Uniswap Votes to Legally Ground Its Decentralized Future

The Uniswap community is currently evaluating a proposal to establish a new legal entity in Wyoming, termed “DUNI,” which is intended to facilitate off-chain operations while maintaining the protocol’s decentralized governance structure. This initiative, described as a Decentralized Unincorporated Nonprofit Association (DUNA), is designed to provide the decentralized autonomous organization (DAO) with formal legal standing. The proposal explicitly states that this legal entity will not alter the Uniswap protocol, the UNI token, or the mechanism by which votes are cast and executed.

The Uniswap Foundation, which is spearheading the proposal, emphasizes that DUNI would act as a credibly neutral legal interface, allowing the DAO to enter contracts, retain vendors, and fulfill tax obligations. Additionally, it is expected to shield participants from personal liability. If the vote passes, DUNI will function as a legal extension of Uniswap governance, bound to execute any decision the DAO votes on while refraining from exercising discretionary power. The Foundation will transition into the role of “Ministerial Agent,” responsible for executing governance decisions without independent authority.

Under the proposed structure, a Wyoming-based firm named Cowrie—founded by David Kerr, a key architect of the DUNA statute—will serve as the Administrator, handling tasks such as tax filings, EIN registration, compliance reporting, and general administrative functions. The technical infrastructure for the proposal combines smart contracts and off-chain agreements, anchored by Ethereum Attestation Service (EAS) technology, developed in collaboration with ScopeLift. The Uniswap Foundation has requested a $16.5 million allocation in UNI tokens—valued at a 30-day time-weighted average price (TWAP) of $10.42—to fund a legal defense reserve and settle potential U.S. tax liabilities, which are estimated to be under $10 million in total.

The Wyoming DUNA framework, effective from July 1, 2024, allows DAOs to function with legal personality by enabling property ownership, contract execution, and indemnities, all while operating under nonprofit status. Notably, the model prohibits direct distributions, aligning with the structure of traditional nonprofits. Feedback from Uniswap delegates has been largely supportive but cautious, with many viewing the proposal as a critical infrastructure step for long-discussed initiatives like activating the protocol-fee mechanism—commonly referred to as the “fee switch.” This mechanism has been a subject of speculation for years but has remained dormant due to regulatory uncertainty.

The temperature check vote conducted by the Uniswap community showed 100% support, indicating strong alignment with the proposal. The final vote will conclude on September 8 and requires a 40 million UNI “for” quorum. Governance retains full control over the entity, which is only authorized to execute proposals that have passed. Administrators are expected to flag any unlawful proposals but do not have unilateral veto power. Governance can revoke any role, reassign duties, or amend the framework via vote.

Beyond Uniswap, the DUNA model is gaining traction in the broader crypto ecosystem. On August 26, the decentralized finance platform Syndicate announced the launch of the Syndicate Network Collective, one of the first DUNAs to become operational. This initiative was supported by legal and operational partners including Cowrie, Cooley, Agora, and Anchorage. Senator Cynthia Lummis of Wyoming has publicly endorsed the initiative, emphasizing Wyoming’s leadership in financial innovation.

The vote on the DUNI proposal is not expected to alter Uniswap’s core economic structure or activate the fee switch. Instead, it aims to provide the DAO with a legal framework to engage with the off-chain world while preserving its on-chain governance supremacy. If successful, the proposal could pave the way for formal partnerships, enhanced regulatory compliance, and a more robust legal foundation for governance execution.

Source:

[1] Uniswap vote opens on Wyoming DUNA (https://blockworks.co/news/uniswap-vote-wyoming-duna)

[2] Uniswap community votes on Wyoming legal entity to ... (https://www.theblock.co/post/369433/uniswap-votes-legal-entity)

[3] The Uniswap community took the first step by establishing ... (https://www.chaincatcher.com/en/article/2203171)