By using this site, you agree to our use of cookies, which we use to analyse our traffic in accordance with our Privacy Policy. We also share information about your use of our site with our analytics partners.

CryptoEconomic ResearchCodefiCodefi ActivateNews

ConsenSys Votes in Favor of Voltz in the Voltz-Uniswap Vote

Granting an Additional Use Grant to Voltz will advance decentralization in the Ethereum ecosystem, among other things. This is the first time that ConsenSys has participated in a DAO governance vote.
by Marta Piekarska, Simran JagdevMarch 21, 2022
ConsenSys Votes in Favour of Voltz in Voltz Uniswap Vote

ConsenSys has been at the forefront of decisions that keep the spirit of decentralization and transparency alive in the Ethereum ecosystem. We have been focused on creating the infrastructure that supports the agents of change in our industry. Keeping in line with its market-leading position, we decided to participate in its first DAO governance vote earlier this week. 

Voltz is a new defi primitive that brings efficient interest rate swaps to DeFi. One of the enabling mechanisms is usage of concentrated liquidity pioneered in Uniswap v3. v3 is subject to a Business Source License, which prohibits the use of Source code for production use. 

Voltz needs an Additional Use Grant to be able to use aspects of the v3 code base within the Voltz automated market maker. To recognize the benefits that Voltz will gain from usage of v3, the team proposes to give 1% of Voltz’s future token supply to the Uniswap Treasury. 

ConsenSys favors the proposal, partially because we think it advances decentralization in the ecosystem, and creates a precedent in how projects can leverage innovations done by other teams and reward them for their work. We have participated in a DAO governance vote because we think that governance is a key way to maintain the open-source, transparent and decentralized spirit of the ecosystem. 

Why Governance Matters

As the Ethereum ecosystem has grown, new players have entered the market. Many of these new entrants are coming to our space with the mindset of the centralized establishment forces that do not care for the communities they serve, and focus on extracting as much value out of those communities as possible. We sought to replace these extractive values in crypto. Now, many of these extractive agents are appearing in the most crucial layer of our ecosystem: its governance. 

Thus, we see a profound need to ensure there are influential actors within the governance of core Web3 protocols that protect the values that our industry was founded upon. Some of those values are below:

  • Decentralization
  • Sovereign individualism
  • Transparency
  • Accountability
  • Authenticity
  • Open-source contribution

Why we Voted in Favor of Voltz in the Uniswap Governance Vote

When ConsenSys participates in a vote, we ensure that the decision follows ConsenSys’ core values, which include cultivating community, continually evolving, and embracing innovation, among other things.

We also want our decision to improve the status quo of the DeFi Space by increasing the diversity, transparency and collaboration. In addition, our vote should contribute towards creating standards and best practices.

Our vote in favor of Voltz getting an additional use grant stands true on all these factors. Here’s how:

  • This proposal improves decentralization in the ecosystem. It aligns the communities, develops a new product, and establishes a precedent of how to pay for licenses in DeFi.

    When the Business Source License was introduced, many thought it would kill the innovation in DeFi, since forks will be banned. While there is a significant social cost to forks, most innovation happens through building on top of what exists, not starting from scratch. Thanks to this proposal there is a new path forward on how to build new projects while effectively paying royalties to original inventors.
  • This proposal expands diversity of the Uniswap community by bringing two communities together. Thanks to the vote, the massive Uniswap community has become aware of Voltz and will now have eyes on them. Voltz’s intention is to have an impact on governance and diversify the voices in their community. The swap is also likely to make more people from Voltz participate in Uniswap’s community.
  • Voltz’s ask and the process to decide on the swap creates clear, documented transparency. Having a very clear process to decide on the swap and the Additional Use Grant discussion benefits the transparency of both how Voltz’s decision making is done and how Uniswap Labs team is leaving the governance to it’s DAO.
  • Voltz’s proposal improves the security of the code as it leads to more eyes on the codebase of Uniswap. This will ensure the code is secure, and create potential for the two teams to report bugs they find in each other’s projects.
  • The proposal is economically beneficial for Uniswap. Votlz has offered 1% of its tokens in return for the swap. By obtaining 1% of the tokens, Uniswap will get a significant but not majority vote in Voltz. It is a number that will benefit Uniswap hugely if Voltz delivers on its promise (the market of traditional Interest Rate Swaps is valued in quadruple millions of dollars). If, on the other hand, they won’t, it will not have a negative impact on Uniswap’s token holders. While the fairness of the 1% share of tokens can be debated, it is a reasonable economic upside in exchange for the license.

Beyond the financial benefit for Uniswap token holders, if approved, this proposal represents a first for DeFi, and sets precedent for future Additional Use Grant requests. Keeping all the above-stated reasons in mind, ConsenSys decided to vote in favor of granting an Additional Use Grant to Voltz. 

Apart from being directly involved with DAO governance through voting, ConsenSys has been building out products focused on DAO governance for years. Our Codefi Activate offering helps DAOs launch tokens, run governance, and build stronger and more involved communities. Some networks that have leveraged Codefi Activate for their token launches include SKALE, AirSwap, and Filecoin. 

Our cryptoeconomic research hub, which brings out well-researched analysis and content on Web3 participation, also focuses on DAO governance, DAO design, and token engineering.