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Uniswap's $12M Play in Ekubo Sparks Governance Debate

Uniswap is considering a $12M investment in Ekubo, a dominant AMM exchange on Starknet. Despite majority support, key governance members have questioned the deal's details and valuation.

In a recent temperature check vote, the Uniswap DAO expressed support for a proposal to invest $12 million into the Ekubo Governance token. Ekubo is an automated market maker, or AMM exchange, launched by a former Uniswap lead engineer on Starknet. While the majority of the community has voted in favor of the proposal, many governance members expressed skepticism.

Moody Salem, founder of Ekubo, previously worked as an engineering lead and advisor at Uniswap Labs. Originally joining Uniswap Labs in April 2020 as the fifth employee, he contributed significantly to its development. Moody wrote much of the early Uniswap interface, developed token lists, and pioneered the initial swap routing algorithms. He committed about half of the V3 code and led the design of V4.

Although Salem has left Uniswap, he has proposed a partnership whereby the Uniswap DAO would invest $12M (in UNI) in exchange for a 20% stake in Ekubo's upcoming governance token. Consequently, both the Uniswap DAO and Ekubo would become significant stakeholders in each other's protocols. 

According to Salem, this proposal fosters collaboration between the Uniswap and Ekubo development teams. Additionally, it advances the decentralization of Uniswap's development, bringing the Ekubo team on board as a key contributor to the Uniswap protocol. 

The proposal will also update the Uniswap V4 licenses and grant Ekubo unlimited use of Uniswap V4 on the Starknet network.

Ekubo is currently the number one AMM on Starknet. Its codebase is written in Cairo to maximize the benefits of Starknet’s architecture. Since its inception, the Ekubo protocol has captured roughly 75% of the total trading volume on Starknet, despite having only 5% of the TVL and lacking a swapping interface.


In the temperature check vote, 63.82% favored the proposal. However, despite it seeming like a clear win on the surface, some notable members of the Uniswap governance opposed it.

Wintermute, a leading market maker in the space, voiced concerns over insufficient details about the Ekubo governance token and its applications beyond just protocol governance. A major point of contention is the project's fully diluted valuation, which is around $60 million – a sizable figure considering Starknet's TVL is only $142 million.

Many raised concerns about Uniswap DAO's lack of framework for such investments. Even if the investment is strategically sound, the DAO has not been given sufficient information or time to conduct thorough due diligence in line with the significant funds requested. 

On the other hand, some DAO members said it might be good to have some sort of deployment of Uniswap on Starknet. Since Cairo is complicated, the Uniswap team might not be able to implement something there quickly. The proposal offers the DAO a significant stake in a protocol that's demonstrated rapid growth, potential for large market share, expertise in AMMs, and proficiency in Cairo.

As previously mentioned, this was only a temperature check vote, and the proposal has not passed a full vote yet. Whether the proposal will pass a full vote remains to be seen. We continue to Observe.