Let’s break down Uniswap’s governance process.
Uniswap is the largest DAO in the world with a market cap of $6.5 billion and ~300k registered wallets. Here are the key takeaways from their governance process. This is useful for anyone who starts or plans to start a DAO.
$UNI tokens need delegation
To vote, $UNI token holders need to go through a process called delegation.
Token holders must decide whether they prefer to vote themselves (self-delegation), or delegate their vote to someone else. Uniswap voters can submit pitches to convince other voters to delegate to them. The delegation process is simple and straightforward. Once delegated, token holders can vote on active proposals.
This approach affords flexibility to token holders - retain the vote, or delegate to someone who is better informed.
Submitting a proposal takes a few steps
Uniswap uses Snapshot to manage proposals. There are 3 steps:
- Temperature check: helps assess interest in the proposal and requires a minimum of 25K UNI holders to participate. Proposals can also be tweaked based on comments.
- Consensus check: helps assess further interest and requires 50K UNI holders to participate.
- On-chain vote: proposal needs to have at least 2.5 million UNI delegated for an on-chain vote. Uniswap allows smaller voters to congregate using a platform called fish.vote.
Whilst there are a few hoops to go through, it feels required given the size and scale of the DAO. Too many proposals would dilute the governance process.
Neat process
Uniswap’s governance process is neat and can serve as useful inspiration for other DAOs.