Last week the decentralized exchange Uniswap distributed the UNI token. For many who had used Uniswap in the past, the token launch became an unexpected windfall. If you have already traded on the decentralized exchange Uniswap and have not yet heard of the UNI tokens: Go to the trading page, log in with your wallet – and perhaps a remarkably valuable gift is waiting for you there. Because the decentralized exchange with the highest turnover by far has now also issued its own token. In doing so, it responds to other apps from Decentralized Finance (DeFi), which, like Compound or Sushi, have established their own tokens. Superficially, according to the Uniswap developers, it is a matter of handing the protocol over to the community and “building a vibrant, diverse and committed system of governance that will actively guide the protocol into the future.” UNI is a so-called “governance token” “Which is to solve the problem of how to control an app that shouldn’t belong to anyone because it is decentralized. The UNI token is supposed to become its owner with a say in the development of the protocol. In order to make suggestions for the minutes, a delegate must have at least one percent of all UNI tokens behind him; in order to accept a change, approval must be given by an election in which delegates who represent at least four percent of the tokens participate. In the background, however, the purpose of the UNI tokens is likely to be to generate income for the developers and their investors. Because one of the peculiarities of decentralized platforms is that there is no central party that earns, for example, fees. Those who exchange tokens at UniSwap pay a trading fee, but this goes directly to those who provide liquidity with their tokens. The developers who form the smart contracts and provide an interface earn nothing in themselves. Still, they managed to raise an $ 11 million investment to expand the protocol and platform. How is this ever going to pay off without income? The answer lies in the UNI tokens. Uniswap has generated one billion UNI tokens, of which the team members receive 21.51 percent (215 million UNI) and the investors 17.80 percent (178 million UNI), in both cases with a condition stipulated by the smart contract that the tokens may only be moved in four years. With Uniswap being the most popular DeFi app platform right now, the tokens remain surprisingly valuable, which has made a brilliant profit for both the founders and their investors – at least on paper. The most exciting part of the UNI token is how the absolute majority of the tokens are distributed: 60 percent go to the “Uniswap Community Members”, which means here: to the users. They will now receive an unexpected reward for having used Uniswap once in the past. A part – 15 percent – goes to users who provided liquidity by September 1, 2020 or exchanged it through Uniswap. Every address that has ever interacted with the Uniswap contract receives 400 UNI tokens. So it is enough to have exchanged a few worthless tokens via Uniswap at some point in order to receive a gift. Another 43 percent of the UNI tokens already generated will be distributed over the next four years through “grants, community initiatives, liquidity mining and other programs”. Then an annual inflation of two percent will set in.
As is so often the case with tokens, UNI provokes a fallacy on the part of the market: The market treats the UNI tokens like a share or bond on the powerful decentralized exchange Uniswap. With a daily trading volume of between 340 and 850 million euros, it should be a strong company by traditional standards, with a market capitalization of hundreds of millions, if not several billion euros, justified. Accordingly, the UNI token brought it from a standstill to a market capitalization of around 425 million euros and even peaked last Friday at more than 680 million euros. At a price between 2.50 and 5.50 euros per token, the Aidrop became a gift of 1,000 to 2,000 euros for the amazed owner – and that for the fact that at some point you exchanged tokens with Uniswap. The value of the UNI tokens would be appropriate – if one could compare the tokens with a share or bond, or with anything else that gives the owner a right to income from the business. However, this is not the case.