Previously, we reported on the DeFi Education Fund and the UNI dump hours before the $10 Million OTC sale. The DeFi Education Fund has now come out to present their side of the story and has issued a lengthy statement in that regard.
After the approval of the creation of the DeFi Education Fund, Uniswap token holders authorized it to deploy 1 Million UNI over the next few years. The DEF was also given discretion over its operations due to the unpredictable nature of the global policy.
Why DeFi Education Fund Made The Sale
According to the DEF, they made the sale because they expected a vast majority of the expenses to be dollar-based. They thought that diversification of the allocated funds would provide the DEF a budget to tide through any uncertainty the markets faced.
With DeFi coming under the lens of regulators globally and with many skeptical about DeFi and its ecosystem that is difficult to regulate, the DEF believes regulatory risk to be the greatest threat to DeFi and the services and liberties it offers to users. The DEF is looking to safeguard these qualities by engaging with and funding advocacy to legislators and regulators.
How DeFi Education Fund Made The Sale
DEF chose Genesis to make the sale because while Uniswap would have been preferred, there was insufficient liquidity to support a sale of this magnitude. Genesis, with its competitive fee schedule, quick and easy onboarding was chosen.
DEF claims complete transparency was followed in the sale, with all transactions available for public audit; Genesis was asked to sell 500,000 UNI on the 10th of July. Genesis completed the sale on the 12th of July from its holdings at an average price of $20.4. After the sale was concluded, DEF sent 500,000 UNI from their MultiSig to Genesis, and Genesis sent across $10.2 Million.
Working Towards Transparency
The DEF stressed its commitment to transparency when it comes to funds and how they are deployed and are taking several steps in that direction to ensure complete transparency.
- DEF will be publishing an annual budget within 90 days. The fund will employ a policy director who will work towards determining and managing a yearly budget. The policy director will work at market rates approved by the committee.
- Transactions can be blocked, and funds can be revoked through the Tally Failsafe tool. The tool is currently under audit and will be introduced as soon as it ready.
- Proposal authors will not be on the committee and will not be involved in the committee’s use of funds in any way.
- Committee members are some of the most well-respected and dedicated minds in DeFi. Out of the seven committee members, four hold senior legal positions in leading DeFi software companies.
- Committee members will no longer be permitted to make any UNI transactions for a 7-day window if there is any DEF treasury activity.
The Road Ahead For DEF
The DEF hopes to contribute to the success of DeFi. When legislators and regulators have become increasingly wary of DeFi, communicating to them the potential and value of DeFi becomes imperative. Projects will also benefit immensely with legal clarity and a favorable regulatory environment.
Questions Still Linger
The statement failed to placate some of the community members, with Adam Cochran, Partner at Cinneamhain Ventures, raising more questions on Twitter. He questioned why they chose to go with an OTC group that was close to the process and questioned the claim that the sale was not “private” or “hidden.” He also questioned why the remaining $10 Million is sitting idle and not being utilized. He stressed the need for a better and stronger DeFi focused lobby.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.