When a decentralized exchange decides to make certain harder to trade, something is amiss. For example, Uniswap, the leading DEX on Ethereum, is removing several currencies from its frontend. However, they are still accessible at the protocol level, creating a fair bit of confusion and dismay.
What Is Going On With Uniswap?
It is not uncommon for centralized exchanges to make certain tokens inaccessible. More often than not, such measures are the result of regulatory concerns. A company needs to adhere to strict guidelines and ensure it can meet requirements at all times. For decentralized exchanges, which rely on smart contracts, that situation is a bit different. More specifically, it is different on paper.
In Uniswap’s case, it seems things are not as cut-and-dried. The platform has officially removed certain assets from its front end. However, they are still accessible at the protocol level. It seems this is an attempt to make these assets more difficult to access. Whether that is temporary or permanent remains unclear. Community members and traders are not too happy about these developments.
The list of “censored” assets includes Synthetix’s synths and inverse synths, UMA’s option token, Mirror protocol mirrored tokens, Tether Gold, and others. A fascinating list, although one no one can make much sense of. Uniswap doesn’t explain why these tokens are now censored, other than a vague mention of “regulatory concerns”. A strange sentiment for a decentralized exchange.
This incident is an example of how decentralized technology has a long way to go. While the Uniswap Protocol remains autonomous, the front end is in the hands of the developers. That degree of centralization can prevent users from conveniently accessing tokens. Far from an ideal development and one that creates a perilous precedent for the future.
Why No Governance Vote?
Perhaps an even bigger issue is how the Uniswap developers made this change overnight. There was no prior announcement, nor did the community get to vote on a proposal. That is somewhat problematic, as UNI is the exchange’s governance tokens. If important issues like these can’t be voted on, then what is the point?
Now that this first step has been taken, it may be a matter of time until more tokens are censored. While Uniswap Labs aims to develop products and contribute to the Protocol, interventions like these are not the right way to go. Moreover, the lack of transparency regarding this decision raises a lot of uneasy questions.
It is understandable if certain rug puls and scam tokens are removed. Those cause financial harm and should never be accessible in the first place. However, synthetic assets and Tether Gold are far from a scam or rug pull. Therefore, the list makes no sense whatsoever, nor does the decision not to consult the community.
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