This comment is intended to be purely from a governance delegate perspective. I speak personally but feel this sentiment is likely shared: I want the outcome of this proposal to increase the total amount of $UNI that actively participates in governance. This is accomplished by both shifting around stagnant delegations but more importantly, bringing in more delegators to the protocol. In short, I’m concerned the outcome of this will be delegators delegating to inactive “burn” addresses in order to earn yield and not actually increasing governance participation… or as much as we may think.
The first idle delegations part is easy; in order to earn yield, delegators will need to shuffle their tokens around and in the process of which be forced to reevaluate their current delegations.
As for the second point, after personally chatting with dozens of VCs while trying to vie for delegation, the two main reasons for rejection were:
- There’s no financial incentive for us to do so, and it’s not worth the burden of figuring out custody, operations, etc.
- We’re exposed to an undetermined more amount of legal risk.
This new vote easily solves the financial incentive question. However, just thinking if I were a fund, particularly one who hasn’t delegated Uni beforehand due to legal concerns, I would simply delegate to myself, or a vacant burn address. This would qualify me for yield, yet have little to no extra governance related legal risk. Because of this, I fear that delegations from many new delegators won’t exactly increase the number of active $UNI in play.
Some solutions to this that I can think of are:
- Implementing a whitelist of delegates that qualify delegators to earn rewards. (Recognized delegates)
- Delegators only earn yields if they delegate to an address that has voted in >1, >5, … etc. number of votes in the past. (Active delegates)
Both of these I’m sure require substantial extra developer work. I’m not sure if these are the best solutions, but I think the problem described is genuinely a real one.
Happy to hear what everyone has to say and any other possible “solutions.”
Update after irl GovSwap event discussions:
- The purpose of this isn’t to strengthen an existing group of delegates. Delegators are still 100% free to delegate to themselves or anyone they want. That delegated address just simply has to partake in governance at SOME level. From a fund perspective, I think voting once introduces very similar legal risks as voting twice, 3x, 10x, etc.
Therefore, it should be a trade off:
- Actually get involved in governance, bear some level of legal risk, earn yield
- Stay not involved in governance, no yield
Ccing some people who all chatted on this, wanna hear your thoughts 
: @eek637, @kydo, @Getty, @DAOstrat.C, @AbdullahUmar, @404DAO