Binance CZ Said UNI Token Delegation Was A “ Misunderstood Situation”
In a Twitter post, Binance CEO Changpeng “CZ” Zhao said the UNI token delegation by the company was a misunderstood situation.
This was a response to questions about 13.2 million UNI tokens allocated on Oct. 18, making Binance the second-largest entity by voting power.
Deny The Allegation
CZ denies allegations that the crypto exchange used users’ tokens to vote, claiming UNI transfers between internal wallets caused the automatic delegation.
“UNI transferred between internal Binance wallets, causing the UNI to be automatically delegated. This is part of their protocol, not “we intended”,” he said on his Twitter account.
UNI transferred between internal Binance wallets, causing the UNI to be automatically delegated. This is part of their protocol, not "we intended". Binance don't vote with user’s tokens. Uniswap misunderstood the situation. Tokens come to popular platforms. #Binance https://t.co/KYPqFx5GrW
— CZ 🔶 Binance (@cz_binance) October 20, 2022
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“Binance don’t vote with user’s tokens. Uniswap misunderstood the situation. Tokens come to popular platforms,” he added.
Meanwhile, speaking to Cointelegraph, Binance said “Binance doesn’t vote with user’s tokens. In this case, there has been a misunderstanding of what has happened during the transfer of a large balance of UNI (around 4.6M) between wallets. We’re currently in discussions to improve the process to prevent any further misunderstandings happening again.”
Uniswap’s Response
According to Hayden Adams, Uniswap’s CEO, it is unclear how Binance will engage with Uniswap’s decisions, which Adams identified as a “very unique situation, as the UNI technically belongs to its users.”
“Yesterday @binance delegated 13M UNI from its books, making it one of the largest UNI delegates (this is only 1.3% of current delegated UNI so governance voting power remains quite distributed) Very unique situation, as the UNI technically belongs to its users,” he said.
Yesterday @binance delegated 13M UNI from its books, making it one of the largest UNI delegates (this is only 1.3% of current delegated UNI so governance voting power remains quite distributed)
Very unique situation, as the UNI technically belongs to its users. pic.twitter.com/bwsVb1IwKR
— hayden.eth 🦄 (@haydenzadams) October 19, 2022
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As per the on-chain list of delegates, Binance’s tokens constituted 5.9% of the voting power in the governance forum, placing Binance behind the venture firm Andreessen Horowitz.
Binance was able to propose governance votes through the delegation of 1.3% of UNI, a percentage that has been settled at 0.25%.
However, the exchange will not be able to pass votes on its own because it has to have a quorum of 4%.
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