Uniswap Foundation: Summary Q2'2024 Financials

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Continuing with our series of financial transparency updates to the community, the Uniswap Foundation is excited to post the unaudited summary financials for the quarter ended June 30, 2024.

Assets on Hand and Projected Funds Usage

On June 30, 2024 we had $36.81 million in USD and stables on hand and UNI 0.68 million (in UNI). The fiat (USD) cash and stables are to be used for grantmaking and operating activities and the UNI for employee token awards. The expected runway was through the end of 2025 and was earmarked as follows.

Grants commitments and incentives: a total of $26.12 million was allocated towards grants. $22.46 million to be committed in 2024 and 2025 and $3.66 Million was reserved for grants committed previously, to be disbursed. The remaining $10.69 million was to be used to fund operations expenses through the end of 2025.

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Q2’2024 Grants Committed and Disbursed

In Q2’2024, the Foundation committed $3.22 million in new grants and disbursed $2.48 million in committed grants.

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Q2’2024 Commitments and Disbursements Detail

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Year to date June 30, 2024, $7.55 million in grants were committed and $5.27 million in funds disbursed. Q1’2024 financials, including grant commitments and disbursements, and operating expenditures are available to view here.

Q2’2024 Summary of Activities

In Q2’2024, the Foundation accrued $1.6 million in operating expenses, excluding employee token awards in UNI. YTD June 30, 2024 operating expenses were $2.63 million. The Foundation also realized $0.19 M in Other Revenue: Dividends and Interest in Q2’2024.

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Payroll expenses included salaries, benefits and taxes. Contract & professional fees included legal, accounting, technical audit, and consultant expenses. Office expenses included internal team events, such as offsites, software, transaction fees and other G&A. External events included conference and external event travel and attendance. Advertising & marketing included web design, agency fees, TLDR event hosting. Insurance: includes directors and officers insurance.

In the following financial update post, we will continue to share a snapshot of 3rd Quarter 2024 results, including grants commitments and disbursements, operating expenses and summary of financial position. 2023 unaudited financial summary is available here.

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Hi,

Thanks for the update.

There is one item I wanted to ask about, specifically the more than $1.2M committed to the v4 audits (and most of it disbursed already). I would expect that Uniswap Labs, a for-profit organization with a large budget and its own funding, would take care of all development-related expenses. Moreover, Uniswap v4 core code is not open source; it’s licensed by the Labs under the BSL until 2027-06-15.

Could you explain the reasoning behind the Foundation taking on the auditing costs?

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Good morning,

Would you be able to share some context regarding the grant to the PBS Foundation?

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There is a cost for the protocol fee switch security for $82k, but also a $-17k for protocol fee switch security. Why is this?

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The PBS Foundation was established as an independent, non-profit organization dedicated to fostering research collaboration within the Ethereum ecosystem, with a particular focus on proposer-builder-separation (PBS). The foundation’s mission is to safeguard the decentralization of Ethereum’s consensus layer by supporting research aligned with the principles of PBS design. To achieve this, the PBS Foundation partners with industry stakeholders, academic institutions, and independent researchers and developers to fund research, education, and the development of neutral infrastructure. Through its grant programs and networking efforts, the PBS Foundation seeks to address the most pressing challenges in PBS design, with the ultimate goal of supporting a highly decentralized validator set.

At the Uniswap Foundation, we’re dedicated to maintaining Ethereum’s decentralization and neutrality through infrastructure R&D of which Uniswap both benefits from and contributes to. With the majority of Ethereum’s MEV originating from Uniswap Protocol transactions, we are inextricably tied to base layer Ethereum, as well as all the L2s Uniswap is deployed on. As Uniswap grows, Ethereum has to scale in order to accommodate volume and developer activity. As we mentioned in our original announcement, we’re thrilled to join Vitalik Buterin, Coinbase, Consensys, Paradigm, Fenbushi Capital and Flashbots in funding the PBS Foundation. To see some of the grants funded by the PBS Foundation, check out their notion site linked here.

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The referenced table shows funds committed during the reporting period on the left and disbursements made during the period on the right. The $82K under commitments included new commitments towards the governance upgrade audit and bug bounties. The -$17K disbursement included payments that were made by the Uniswap Foundation during that period against prior commitments.

Both the commitments and disbursements for the period were decreased by a refund for a previously paid commitment and that is the reason why disbursements show as a negative number. The reason for the refund was that the original agreement for that specific vendor had a refund provision included that was activated if the audit did not find any high- or medium- severity issues in the code, which it did not.

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Great question! The Uniswap Foundation is dedicated to fostering ongoing innovation within and adoption of the Protocol and its supporting infrastructure. Top priorities here are both security of the Protocol itself, and in turn the UF’s ability to support safe usage of the Protocol, and the development of robust businesses on top of it.

As to Protocol security - given the extent of the Protocol’s usage across the ecosystem, we view v4’s security as a public good. As for the UF’s part, our team has become one of several contributors to the Protocol in the last few months (primarily via saucepoint), and our continued participation in its development and audit process will enable us to better support and grow an ecosystem on top of the Protocol.

To increase our participation in the coming months and years, we’re funding and playing a leading role in audits, bug bounties, and organizing various events and initiatives. This helps us do our best to ensure the Protocol is deployed securely, that we understand the results of the auditing and diligence that has been done, and are in turn able to share relevant knowledge with future integrators, hook developers, and other builders.

Select core contracts in Uniswap v4 are set to be deployed under a Business Source License which grants the same powers to Uniswap governance as the v3 license did. As originally documented here, the BSL was put in place to protect the Uniswap ecosystem and support growth within it. It’s also worth noting that only legal entities can hold software licenses (as opposed to, for instance, the Uniswap governance contracts themselves).

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When I check the data at rootdata, it shows that there are 400M+ UNI token in the treasury of uniswap foundation, while according to your financial report, only 0.68M UNI token is held by UF. May I ask what is the misunderstand about it?

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The Uniswap DAO treasury is different from the UF balance. Total UNI holdings in treasury = 383M.

Funds have been sent from the DAO treasury to UF in order to fund their operations and grant programs. In Q3 2022, 2,457,002 UNI was sent to the foundation. Another 10,685,984.71 was sent in Q4 2023. This treasury also issues tokens for other DAO programs.

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I see. Thank you very much for your explanation.