Crypto exchange Binance has made a move toward taking part in the governance process of the decentralized exchange Uniswap, making it the second-largest entity by voting power in the Uniswap DAO.
Binance delegated 13.2 million UNI tokens on Oct. 18 to its own wallet, meaning the exchange is now able to use those tokens to vote on governance decisions affecting the protocol within the Uniswap DAO.
Binance now has 5.9% of the voting power, calculated as a percentage of tokens delegated to the exchange out of all delegated tokens. It sits behind crypto VC firm a16z, which has 6.7% of the vote.
That's causing some concern for Uniswap founder Hayden Adams, who is worried that Binance may use tokens that are owned by the exchange's users to participate in governance for its own reasons.
This is a “very unique situation, as the UNI technically belongs to its users,” said Adams on Twitter. Normally more governance participation is good, he said, noting that it is unclear how Binance plans to engage with the governance system.
The amount Binance has delegated represents 1.3% of the total supply of UNI. This is above the 0.25% threshold for proposing governance votes but below the 4% quorum required for votes to pass. The threshold for proposing votes was recently reduced following a governance vote.
Binance wasn't immediately available to comment.
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