Return 12.5M Delegated Tokens to the Governance Timelock

Background and Motivation With DUNI unlocking greater governance participation from UNI token holders, this proposal undelegates 12.5M UNI currently deployed via the Franchiser, returning the tokens to the Governance Timelock.

These UNI were delegated from the treasury in 2022 and 2023 – 2.5M to the Uniswap Foundation and 10M to a group of active delegates – during periods of low governance participation. The delegations were intended to bootstrap an active delegate base when quorum was at risk and the number of delegates that could meet the proposal threshold was small. Today, Uniswap’s governance environment looks very different. UNI holders have been actively delegating voting power, and since DUNI was established, passed proposals have averaged roughly 75 million votes in turnout, exceeding quorum by approximately 88%. There are now over 50 delegates with greater than 1M UNI of voting power.

Undelegating these tokens also resolves a potential incentive misalignment caused by the Franchiser mechanism itself. These delegates were selected by the community for their active participation in governance, but the Franchiser was not designed to ensure structural alignment between voting power and economic exposure. The potential for this misalignment should not persist indefinitely when the original reason for implementing it is no longer a concern.