Welcome to Valid Points. In today's issue, Sam Kessler writes about how the contentious Uniswap vote to expand onto Binance's BNB blockchain highlighted the opaqueness of decentralized governance. Read the full article here. When Andreessen Horowitz (a16z) invested in the decentralized crypto exchange Uniswap, it earned a massive trove of the project’s UNI tokens – crypto assets that double as votes in the exchange’s decentralized autonomous organization (DAO). The venture capital firm’s ownership of those tokens – and the votes it controls – are suddenly at the center of a crypto debate over how decentralized Uniswap really is. On Twitter and elsewhere, some industry observers and stakeholders in the project are asking whether there is a potential conflict of interest given a16z’s interest in multiple projects that might benefit from a business relationship with Uniswap. Last week, in a community poll that was viewed as crucial in a cut-throat race between crypto infrastructure platforms, the Uniswap DAO selected a crypto “bridge” called Wormhole as a key part of its infrastructure for a planned expansion to Binance’s BNB blockchain. Unlike official, “on-chain” DAO votes that can automatically execute blockchain code when they pass, this one, hosted on the website Snapshot.org, was a more informal “temperature check.” A16z didn’t cast a vote in the “temperature check” poll, and its absence from the tally may have cost LayerZero, one of its portfolio companies, the highly coveted spot. (A16z later clarified that it would have voted for LayerZero, but that it was unable to participate for technical reasons.) Now an official vote is pending on whether to ratify Wormhole’s selection, and a16z has voted against it. A key question is whether the firm should be allowed to derail Uniswap’s expansion plans in order to prevent LayerZero’s competitor from gaining an advantage. So far, a16z has used 15 million UNI tokens to vote against the proposal – not enough to block it from passing. In other words, the entire issue might be moot in this case. But the issue raises the question of how things might have played out differently if a16z had made full use of its voting powers. The venture firm’s 15 million UNI represents just a fraction of its total holdings. A representative for a16z tells CoinDesk that it has “delegated” over 40 million additional tokens to third parties – many of whom voted against a16z in this week’s vote. Theoretically, a16z could, in future votes, reclaim those UNI tokens, and the votes, for itself. If a16z loses this week’s Uniswap vote – which currently seems likely – it will not prove that the Uniswap DAO has lived up to its “decentralized” governance ethos. Instead, it will only prove that a16z has chosen to exercise self-restraint rather than draw attention to the full weight of its influence within Uniswap’s decentralized ecosystem. Moreover, the example of a16z and Uniswap underscores how little we know about how power is distributed in the pseudonymous world of decentralized governance. | 