According to PANews, Uniswap DAO, with $5 billion in funds, has been content with maintaining its reserves denominated solely in its native UNI token, but this situation may be changing. A new proposal for Uniswap DAO states, 'If the DAO needs to provide funding for certain initiatives, we should be able to draw on reserves without causing significant damage to the token price.' The proposal claims that the value of Uniswap's funds peaked at nearly $19 billion in 2021 but fell to $1.5 billion during the 2022 market crash – such fluctuations in the value of Uniswap's funds are not ideal. To prevent further instability, the DAO is currently voting on a proposal to establish an advisory committee to help Uniswap achieve fund diversification.
The proposal states that, in addition to diversification, the committee's goal is to explore how to transform Uniswap's treasury from a dormant reserve of UNI tokens into a pool of funds that can earn revenue and additional income for the DAO. The committee, called the Uniswap Finance Working Group, will explore plans to manage the protocol's reserves and generate additional income for the project while proposing a budget of $74,000 for members for eight weeks of research work. Data from the off-chain voting platform Snapshot shows that early voting data indicates strong support for the proposal, with a support rate of 79.61% among participants. The temperature check vote will end on April 1st.
Although the proposal has received support, regulatory concerns remain given that the actions taken for treasury diversification will involve selling UNI tokens from Uniswap's reserves. This sale could have tax implications. The committee may also explore the recent DUNA framework to address such regulatory issues. DUNA stands for Decentralized Unincorporated Nonprofit Association Act, a new law passed in the US state of Wyoming that recognizes DAOs as legal entities.
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