Uniswap Faces Power Struggle as Top Delegate Resigns

Delegate Resignation Sparks Controversy Over Uniswap’s Decentralization

Pepo, one of the most influential Uniswap DAO delegates, has announced his resignation, accusing the Uniswap Foundation of consolidating power at the expense of community-driven governance. Holding 455,000 UNI tokens, Pepo was among the top 20 largest voting delegates, making his departure a significant setback for Uniswap’s governance framework. His decision to step down highlights deeper issues surrounding the perceived centralization of decision-making within Uniswap, a project that has long championed decentralized control.

Pepo’s criticism centers around the $165 million treasury grant allocated to the Uniswap Foundation in March 2025. According to Pepo, the Foundation’s handling of the funds reflects a troubling shift toward autonomy, prioritizing its agenda over community feedback. He described the Foundation’s approach as “insulation over collaboration,” a sentiment echoed by several other delegates. This allocation of funds was originally intended to foster ecosystem development but is now viewed by some as a tool for the Foundation to exert undue influence.

Uniswap Foundation Executive Director Devin Walsh responded to the criticism, asserting that “delegate participation is essential,” while emphasizing that the Foundation remains committed to engaging with the DAO. Despite these assurances, sources within the DAO allege that critical decisions are being discussed privately among large stakeholders before being presented to the broader community for voting, a practice some have labeled as “DAO theater.”

This is not the first time Uniswap has faced scrutiny over its governance practices. In October 2024, Billy Gao from Stanford Blockchain Club condemned Uniswap Labs for launching a blockchain without consulting the DAO, calling it a “clear governance failure.” More recently, on May 1, 2025, the Uniswap Foundation launched a “Foundation Feedback Group” aimed at increasing transparency and delegate engagement, a move critics deem “too little, too late.”

The controversy comes at a time when Uniswap’s financial standing is also under pressure. The protocol’s total value locked (TVL) has fallen to approximately $4.27 billion, a steep decline from its peak of nearly $10 billion in 2021-2022. The $165 million grant, intended to bolster ecosystem development, now serves as a flashpoint in the ongoing debate over power consolidation within Uniswap’s governance structure.

Pepo’s resignation has also reignited concerns about the efficacy of DAO governance in the broader DeFi landscape. PaperImperium, Governance Liaison at GFX Labs, noted that “it’s a loss for any DAO whenever a delegate feels the only way to make an impact is through stepping down.” Other delegates echoed this sentiment, pointing to a growing sense of disillusionment over what they perceive as private deal-making among influential stakeholders.

Doo Wan Nam, Co-founder of StableLab and a Uniswap delegate, likened the current governance dynamics to traditional political structures, remarking that “Congressmen won’t just blindly write bills without talking to relevant stakeholders.” This perspective underscores the increasing complexity of decentralized governance, where the lines between public DAO votes and private negotiations blur.

Uniswap’s structural framework, which includes Uniswap Labs overseeing protocol development and the Uniswap Foundation managing ecosystem grants, is now being scrutinized for potentially overstepping its role. While initially intended to support the community, some argue that the Foundation’s influence has become disproportionately large, potentially undermining the decentralized ethos Uniswap was built upon.

As Uniswap navigates this governance crisis, the implications extend beyond its immediate community. The case raises fundamental questions about the balance of power within DAOs and whether decentralized governance can truly function as intended or if it remains susceptible to the same concentration of influence that plagues traditional institutions.

This article has been refined and enhanced by ChatGPT.