- The founder of Aave has argued that Uniswap is disregarding decentralized governance with its newly revealed “UNIfication” proposal.
- Uniswap has launched a new CCA protocol to improve token market formation and deliver efficient on-chain price discovery for new assets.
Uniswap’s “UNIfication” proposal has sparked debate and has even drawn criticism from Aave founder Stani Kulechov. In a detailed post on X, Kulechov questioned whether the proposal aligns with the principles of decentralized governance that underpin DeFi.
Kulechov opened by acknowledging the intent behind Uniswap Labs’ move, saying:
While I appreciate Hayden’s and Uniswap Labs’ commitment to refocusing attention on the Uniswap protocol, and while that may be the right direction for them, I find that the proposal does not lead to the best outcome when applied more broadly across DeFi and other DAOs.
His remarks refer to concerns that consolidating operational responsibilities under Uniswap Labs, part of the proposal, could diminish community involvement and weaken the decentralized decision-making model that many DAOs strive to preserve.
In his comments, Kulechov highlighted Aave’s own governance infrastructure as a counterexample, describing it as a battle-tested system shaped through multiple market stress events. He stated:
Resiliency is the key reason why many users and integrators trust Aave, and why Aave has become one of the most trusted DeFi protocols.
He emphasized that Aave’s DAO uses a pre-vetted, multi-stakeholder governance process that ensures only high-quality assets are listed and that risk is carefully managed.
According to Kulechov, this framework has repeatedly demonstrated its resilience through major industry crises, including the FTX collapse, the Terra/LUNA implosion, several bear market cycles, the recent Black Friday volatility, and numerous other DeFi-specific stress events.
Kulechov then defended decentralized governance broadly, suggesting that Uniswap’s proposal potentially underestimates what community-driven decision-making can achieve:
Decentralized decision making can work very well when stakeholders have sufficient skin in the game and distinct expertise, allowing them to validate proposals and keep one another in check.
What Is Uniswap’s Proposal?
On November 10, Uniswap Labs and the Uniswap Foundation jointly submitted the “UNIfication” proposal to the Uniswap DAO, outlining a comprehensive plan to align incentives across the ecosystem and position Uniswap as the default exchange for all tokenized value.
The proposal builds on the protocol’s remarkable scale, over $4 trillion in total volume, thousands of developers, millions of liquidity providers, and hundreds of millions of users, arguing that Uniswap is poised for its next evolutionary stage.
Key elements include activating protocol fees and directing them toward UNI token burns, alongside a retroactive burn of 100 million UNI from the treasury to account for the years’ fees that were never enabled.
The proposal also introduces Protocol Fee Discount Auctions (PFDA), a mechanism designed to internalize MEV and increase LP returns, as well as aggregator hooks, which would turn Uniswap v4 into an on-chain liquidity aggregator capable of collecting fees from external sources.
Additionally, Unichain sequencer fees would be routed to the same burn mechanism, with fee activation rolling out gradually, beginning with v2 pools and select v3 pools that collectively generate 80–95% of LP fees on Ethereum mainnet.
In parallel with these structural reforms, Uniswap has also introduced Continuous Clearing Auctions (CCA), a new mechanism designed to improve fair and transparent token launches.
Developed in collaboration with Aztec, CCA is engineered to address inefficiencies in early token market formation by executing on-chain auctions that handle pricing, bidding, and settlement transparently. Notably, Aztec became the first project to leverage CCA at launch.
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