Is the emergence of UNI “forked coin” decentralization or hype?

Seizing the afterglow of the UNI airdrop feast, a "forked coin" called UNII was launched in the same airdrop method.

On the official website, UNII, which is only one "I" different from UNI, calls itself the "governance alliance" of Uniswap, and says it will call on retail investors to gather and compete with Uniswap's founding team, investors and consultants for governance rights, because the latter own 40% of the total UNI token share.

According to Uniswap's governance rules, only those holding 10 million UNI can initiate a proposal, and a proposal will only be passed after more than 40 million UNI votes. The initiator of UNII believes that this is a very high governance threshold for retail investors and is not "decentralized."

As soon as UNII appeared, it was listed on CEX. The price in the secondary market was difficult to match that of UNI. After a brief surge, the price of the coin plummeted 88%, causing investors to question UNII's motivation for issuing the coin.

Some people in the DeFi community have also noticed UNII, but they believe that UNII currently has no detailed governance plan and is essentially no different from other liquidity mining DeFi protocols. In their view, UNII is more likely to be hyped, and investors need to participate with caution.

UNII "scatters coins" and calls on retail investors to fight for Uniswap governance rights

After Uniswap issued the governance token UNI and airdropped it to users, on September 22, a project called UNII followed suit and successfully attracted attention in the DeFi circle.

On the UNII official website, every user who has used Uniswap can receive at least 400 UNII rewards. The full name of UNII is UNI Innamorare, and the official position is a governance alliance. Although UNII and UNI are only one "I" apart in naming, it is not the "forked coin" that people usually know. According to the official website, UNII calls on holders to form a joint "sub-community" of Uniswap to gather strength and participate in UNI governance. This makes UNII look more like a community coin.

UNII has a smart contract, but the initiating team is anonymous and there is no third-party audit information. They claim to be some enthusiasts who participated in Uniswap. From the official description, UNII’s initiation is "legitimate."

The initiator believes that how retail investors holding UNI tokens can gain a voice in Uniswap's governance is an inevitable potential problem. This is because, although Uniswap has received widespread acclaim with a grand airdrop, the token distribution ratio is not "decentralized" enough, so that the governance rights are still in the hands of the Uniswap team and large investors.

According to the official introduction of Uniswap, the initial supply of the governance token UNI is 1 billion tokens, of which 60% will be allocated to Uniswap community members; 21.51% will be allocated to team members; 17.80% will be allocated to early investors; and 0.69% will be allocated to consultants.

UNI Token Distribution Ratio

In Uniswap's governance, people must hold 1% of the total, or 10 million UNI tokens, to initiate a proposal, and the proposal can only be passed if the voting volume reaches 4% of the total, or 40 million tokens.

On September 23, Fengchao Finance checked the blockchain browser and found that, except for the official Uniswap address and the exchange address, there is almost no single account with 10 million UNI tokens. This means that the threshold for having the right to propose is very high.

"Compared to the founding team, investors and consultants who control a total of 40% of UNI tokens, we are like slaves in terms of voting rights." The initiators of UNII called on retail investors to gather as a force to gain a voice and benefit from Uniswap governance.

Weibo celebrity "DeFi He Taiji" believes that this initiative launched by anonymous Uniswap users is more like a fork of the Uniswap community, and UNII is the governance token of the new community. "UNII holders form a new party that can fight against the founding team and big players. This is a great way to play, and it is likely to be copied to all mainstream projects."

Financial blogger Cao Shouzheng thinks UNII is "quite interesting" and can be regarded as a governance derivative coin of UNI, which is equivalent to the small shareholders of Uniswap joining together to participate in governance.

The ideal is great, but the reality is also very realistic - most retail investors are more concerned about the price of UNII. "If the price is too low, 400 UNII may not be enough to cover the gas fee," an eligible investor told Fengchao Finance. He is not interested in governing Uniswap, and his focus is still on whether this wave of airdrops can make a little money.

The token price plummeted 88% after reaching a high point, and the motives of the initiator were questioned

Taking advantage of the popularity of UNI, the "legitimate" UNII quickly attracted a group of CEXs.

At 6:50 pm on September 22, UNII was listed in the observation area of ​​BiKi Exchange; 10 minutes later, MXC Matcha listed UNII. At 8 pm that night, Hoo also went online.

Unlike UNI, which triggered a rush among major exchanges, this time, the three major exchanges, Binance, OKEx, and Huobi, did not choose to list UNII, and UNII's market performance was far less strong than UNI.

On MXC Matcha, where UNII has the largest trading volume, the asset opened at $0.02, rose to $0.138 within two hours, and then fell rapidly. At 3:30 p.m. on September 23, UNII was quoted at $0.016, down 88% from its high point and below its opening price.

UNII plunged 88% from its high

An investor in the cryptocurrency community said that he took the position at $0.05 and suffered a heavy loss. He complained, "I thought it would fall and then surge like UNI, but I didn't expect it was just a scam." Another investor said frankly that most of those who received UNII through airdrops were those who received UNI through airdrops, "It's good to cash in the free candies, but it's not wise to take over in the secondary market."

At the same time, the motives of the UNII initiators have also been questioned. Some people believe that UNII is just hyping up the hot spots, and governance is just a cover, and the actual purpose is to issue coins and cash out.

Judging from the UNII plan, there is indeed no detailed plan for "how to participate in Uniswap governance through UNII". The initiator has set a development route: in the first stage, 15% of UNII will be used for airdrops, and a 98/2 UNI/UNII staking pool will be opened, where users can mine 30% of the tokens; the second stage will start on October 22, and the official will set up a 50/50 UNI/UNII staking pool and allocate 50% of the tokens. The other 5% will be placed in the "Celebration Pool" to reward community members.

This development route still revolves around "liquidity mining" and how to distribute UNII. The initiator did not give a detailed answer on how to achieve the goal of retail alliance governance after the "fork".

Some people in the DeFi community believe that the current idea of ​​UNII is essentially the same as other DeFi projects for liquidity mining. In both mining stages, users need to pledge UNI and UNII. These two currencies have large volatility, and users' principal is easily damaged. In addition, the project contract has not been audited, and the risk of participation is relatively high.

"It is recommended to participate with caution," the person said. Although UNII's banner looks very "decentralized", gathering retail investors to form a new faction is still like establishing a centralized group that can propose or pass proposals at will. Of course, whether UNII is trying to take advantage of the trend or develop a healthy community still needs to be judged based on its subsequent actual actions.

Although UNII’s motives have been questioned, this “forked community” movement has revealed some shortcomings in Uniswap’s governance. At present, real community governance has not yet begun, and how Uniswap can delegate power to every stakeholder also requires practical action.