Members of the cryptocurrency community have had questions about the UniswapDeFi Education Fund after it moved half of its funds into Stablecoins.
Uniswap’s DeFi Education Fund announced on Twitter on July 13 that it had liquidated half of its tokens, converting them into stablecoins. This raised a number of questions for it from members of the cryptocurrency community.
According to the fund, it sold 500,000 UNI tokens for $10.2 million worth of USDC stablecoins. Meanwhile, Uniswap, the project behind the fund, had previously indicated that the 1 million UNI tokens would be liquidated gradually over four to five years, rather than dumping large sums at once.
Doubts are increasing
The news has caught the attention of members of the cryptocurrency community, causing them to question the true decentralisation of Uniswap, as well as the purpose of the Fund itself.
The news was fueled by comments from industry analyst Igor Igamberdyev, who reported that some insiders at Uniswap dumped their tokens just before this major over-the-counter transaction took place.
This includes Larry Sukernik, who is one of the signatories to the Fund’s founding document. He sold 2,612 UNI tokens for 50,000 USDC just five hours before the aforementioned $10.2 million token sale. However, Sukernik himself stated that he was selling funds from a grant he received a few weeks earlier.
A little bit about the history of the Uniswap Foundation
The education fund initiative was launched as recently as May this year. It was launched by the Harvard Law Blockchain and Fintech Initiative (HLBFI), a student organisation focused on the popularisation of blockchain technology. The proposal was to create a fund with a capital of about UNI 1-1.5 million to support educational initiatives and lobby for the DeFi sector.
The community voted in favour of the management proposal and the UNI tokens were transferred to the fund. Even then, however, industry observers and UNI holders were already voicing concerns that the vote was controlled by whales and venture capitalists who owned the majority of the tokens.
Chris Black, founder of DeFi Watch and an ardent fighter against project centralisation, stressed that the transparency of the Fund raised some serious questions:
“DeFi Education Fund committee members, the core Uniswap team and the project investors (including a16z) have refused to answer any specific questions about the origins of the fund, the authors of the idea, how its future policies will be implemented and more.”
He also did not skirt the aforementioned dubious coincidence either, writing, “Why is a Fund Committee member selling 2,612 UNI just hours before selling 500,000 UNI?”
UNI has suffered
Unsurprisingly, Uniswap’s native token not only fell in the wake of this news, but also dropped out of the top 10 largest cryptocurrencies by market capitalisation.
The coin lost more than 10% of its value intraday, peaking at $17, and at the time of writing was trading around $17.30, according to Coinmarketcap.
The current drawdown from its all-time high of $45, recorded on May 3, is now about 60%.