[Re-Temperature Check] - Activate Uniswap Protocol Governance

[TreeEnthusiast]

One year ago the DAO voted

On March 1st the DAO voted for [Temperature Check] - Activate Uniswap Protocol Governance

Following the vote’s overwhelming result of 54.6 YES and only 1,100 NO, there has been no communication since May, even though the crypto regulatory environment has improved with a very supportive SEC and the withdrawal of the Wells Notice against Uniswap Labs, as detailed in their blog post A Win for DeFi ‒ SEC Closes Investigation into Uniswap Labs.

Since the elections and the emergence of a more crypto-friendly SEC, numerous leading protocols in the space have actively pursued fee switch implementations. MakerDAO (Sky), Ethena, Hashflow, Aave, Frax, and Jupiter have all initiated or completed governance discussions regarding activating fee switches to capture value for their token holders. These protocols recognize the current favorable regulatory climate as an opportunity to evolve their tokenomics models and strengthen their ecosystems.

The latest status regarding this was from @eek637 on May 24

Last week, we announced that this proposal would be deployed onchain today. Over the last week, a stakeholder raised a new issue relating to this work that requires additional diligence on our end to fully vet. Due to the immutable nature and sensitivity of our proposed upgrade, we have made the difficult decision to postpone posting this vote. This was unexpected, and we apologize for the postponement. We will keep the community apprised of any material changes and will update you all once we feel more certain about future timeframes.

I’m recreating this temperature check to gather support for an on-chain governance proposal using audited contracts deployed by UniswapFDN a year ago. If the DAO continues to be unable to pass a vote due to a single unnamed stake holder blocking community initiatives, then I believe we should seriously consider renaming Uniswap to “a16z-Swap” to more accurately reflect the parasitic governance theatrics going on.

Should sufficient support be gathered from this Re-Temperature check, we can move forward with an on-chain vote using the steps outlined by @eek637 himself.

@eek637

TL;DR

• The onchain vote to implement this proposal will go live next Friday, May 31. UNI token holders who would like to participate in this vote must delegate their tokens prior to that date.
• This vote lays the groundwork for autonomous fee collection and distribution; additional votes will be required to turn on fees in Uniswap V3 pools.
• We propose a novel mechanism for those future votes which makes fee adjustments more dynamic, reduces the burden on Uniswap Governance, and maintains the protocol’s credible neutrality.

Context
The contracts described in the original post have now undergone three audits and a week-long contest. Generally, there were no high severity issues discovered, very few medium-severity issues, and some minor and informational issues. The exact results of each can be found in the UniStaker repo here with the exception of the latest ABDK audit which will be posted shortly after the report is cleaned up. The codebase will be covered by a $1m bug bounty managed by Immunefi. That program will be live next week and this post will be updated with a link to the relevant information.

A successful Snapshot vote concluded on March 6, 2024 with 55m UNI voting in favor of proceeding with the proposal as described. As a reminder, if passed, this proposal would transfer ownership of the mainnet UniswapV3Factory to a newly deployed instance of V3FactoryOwner. This vote will not turn on fees; that will be accomplished in a future proposal. If fees are eventually enabled, they will flow autonomously to UNI holders who have staked and delegated their UNI in this deployment of the UniStaker contract using the payout race mechanism described here.

How to vote
If you hold UNI and want it to be eligible to vote on this proposal, you must delegate it (either to yourself, or to a third-party delegate) prior to Friday, May 31. To find a third-party delegate, check out the delegate profiles on either Agora or Tally.

To delegate to yourself on Agora, go to the same link, search for your address, and click delegate. To delegate to yourself on Tally, go to this link, connect your wallet, click “Delegate” and choose “Myself”.

One note, if you have used UNI as collateral elsewhere in DeFi (e.g. Compound or Aave), you will not be able to use that UNI to vote unless you close those positions. Post any questions you have in the comments below.

What happens next?
If this vote passes, we intend to propose another upgrade to Protocol Governance to further streamline the fee setting process. Today (whether or not this proposal passes), a full onchain vote requiring quorum would be required for fees to be turned on, and for every adjustment in the future. Over the past few months we have heard feedback from the community and worked with Scopelift to design a mechanism that would upgrade this process in order to:

• Increase the efficiency with which the protocol charges fees by shortening the time and lessening the resources required to adjust them
• Decrease the governance burden on delegates
• Maintain the protocol’s credible neutrality

Assuming a successful result in this first onchain vote, we will post an RFC in the forum fully describing this mechanism and the steps required for its implementation.