Uniswap Foundation team receives high salaries while the protocol and token price continue to decline

Author: Chloe, ChainCatcher

 

The Uniswap Foundation (UF) has recently sparked heated discussion within the DeFi community due to excessively high executive compensation. A detailed comparison of UF's financial data with that of the Optimism Foundation's Optimism Grants Council indicates that UF's capital utilization efficiency is low.

This controversy has not only led UNI holders to question the value provided by the Foundation, but also prompted Pepo, a major contributor to the Uniswap DAO, to respond. He had previously resigned due to dissatisfaction with UF's governance.

The compensation cost of Uniswap Foundation's three executives is equivalent to the entire Optimism team

According to the Uniswap Foundation's 2024 financial report, the foundation issued approximately $9.99 million in grants, but total employee compensation reached as high as $4.79 million, of which executive compensation alone accounted for $3.87 million. Adding other expenses of about $2.8 million, UF's total expenditure was approximately $12.8 million. This means employee compensation accounted for nearly 37.5% of total expenditure, with executive compensation alone making up 22% of the total.

In contrast, during the same period, the Optimism Grants Council had a total grant budget of about $63.5 million, with internal personnel compensation of only about $2.14 million. Even conservatively adding estimated KYC costs of $500,000, the total comes to $2.6 million.

ImperiumPaper emphasized: "The cost of UF's three executives is equivalent to the entire Optimism team, yet UF only distributed 20% of the funds that Optimism did." He called on UNI holders to demand that the UF board explain the value it provides. Supporters argue that hiring senior executives at this scale in a Web2 company would certainly cost more, while opponents believe that foundation compensation should not be compared to the private sector, especially since those with average qualifications are receiving premium salaries, much like many boondoggles in the crypto industry.

Looking back, UNI has experienced significant price fluctuations over the past two years. After closing at about $7.35 at the end of 2023, it soared above $18 in December 2024, until a broad crypto market correction caused UNI to fall below $10 in February 2025, and it continued to decline through mid-year.

Recently, benefiting from the Unification governance proposal, UNI surged about 19% in a single day on December 20. While mainstream coins remained flat and volatile, UNI quickly climbed from the $5.50 consolidation range to $6.27, with the price retreating to $5.76 at the time of writing.

Meanwhile, Uniswap's TVL has dropped 60% from its peak of nearly $10 billion in 2021-2022 to about $4 billion, meaning that while both token price and protocol TVL have more than halved, executive compensation still accounts for nearly a quarter of total expenditure. This has raised community concerns about whether employee compensation is truly contributing to protocol growth. As of now, UF has not officially responded to the latest criticisms.

Additionally, Pepo (@0xPEPO), a former Uniswap DAO contributor who resigned this year due to dissatisfaction with UF governance, also reposted the controversial post, expressing hope that his friends can break out of the "salary hell," sarcastically referring to a certain executive's annual salary of $700,000.

Uniswap operates based on a complex Byzantine structure

Pepo resigned as a DAO delegate in May this year, holding 455,000 UNI tokens at the time, making him one of the top 20 DAO delegates. According to CoinDesk, Pepo's resignation stemmed from dissatisfaction with UF. He accused UF of prioritizing its own interests and those of Uniswap Labs after receiving $165 million in funding from the DAO, rather than the interests of the DAO as a whole, and criticized UF for lack of response to feedback and insufficient transparency.

At the time, Pepo stated in a post on X: "The Foundation's actions seem to prioritize excluding others rather than cooperation, and this is hurting Uniswap." This reflects deeper issues in Uniswap's governance, including major delegates making decisions privately, insufficient influence of DAO members, and doubts about the degree of decentralization of the protocol.

Pepo's resignation is seen as a symbol of reduced DAO participation. PaperImperium from GFX Labs stated, "For any DAO, when a contributor feels that only by resigning can they have an impact, it is a loss."

Like most DeFi protocols, Uniswap operates on an extremely complex "Byzantine" structure: the for-profit company Uniswap Labs is responsible for technical development, the non-profit Uniswap Foundation (UF) promotes ecosystem growth, while governance and resource allocation of the protocol are in the hands of the DAO composed of UNI holders.

It is precisely this multi-party governance structure that has sown the seeds for potential conflicts of interest. In March this year, the DAO authorized the allocation of $165 million to the Foundation, originally intended to give it autonomy to drive development, but this also inadvertently blurred the boundaries of responsibility and authority.

As contributors like Pepo worry, when the Foundation's actions are questioned as overriding the interests of the DAO as a whole, how to balance the interests of token holders and other stakeholders has become a core issue that Uniswap—and indeed all DeFi protocols—must face head-on.