- Uniswap postponed a much-anticipated proposal intended to improve its token governance.
- Price of the UNI token got impacted significantly and fell by 5%.
Uniswap [UNI] has had to delay a highly anticipated proposal aimed at enhancing its token governance and fee distribution model.
Governance problems
The Uniswap Foundation announced this delay in the deployment of the first proposal to activate Uniswap Protocol Governance.
The foundation emphasized the need for additional due diligence due to a new issue raised by a stakeholder, highlighting the sensitivity of the proposed upgrade.
They acknowledged the unexpected nature of the postponement and apologized, assuring the community that they would be informed of any significant changes and updated once there was more certainty about future timelines.
The postponed proposal aimed to streamline Uniswap’s fee mechanisms, enabling UNI token holders who have staked and delegated their tokens to receive rewards.
It sought to improve the efficiency of fee adjustments and reduce the governance burden on delegates while maintaining the protocol’s credible neutrality.
Source: X
How is UNI doing?
The UNI token took a significant hit due to this announcement and fell by 5% over the last 24 hours. The volume at which UNI was trading at had grown by 32% during this period.
Despite the significant decline in price, most of the UNI holders remained profitable. This was indicated by the MVRV ratio of UNI that was positive in spite of the price corrections.
The high profitability of these addresses could help maintain positive sentiment around the UNI token.
Source: Santiment
Legal troubles ensue
Adding to Uniswap’s challenges, the company was also facing a legal battle with the SEC. The regulatory agency issued a Wells Notice to Uniswap Labs, indicating its intent to recommend enforcement action against the firm.
Uniswap Labs contested the SEC’s case, arguing that it is flawed and fails to differentiate between tokens as stores of value and tokens as securities.
Realistic or not, here’s UNI’s market cap in BTC’s terms
The team at Uniswap expressed confidence in a favorable outcome, noting its legal team’s strong track record against the SEC.
Their legal team includes Andrew Ceresney, who represented Ripple in their victory over the SEC, and Don Verrilli, a former U.S. solicitor general who has argued more than 50 cases before the U.S. Supreme Court and represented Grayscale in its successful case against the SEC.