What Uniswap’s latest proposal hinges upon

• The member’s holdings accounted for 6.4% of the total circulating supply. 
• Just about 4% of the total supply is needed to get a vote in favor of “yes.”

Uniswap [UNI] holders were taken for a ride in the past two days.

After a 77% spike on a proposal to overhaul the protocol’s governance system, the decentralized exchange token sharply corrected by 15% in the last 24 hours, data from CoinMarketCap showed.

Nonetheless, the sharp uptick sent UNI to a 2-year high, taking its monthly gains to nearly 80%. The focus now shifts to the proposal and the odds of it getting ratified by the community.

Amidst the speculations, an interesting bit of information was supplied by the on-chain data tracker Lookonchain.

A decisive advantage

A community member was found to be having a disproportionate influence on Uniswap’s on-chain governance.

The member had possession of 64 million UNI tokens, accounting for 6.4% of the total circulating supply. They then distributed this amount across 31 different wallets.

With around 4% of the total supply needed to get a vote in the favor of “yes” for the proposal, these wallets could decisively impact the outcome of the governance vote.

This scenario invited fierce criticism as users questioned the very ethos of decentralization that underpins on-chain governance mechanisms.

Whales continue to accumulate despite correction

Turning attention back to UNI, the price correction was accompanied by an increase in exchange supply, as per AMBCrypto’s assessment of Santiment’s data. This implied that holders liquidated their tokens for gains.

On the brighter side, UNI whales continued to accumulate, as seen by a slight increase in supply held by top non-exchange wallets. This suggested that whales were confident of further upsides in the coming days.

UNI’s Open Interest at record highs

The price explosion also created a flutter in UNI’s derivatives market, spurring a threefold increase in Open Interest (OI), as per AMBCrypto’s scrutiny of Coinglass’ data.

Realistic or not, here’s UNI’s market cap in BTC’s terms

At about $209 million, the money locked into UNI futures contracts was at the highest level since May 2021.

However, the recent pullback altered the sentiment somewhat as the number of bearish short positions for UNI exceeded bullish longs, as seen by the Longs/Shorts Ratio chart.