The DEF’s ask is ~0.2% of the Treasury.
That is one way to look at it. The other perspective is that the liquidity depth for UNI is very shallow. The total value locked (TVL) for all pairs is about $34 million for UNI, according to Uniswap.info. The bid side is even worse; if $7 million worth of UNI is market-sold, only $3 million USD would be received. In other words, the ask of this proposal represents 60% of on-chain liquidity, which is a significant request. Even if sold through off-chain market makers, it will have large impacts, either now or in the future.
This is why it’s very important to get the backbone of the protocol, i.e., liquidity providers, involved in governance. Everything done here is at their expense, from funding the Uniswap Foundation, Grants, liquidity provisions, fee switch, funding the DEF, and more.
More needs to be done to address the utility of UNI itself if we are to view ourselves as an open public good pocketbook.
A few ideas in the past that were supposed to address this have gone silent/forgotten:
UNI as an oracle token, by Vitalik
https://gov.uniswap.org/t/uni-should-become-an-oracle-token/11988
UNI as a base token pair/credit facility, by mjc716
https://gov.uniswap.org/t/a-completely-new-uni-token-model-for-v4/21647