be organized for profit and must be operated exclusively to promote social welfare. … For information about applying for exemption, see Application for Recognition of Exemption

Now, I do not know whether DeFi educational fund falls into the spectrum of social welfare. It may, it may not. This form of non profit allows the members to conduct considerable amount of lobbying though. However, there is a caveat to it. 501 ( c)(4 ) main activity cannot be lobbying solely. So in this case, the DeFi educational fund would have to classify its main activity as something else than purely lobbying. This might result in additional costs? I mean, this is just such a huge undertaking that I am starting to think its futile for Uniswap to take on this challenge alone. I like the core idea, but the execution of the idea is just insanely hard, costly, and protracted. This should be a stand alone project with separate funding etc.

So all in all, if they manage to get the 501 (c)(4), I dont think taxes could be applicable

the donation is happening now though…not sure it can be tax-exempt if the tax-exempt org doesn’t even exist yet…

Im not sure I understand your point fully.

He means it’s weird, because the donation is not, at the moment it will be approved, made to an already formed legal person but to one that would intend to be formed in the future. As it is now, it looks more like a trust fund than a donation to a non profit. Which fall under different legal provisions and have different fiscal treatment in most jurisdictions. However, I don’t see the main problem there, but to the activity, the true aim promoted by the non profit. If a legal person engages in lobbying, then the activity may not be tax deductible and the true aim of the organization may be deemed as latently promoting profit. It is not so difficult to assume that, since anyone can have access to the discussions here. This is why we said it is important that those promoting the proposal inter alia present an assurance that part of the fund will not be consumed by taxes. I am still waiting for an answer to this question, but I don’t see any. A sample charter should also be presented, so that we check it out. I guess they will do it at the next stage. Or they are too certain that the funds can exit the Uniswap budget without much info being diffused, in which case many of us will draw the inferences we deem appropriate…
On the other hand, this is also why I insisted that the “rights & freedom” approach is important to be pivotal (and that the lack of any such specialists in the BD is striking). Because it will be really difficult for any State to tax a non profit for an activity promoting and upholding fundamental rights and freedom (or engaging in education), even if it involves lobbying.


A US non profit tax specialist should say that, not you and me.

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