This is the November update to the ongoing on-/off-chain Uniswap analysis.  An archive of related work is provided below:

• August 2022 (initial article), including an introduction and definition of the metrics analyzed.

• September 2022 (update).  Review of Proposal 2.24 Create the Uniswap Foundation

• October 2022 (not applicable).  There were no on-chain proposals completed during the prior month.

We also encourage readers to view the accompanying dashboard that can be accessed at https://signalcorps.shinyapps.io/Uniswap_On_Off_Chain_Governance/ .

November 2022 UPDATE

Since our last on-/off-chain analysis released in September, there has been one governance proposal that has had an on-chain vote:  Proposal 2.25: Deploy Uniswap V3 on zkSync.  Proposal 2.25 was executed with an overwhelming and near unanimous vote with 72,421,473 UNI in favor and only 120 UNI against.  Proposal 2.25’s on-chain vote had the highest number of unique voting participant addresses (5,832 participants) reported in an Uniswap on-chain proposal; building on the previous all-time high voter participant count (2,450) achieved in the previous proposal, Proposal 2.24: Create the Uniswap Foundation.

Please see Tables 2 and 3 below for the respective scores and rankings for each of the six metrics analyzed, included two engagement-based metrics (voting participants and voting power) and decentralization-based metrics (Nakamoto coefficient, HHI, Gini coefficient, Shannon Diversity Index).  

In addition to the high on-chain participation described above, Proposal 2.25 also posted the highest voting participant counts in the Temperature and Consensus off-chain phases (2,457 and 3,807 participants respectively).  Again, this is building on the previous all-time high voter participants counts achieved in Proposal 2.24 (1,860 and 2,199 participants respectively).  Therefore, Uniswap has managed to sustain the recent surge in governance engagement.

With respect to the decentralization-based metrics, Proposal 2.25 performed especially well in the off-chain phases conducted on Snapshot relative to previous Uniswap proposals. Proposal 2.25 ranked in the top four best scores for each of the metrics reported except the Gini coefficient (see footer 1).  Proposal 2.25 performed modestly on-chain in terms of absolute rank, but its scores were comparable to previous proposals. For example, Proposal 2.25’s on-chain Herfindahl-Hirschman Index (HHI) score was 994.  The HHI is on a scale from 1 to 10,000 with lower scores signifying less concentration.  Although Proposal 2.25’s on-chain HHI of 994 ranked twelve of eighteen amongst on-chain proposals, it should be noted that its HHI was lower than the on-chain average-to-date (1,271) and only slightly above the on-chain median (975.5). 

Note: lower rankings (e.g. 1, 2, 3) are assigned to scores indicating greater decentralization, such as lower values for HHI and Gini Coefficient and higher values for Voting Participants, Nakamoto Coefficient, and Shannon Diversity Index.  Voting Power is neutral but is ranked in the table above in descending order.

Footer 1:  Proposal 2.25 posted a high Gini coefficient at 0.999, similar to previous proposals that have generally ranged between 0.995 – 0.998.  Counterintuitively, part of this is due to the high participation, as the Gini coefficient is a measure of equality.  Therefore, as more relatively lower balance UNI holders participate, then this will increase the Gini coefficient.  A contrasting example is Proposal 2.09 that had the lowest on-chain Gini coefficient of 0.766 but only had 41 voting participants.  This further highlights how the Gini coefficient is important for understanding the underlying base distribution among all UNI token holders, but it can be a poor signal when examining vote distribution and engagement.