Today, the following letter was sent to the Co-Presidents of Harvard Law School's Blockchain and Fintech Initiative, the proposers of the controversial "DeFi Defense Fund" proposal (also known as the "DeFi Eduation Fund"). Follow Chris Blec on Twitter for updates on their response.
Here is the text of the letter:
Thomas Hopkins / Mandy Mengyu Li
Harvard Law Blockchain & Fintech Initiative
Sent via e-mail and Twitter
Dear Mr. Hopkins and Ms. Mengyu Li:
There remain several unanswered questions surrounding your recent proposal to the Uniswap decentralized governance community known as “DeFi Defense Fund” or “DeFi Education Fund”. These questions, combined with the fact that most of your voting power seems to come from a few people and entities with extremely vested interests in the outcome, have given much of the community pause with consideration to your proposal.
Most of us understand at this point that you can get most of the votes that you need to win this vote from less than 10 parties. However, it is our hope that you will still choose to provide clear and transparent responses to these questions before the on-chain vote begins:
- We have already established that 99% of your voting power comes from just 4 Ethereum accounts. Do any of these 4 accounts belong to Uniswap investor Andreesen Horowitz (a16z), other notable investors or any Uniswap core team members?
- Who, outside of your organization did you discuss this proposal with before bringing it to the public? Were there discussions with or encouragement from past or current Uniswap core team members, investors, proposed committee members, or other influential backers such as Consensys?
- Was this proposal drafted in response to any ongoing, suggested or expected government investigation of the Uniswap corporate entity (Universal Navigation, Inc.) or any of its employees or investors that you were made aware of?
- To what extent will these funds be used to defend the Uniswap corporate entity (Universal Navigation, Inc.) or educate about regulation that will benefit the corporation directly? How can UNI tokenholders be assured that any conflicts of interest will be settled in their favor and not in the corporate entity’s favor?
- What assurances do UNI tokenholders have that these funds will always be used to educate about or pursue regulation, legislation, etc. that puts UNI interests first, even if it means putting those interests ahead of the interests of the greater DeFi community?
- Large portions of the World Economic Forum’s stated mission could come into direct conflict with the financial interests of UNI tokenholders. For instance, WEF’s founder has stated: “We need a ‘Great Reset’ of capitalism.” DeFi is built upon the premise of capitalism and free markets. What conversations led to a member of the World Economic Forum being proposed as a committee member, and why should UNI tokenholders feel that a member of the WEF will have their best interests at heart?
- The budget for this proposal is currently valued at approximately $16m. It was nearly $40m when first proposed. By comparison, the annual budget for CoinCenter is only $1m. What led you to propose a budget that is so much larger than that of CoinCenter?
- The proposal states that “the scope has been broadened to include the funding or organizations and work promoting best regulatory practices…”. Who determines what are “best practices” and what kind of say will the UNI community have in those decisions? How can UNI tokenholders be assured that the committee will not use its free reign to start new spin-off organizations that are no longer beholden to UNI interests?
- What assurances do UNI tokenholders have that members of the proposed committee will not pay funds to themselves or to other organizations that they have a vested interest in?
- You proposed that the 1m UNI (currently $16m, but could easily rise again) should initially be held in a 4-of-7 multisig wallet. If 4 of the committee members acted maliciously or carelessly, or if they were threatened personally, the security of the funds could fall into jeopardy. This creates a massive trust issue. How can UNI tokenholders be assured that these Ethereum signing wallets were created in a secure environment and that the keys themselves are being secured properly against theft and other forms of compromise? If the funds are compromised, will the committee members take full legal responsibility?
Thank you in advance for agreeing to answer these questions before the on-chain vote begins. Contact me at [email protected] to arrange for a public voice chat via Twitter Spaces, or send a written response which I will gladly publish on my website defiwatch.net. Alternately, I suggest publishing a blog post which offers the greater UNI community a transparent response to these very legitimate concerns.
With sincere hope for a productive conversation,
Founder, DeFi Watch