Transparency concerns as Uniswap-backed DeFi Education Fund liquidates US $ 10 million UNI

The news that the DeFi Education Fund, backed by Uniswap, has liquidated half of the funding has made the Uniswap community almost extremely angry.

Concerned about the transparency in Uniswap’s governance system

On July 12th, the Uniswap community proposed a grant of 1 million UNIs (equivalent to US $ 20 million) to the DeFi Education Fund. This fund aims to help clear the legal backlog for DeFi and help lay the foundation for this new sector. But recently there was information on Twitter that a member of the DeFi Education Fund had sold all of the UNI tokens he had received.

On June 12, the fund announced that it had sold 500,000 UNIs to Genesis Trading over the OTC for $ 10.2 million. Although Uniswap suggested liquidating only 1 million UNIs after four to five years. In May, the student organization proposed to the Harvard Law Blockchain and Fintech Initiative to help set up a fund and provide 1 million UNIs (valued at $ 18 million) to support educational and advocacy initiatives. Earlier this month, the proposal was approved and the UNI token was transferred to the fund.

But recently the community discovered that Larry Sukernik, a key member of the DeFi Education Foundation, was selling UNI tokens just before $ 10 million was cleared in the OTC market. Igor Igamberdiev, a researcher at TheBlock, noticed the anomaly and posted on Twitter:

1/3

Looks like Larry Sukernik, one of the multi-signers behind the $ 20 million DeFi Education Fund, dumped UNI five hours before the $ 10 million OTC sale. pic.twitter.com/JWlxZC2L4Q

– Igor Igamberdiev (@FrankResearcher) July 13, 2021

Igamberdiev later said Larry made 4 transactions, in particular:

• Larry received the UNI from the UGP address (the address proposed for UNI administration) 18 days ago
• Deposit 0.05 ETH into the DeFi Education Fund (16 hours ago)
• Exchange UNI worth 50.00 USD (15 hours ago)
• Execution of OTC orders worth USD 10 million (10 hours ago)

3/3

Consider four transactions:
– Larry got UNI from UGP address (18 hours ago)
– 0.05 ETH sent to the address of the DeFi education fund (16 hours ago)
– UNI exchanged for $ 50,000 with Uni v3 (15 hours 55 minutes ago)
– Executed the $ 10M OTC deal (10 hours 45 minutes ago) pic.twitter.com/PSdsulSx6g

– Igor Igamberdiev (@FrankResearcher) July 13, 2021

Shortly thereafter, Sukernik, the main character of the story, spoke up and declared:

“The story cannot be explained by the on-chain data you see. Firstly, a few weeks ago our team received the number of UNIs that I am selling. The emphasis is on we receive and I have to sell USDC to send it back to everyone. The DeFi Education Foundation’s UNI number was also sold before the above date. “

The incident has raised concerns about the centralization of Uniswap’s governance process. It also raises questions about transparency and the fund’s motives.

Chris Blec, founder of DeFi Watch, emphasized that Harvard Law clearly states that “The goal is to gradually sell 1 million UNIs over a period of 4-5 years, rather than sell in bulk. The fund then sold 50% of the 1 million UNI for no reason. They still haven’t explained why, even though hundreds of people are questioning them today. “

On July 13th, Blec published a thread about transparency regarding this education fund. He expressed concern about the voting process surrounding the proposal, the establishment of the fund and the role of Uniswap investor Andresson Horowitz (a16z).

“Members of the DeFi Education Fund Committee, Uniswap’s core group, and investors (including a16z) declined to answer questions about the origin of the fund, who came up with the idea, how future guidelines should be applied, and so on. “, Said Blec, not forgetting to emphasize that he had sent a letter to Andressen Horowitz, which was apparently ignored.

“After the vote was over and the fund was established, I submitted a new questionnaire to a16z on June 29th, as it appears that the vote only won because the governance delegates used the voting right based on the voting rights. a16z give you. These questions are also ignored. “

Blec also urged Sukernik to resign and leave the foundation:

“Even by mistake, selling UNI tokens from his own account just hours before triggering a massive 500,000 UNI sale is completely suspect.”

Currently, this issue is receiving a lot of feedback from the community. Criticism revolves around the issue of centralizing governance once a proposal is approved, but there is no specific plan or roadmap.

Veronica

According to Cointelegraph

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