Uniswap is the largest DEX by trading volume. It was among the first blockchain-based programs to offer a decentralized alternative to the traditional currency exchange – using smart contracts to allow users to swap between different crypto tokens without the need for trusted middlemen.
The foundation has used a group of nine experts to analyze six of the leading crypto bridge providers – vital pieces of crypto infrastructure that allow blockchains to pass messages from one to another.
After a comprehensive review involving code evaluation and direct interaction with the bridge teams, the committee approved Wormhole and Axelar for Uniswap's specific use case of protocol governance. Other bridges including LayerZero, Celer, DeBridge and Multichain did not meet the committee's criteria. The report leaves open the possibility for some protocols to be reevaluated following future updates.
The assessment was designed to address some key issues faced by Uniswap and other decentralized governance bodies: The need for specialized expertise when weighing big decisions, and the potential for conflicts of interest to muddy community deliberations.
The committee took pains to repeatedly note that its findings were “narrow in scope” and “should only be used to evaluate cross-chain messaging protocols for this use case,” the report said.
The results of the process are not binding: Whenever Uniswap expands to a new blockchain, its community will ultimately be tasked with voting on the bridge platform that will be used to back its governance process. (LayerZero, which wasn’t approved by the committee, is already used by Uniswap on the Avalanche blockchain).
However, the protocols that were reviewed positively in the report, like Axelar, are already wearing the results as a badge of honor. “Uniswap’s approval is a validation of Axelar’s approach,” a representative for the firm told CoinDesk in an email.
Axelar CEO Sergey Gorbunov lauded the report in an interview, “I was generally positively surprised at how thoughtful it was. There are very few projects that can afford to be that thoughtful. It takes highly technical teams and a lot of dedication to come and dig under the hood behind all of these solutions.”
Bridge Selection Woes
Uniswap was built by Uniswap Labs, a for-profit company, but is governed by the Uniswap DAO (decentralized autonomous organization) – a collection of community members who use UNI tokens to vote on key protocol changes. Similar to other DAOs, Uniswap has a formally established operating entity, in this case the Uniswap Foundation, whose responsibilities include stewarding the DAO’s vast treasury and organizing day-to-day operations.
The foundation kicked off Uniswap’s bridge assessment process after a tumultuous community vote last year to select a bridge for Uniswap v3’s expansion to BNB Chain.
When Uniswap delegated the selection of the bridge to a community vote, it ignited an unusually heated battle in the typically humdrum Uniswap governance forums.
Bridges are a famously finicky technology to get right. Many, if not most, of the headline-making multibillion-dollar crypto exploits from the past few years resulted from buggy bridges. Teams vying for Uniswap’s BNB bridge spot quickly realized their selection could signal confidence to the wider crypto community.
Following the vote, however, many DAO voters complained that Uniswap’s forum-centric deliberation process was not sufficient for them to weigh the highly technical tradeoffs of different bridge platforms. When DAO voters sought guidance from their peers to assess bridge designs, a significant hurdle also emerged in the form of conflicts of interest.
Uniswap Foundation sought to remedy the challenges it faced with the BNB vote with the assessment process.
“Our Committee first defined the Uniswap cross-chain governance use case and then worked from first principles to create the assessment framework, prioritizing security first and foremost.” Uniswap Foundation Executive Director Devin Walsh said in an email to CoinDesk. “[W]e hope that this process will inspire other DAOs as they think about cross-chain deployments, and support decentralized decision-making generally.”
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