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uniswap

European Central Bank document questions whether DeFi DAOs are sufficiently decentralized

On March 26, the European Central Bank published a working paper studying the governance concentration of four major DeFi protocols: Aave, MakerDAO, Ampleforth, and Uniswap.The paper, based on holding snapshot data from November 2022 and May 2023, found that although governance tokens are distributed across tens of thousands of addresses, the top 100 holders in each protocol control over 80% of the supply, and a large number of governance tokens can be linked to the protocols themselves or centralized and decentralized exchanges, with Binance being the largest identified centralized exchange holder among the four protocols.In terms of voting participation, the paper noted that actual voters are mainly representatives who obtain proxy voting rights from small holders. The top 20 voters in Ampleforth control 96% of the proxy voting rights, the top 10 voters in MakerDAO hold 66%, and the top 18 voters in Uniswap hold 52%. About one-third of the main voters cannot be publicly identified.The paper argues that these findings challenge the assumption of inherent decentralization in DAOs, making it more difficult to determine regulatory anchors under the EU MiCA framework. MiCA currently excludes "fully decentralized" services from its scope. The paper also points out that it is impossible to determine from public data whether the holdings associated with the protocols belong to founders, developers, or treasuries, nor can it be determined whether exchange wallets are voting on behalf of themselves or their clients. The paper represents the authors' views and does not represent the official position of the European Central Bank.

Uniswap's motion to dismiss the class action lawsuit over fraudulent tokens was fully granted, with the court ruling that the platform is not responsible for third-party actions

A U.S. federal judge ruled to dismiss the remaining state law claims against Uniswap Labs and its founder Hayden Adams, ending a years-long class action lawsuit.The plaintiffs attempted to hold the platform liable for losses incurred from "scam tokens" traded on the Uniswap protocol. Judge Katherine Polk Failla of the Southern District of New York issued the ruling on Monday, dismissing the plaintiffs' second amended complaint "with prejudice," stating that the plaintiffs failed to present a viable legal claim. The court noted that the plaintiffs had multiple opportunities to amend their complaint but still could not demonstrate that Uniswap was responsible for the misconduct of unnamed third-party token issuers.The plaintiffs claimed to have suffered losses due to actions such as "rug pulls" and "pump-and-dump" schemes, arguing that Uniswap "aided fraud" by providing a platform for buyers and sellers to trade. However, the court clearly stated that merely providing a decentralized trading platform does not constitute "substantial assistance" to fraudulent activities. Judge Failla reiterated her previous view that holding developers of smart contract code responsible for the abusive actions of third parties on decentralized platforms is "logically difficult to sustain."The case was initially filed in 2022 and originally included federal securities law claims. The related securities claims were dismissed in 2023, and the Second Circuit Court of Appeals upheld that ruling, remanding the remaining state law claims to the district court for consideration. This ruling signifies the formal conclusion of the case and further tightens the boundaries of state law liability for DeFi platform developers.
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