Despite promising to allocate the cash over the next several years, not days, a DeFi lobby group that obtained $20 million in funding earlier this month from the governance treasury of the decentralized exchange Uniswap sold half of its capital on Tuesday.
Before the on-chain vote, a representative of the “DeFi Education Fund” remarked in Discord, “The plan explains that these monies are anticipated to be allocated over the next 4-5 years, so it won’t have the same dilutive effect as selling 1M UNI all at once, which we agree would be a problem.”
Despite this, the group claimed — just eight days after receiving the funds — that it had sold 500,000 UNI for slightly over $10 million in USDC, presumably to support its ambitions.
The Ethereum community was taken aback by this decision, which came as a surprise to those who expected the enormous number of tokens to be sold more gradually and also emphasized the lack of any enforceable constraints attached to the grant money.
What was the source of the concept?
On May 27, Harvard Law’s Blockchain and Fintech Initiative proposed the idea for the lobby group, which was defined as a political grants committee with legal board members and policy professionals.
The group submitted a lengthy request for the entity on June 1, which it intends to convert into a 501(c)(4) “policymaking engine.” The major purpose was to push for DeFi industry regulatory clarification. The 1 million UNI required was only an “initial infusion,” according to the report.
Two snapshots were taken before the main vote to measure the community’s reaction to the proposition.
For the second snapshot, it appears that the proposer, Slingshot Finance COO Kenneth NG, and two other student groups received the majority of the votes. The affirmative vote was 86 percent for these four entities. (However, a few unidentified whales delegated the tokens to the student organizations.)
DeFi loan platform Compound CEO Robert Leshner and Ethereum investor “DC Investor” were among those who voted against the snapshot, each putting 5 million UNI behind their votes.
The vote is in favor.
The major on-chain vote for the idea finished on June 29, with 79 million UNI in favor and 15 million against.
Well-known crypto personalities are supporting the project, according to the advocacy organization, by holding the keys to its multi-sig wallet, which limits access to the monies. Lawyer Jake Chervinsky, Orca Protocol advisor Larry Sukernik, and Aave general counsel Rebecca Rettig are among those involved.
The monies were received by the lobby group on July 4th from the Uniswap governance. It subsequently sold the UNI through OTC firm Genesis Trading, receiving roughly $10.2 million in USDC.
The organization has stated that it is currently hiring a policy director for a salary of $150,000 to $250,000. The policy director will be responsible for developing the fund’s strategy and engaging with lawmakers.
Following the transaction, Chris Blec, the founder of DeFi Watch, a platform dedicated to promoting DeFi openness, posted eight questions to the Uniswap governance forum, demanding answers from the DeFi Education Fund concerning the fund and how it came to be.
He addressed a letter to the lobbying group before the vote, and he wrote a letter to venture capital firm a16z shortly after it passed. He stated on the forum that both letters were disregarded.