continuation
IV. Quorum Alteration
At the time of write, with a token price of ~$6.50, Uniswap maintains the highest quorum dollar value of any DAO at ~$280,000,000. This is notably higher than even the most significant DAOs in the space.
| DAO | Quorum | % of Circ. Supply | Relevance |
|---|---|---|---|
| Uniswap | $284,800,000.00 | 6.66% | |
| Uniswap (adjusted) | $171,017,579.19 | 4.00% | Potential Alternative |
| AAVE | $167,520,600.00 | 4.25% | Highest TVL |
| Arbitrum | $62,000,000.00 | 4.03% | Largest L2 |
| LIDO | $32,290,570.15 | 5.00% | Systemic Importance |
| Optimism | $19,250,000.00 | 2.00% | Parent Chain |
| ENS | $18,640,000.00 | 3.02% | 3rd Largest Treasury |
Currently, Uniswap’s quorum dollar value is:
- 1.7x larger than AAVE, the protocol with the highest TVL
- 4.6x larger than Arbitrum, the largest L2
- 8.8x larger than LIDO, the protocol with the most direct systemic impact on Ethereum Mainnet
- 14.8x larger than Optimism, the parent chain to Unichain
- 15.27x larger than ENS, the 3rd largest treasury at $1.3b (relative to Uniswap’s 2.6bn)
This makes the question of “why?” worthwhile for us to consider as a DAO. While the UAC does not currently take a position on the matter, it is essential that we, as a community, regularly question and review our assumptions. Is a $280M quorum threshold truly necessary, or even optimal?
Important Feasibility Note:
Although the DAO has had some discussions in the past around both increasing and decreasing quorum, our present stance is that there should be no change to quorum as the costs outweigh the potential benefits. First, quorum changes aren’t as simple as changing the proposal threshold. More development work is required to make such alterations. Plus, quorum changes are far less trivial than proposal threshold updates since quorum represents the economic barrier to finalizing on-chain decisions, and altering it can have unintended consequences for protocol security.
Important Security Note:
Lowering quorum may increase proposal throughput, but it also reduces the cost of malicious actions, especially in a protocol with a large treasury. And, if the Uniswap treasury increases in diversity, away from the native UNI token, the appeal of an attack increases. Thus, while lower quorum may seem attractive from a governance participation standpoint in the short-term, such a move should be considerate of the current and future state of the treasury.
Large actor considerations:
It’s important to weigh the above with the knowledge that some large actors such as a16z maintain token balances in excess of 30M UNI. Two example perspectives to take from this are:
- Lowering the quorum threshold furthers this outsized influence.
or…
- This influence is already enough to largely guide the DAO, and, therefore, reducing quorum doesn’t change this status quo.
Influence on Actors:
- Benefits: A high quorum requirement offers strong protection against external, potentially malicious actors. It would be extraordinarily difficult for a hostile entity to acquire enough UNI to mount a direct governance attack.
- Limitations: However, while these requirements deter unknown third-party threats, they also consolidate effective control among a small set of known, internal stakeholders. As demonstrated by the recent halving of votable supply, it is empirically clear that a single large holder can significantly disrupt, or even stall, the governance process.
Circulating Supply
Beyond dollar value, another fairly common way to consider quorum is relative to token count through percent of circulating supply. At present, Uniswap’s quorum stands at ~6.66% of the circulating supply. This is ~50% higher than the average of the collection of DAOs mentioned and is generally quite high relative to the DAO space broadly.
If as an example alternative, Uniswap were to conform more closely to an industry standard ratio of 4% of circulating supply (adjusted), quorum would drop to ~24M UNI or $171,017,579.19.
At this adjusted level, nearly every historic proposal would have achieved or nearly achieved quorum, even without a16z delegations as visualized above. This does assume that 10M in treasury delegations persist.
Note on State of Circulating Supply: Unlike some other DAOs, where quorum may be in flux, altering based on the supply of the native token, Uniswap’s is fixed. Arbitrum DAO recently lowered its quorum threshold as a result of low voting participation, but that was in part due to the increasing bar for reaching quorum. A fixed threshold allows for more predictability.
IV. Optimistic Governance
Summary:
Token governance is valuable, but the current process of requiring full community mobilization for every single change or process is inefficient. While Optimistic Governance does not directly address the root issue of quorum for referendum voting (which would still be required in certain instances), it can elevate many of the core functions of the DAO to a committees/leadership-based model, which circumvents the need for quorum, particularly for routine or procedurally approved processes.
Rather than requiring explicit approval from the full voter base for every action, optimistic governance empowers a designated committee, working group, or delegate to execute predefined responsibilities or decisions autonomously, unless a challenge is raised within a set dispute window. The only instance of this present in Uniswap DAO at the moment is approval for cross-chain deployments, which follow a 7-day optimistic approval period guided by the UAC. This setup was implemented due to voter fatigue when it came to deploying v3 on new chains. As soon as this optimistic setup was implemented, the number of approved chains increased drastically.
Optimistic Governance offers a pragmatic escape valve. It does not eliminate tokenholder control. It simply reconfigures the exercise of that control. The model retains ultimate oversight via the ability to veto or challenge actions, while enabling a more scalable and operationally resilient workflow for day-to-day DAO execution.
Example – Aragon Solution:
Aragon champions an optimistic governance process more emblematic of corporate/board-structured governance. It’s a construct predicated on two core ideas:
- Permissioned Access and Processes: Individuals, or more likely, groups, can be assigned specific privileges and function call access. With this structure, the nature of permissions is highly customizable. The DAO would create a ‘process’ bespoke to each unique initiative. This process would include a large set of potential parameters ranging from total tx size, market-based conditionals, date constraints, frequency constraints, and more. The DAO would be at liberty to create bespoke structures.
and…
-
Multi-Phasic Proposal Process: Much like a SAFE for governance, Aragon’s solution allows for proposal staging such that each stage invokes the consent of different parties, or requires the meeting of specific requirements, before passing to a final community veto stage before passing. This is facilitated through Aragon’s Stage Proposal Processor (SPP). (For definition’s sake, we will refer to the entrusted individuals and entities with optimistic passing authority as the ‘privileged parties’.)
Example:- Stage 1: A committee composed of a 2-of-3 multi-sig approves the proposal - Stage 2: The Uniswap Foundation’s attorney approves the proposal - Stage 3: Optimistic Community Veto Window - Pass (or Fail if vetoed)
Integration: This would not require a change to the base governor contract but rather a replacement of the timelock contract the governor interacts with with Aragon’s executor contract. This executor would be fully and wholly owned by the DAO, so future adjustments post-instantiation would be done through full-community, token-based governance.
Cost:
The functionalities described here are available out of the box on the Aragon App and leverage OSx, an open-source governance framework. There is no cost associated with using either of these, however hiring Aragon to help with the design and implementation of this setup would be preferable.
Critical Configuration 1 – Veto Threshold:
The veto threshold serves to balance the power of the privileged parties and committees. As an example, if a committee moves to allocate more funding to an initiative than the broader community may appreciate, it is the veto capacity that will block the optimistic continuation of the expenditure. However, as we see it, there are two sides to this equation: the first being to balance committee power as stated above, and the second being to prevent veto or bottleneck attacks on the optimistic model.
It was mentioned during the July 8th community call that the veto threshold should be fairly constrained at around 1M to 2M UNI, intuitively to prevent consolidation of power amongst the privileged parties. However, should the veto constraint be too low, it would become trivial for large to mid-sized malicious parties to repeatedly block proposals for no other purpose than to push internal agendas. At present, attacks of this nature on the DAO as it stands today would require 51% of the total voting power, and total voting power would need to exceed the required quorum. Attack via veto would require tens of millions of UNI tokens.
If, for example, the veto threshold was set at the referenced 1.5M UNI, in theory, any actor with this sum could block all procedures across the DAO
-
Mitigating Factor 1: The veto itself functions as a referendum vote. All token holders may partake. Therefore, the attacker could be offset by the support of other actors in the ecosystem. That said, depending on the scale of the attack, this could create a de facto standard token vote for all DAO processes and limit the benefits of the optimist model altogether. ex. if an attacker voted FOR a veto with 10M UNI, but the broader community voted AGAINST with >10M UNI, the veto would not pass.
-
Mitigating Factor 2: If the vote were to be blocked at the veto-level due to a lack of general participation in opposition to the attacker by the token holder body, standard token governance is always still an option. The DAO could pass a standalone standard-token vote to pass the intended proposal as well as possibly increase the veto threshold, black list (though this is hard) the attacking party, or otherwise address the issue as deemed fit at that time.
It is important to note that these considerations are not to be presented as in excess of the potential value of the broader solution, but are instead noted as a black hat exercise and call to collective thought around the best possible execution path.
Concluding Problem-Solution Mapping
| Votable Supply | Quorum | Accessibility | Long-Term | |
|---|---|---|---|---|
| CPFs | YES | YES | YES | YES |
| IDVs | YES | YES | MAYBE | YES |
| Treasury | YES | YES | MAYBE | MAYBE |
| Reduce Quorum | NO | YES | NO | NO |
| Optimistic Governance / SPP | NO | YES (mostly) | NO | YES |
Community Feedback
This document has laid out a comprehensive set of observations and potential interventions for making Uniswap governance more robust. Importantly, the goal here is not to advocate for a predetermined bundle of changes but rather to initiate structured dialogue across the community. Let us know—
- Which issues resonate most strongly with you?
- Are there trade-offs we’ve overlooked?
- What additional interventions or alternatives would you like to see considered?
- Should any of the included mechanisms be prioritized for implementation?
Please share your thoughts below, or reach out directly to the UAC. With the help of other delegates over the coming weeks, we will synthesize this feedback, ideally leading to actionable proposals.