Why regulatory pressure on Uniswap Labs missed the mark
Direct from the desk of Dane Williams.
Regulatory pressure on Uniswap Labs missed the mark because they are trying to regulate an unregulatable, decentralised protocol.
Once the genie is out of the bottle, there’s no stuffing that sucker back in.
There’s really no better way to describe decentralised finance and the time wasting war that regulators are forced to fight.
Having previously talked about UniSwap Labs removing tokens being good for decentralisation, I wanted to write a more focused refresher.
My stance of course remains that regulators are losing a battle that they simply don’t understand.
And instead of doing the right thing by the people they are meant to be helping, they are just doing things to save face with an equally uneducated public.
Peak inefficient government bloat that takes advantage of a dumb population, who thanks to this misguided war, stay in the dark.
Here’s a summary of when, how and why it doesn’t matter that the company behind the UniSwap (UNI) protocol was forced to make the move.
When did UniSwap Labs remove tokens?
On July 23, 2021, Uniswap Labs announced that they were restricting access to certain tokens on their front-end interface.
They cited the "evolving regulatory landscape”.... whatever the hell that means.
The move to restrict access to certain tokens on Uniswap's front-end interface came after increased regulatory scrutiny of the cryptocurrency industry by US regulators.
The Securities and Exchange Commission (SEC) has been cracking down on cryptocurrency-related projects that it deems to be in violation of securities laws.
Uniswap Labs likely made the decision to remove these tokens from their front-end in order to avoid potential legal issues with US regulators.
They took the stance that it’s not their war to fight and stepped back.
How did UniSwap Labs remove tokens?
They didn’t really remove tokens.
Uniswap Labs only removed access to certain tokens from their own front-end interface.
Essentially nothing more than a domain and template which they operate and own.
With that being said, it's important to remember that these tokens still exist on the Uniswap protocol, which is decentralised and not owned or operated by any single entity.
That’s right, they didn’t actually remove tokens from Uniswap at all.
Because they can’t.
Users can still access these tokens through other front-end interfaces that are not owned or operated by Uniswap Labs.
If it seems like a monumental waste of time and effort by the regulator to you, then you’re not alone.
Why Uniswap Labs being forced to remove tokens doesn’t matter
Yep, the removal of these tokens from Uniswap Labs' front-end is largely just window dressing by the regulator.
It does not actually prevent anyone from accessing these tokens or from trading them on the underlying Uniswap protocol.
The protocol itself is decentralised and thus Uniswap Labs does not have the ability to control or manipulate the token listings on the protocol.
For me, the fact that users can still access these tokens through other front-end interfaces highlights the limitations of regulatory efforts to control decentralised cryptocurrency networks.
While regulators may be able to exert some influence over centralised entities based within their jurisdiction - like Uniswap Labs - they have no control over the underlying protocols.
Final thoughts on DeFi regulations going forward
As far as I am concerned, this regulatory pressure on Uniswap Labs represents a misguided attempt to control the unregulatable.
By forcing Uniswap Labs to remove certain tokens from its front-end interface, regulators may have appeased some critics and created the appearance of control.
But the reality is that they’ve ultimately missed the mark.
The real issues facing decentralised finance go far beyond token removals from front-ends and any meaningful action must recognise the unique nature of decentralised protocols.
In my opinion, regulators need to give credit to the people they work for and prioritise education over regulation.
Regulators should work with innovators and users to develop effective and nuanced approaches.
By promoting education and dialogue, regulators can create a more informed and empowered public that can navigate the challenges of cryptocurrency with confidence.
Only then can we hope to strike a balance between innovation and protection.
All while respecting the fundamental principles of decentralisation and democratisation.
Maybe one day…
Best of probabilities to you.
Posted Using LeoFinance Beta
I agree with what you have said. All people have to do is move to a different front-end. The only bad thing about that is the users might not feel as safe because generally, people trusted the swap to go through on Uniswap. We all know the regulators are going to try everything they can.
Posted Using LeoFinance Beta
People feeling safer when they interact with the decentralised protocol via one front-end over the other is really just a perception though.
Again, it all comes down to education.
Posted Using LeoFinance Beta
Can't roll back the chain.
I like HEX for the same reason. It came out as a finished product, and is actually immutable and decentralized.
I believe that MKR is also in this category. As the regulators start to go after stable coins, it will be interesting to see how MKR fares. I think that the only way to break MKR is to break ETH.
HEX has suchhhh a bad reputation.
Honestly, I don't even know what to think anymore.
Which obviously would break a lot more just just Maker.
Something I actually do see happening eventually due to regulatory pressure, but there will be more forks meaning it won't actually break as such.
Posted Using LeoFinance Beta
HEX has a bad reputation because thin skinned people find Richard Heart triggering. But whether you think HEX is a masterpiece or a $#!+ coin, it definitely does work as intended.
Interesting idea about ETH folding under regulatory pressure. Do you think the SEC is going to be able to break ETH, or some other entity? How do you see that going down?
https://twitter.com/1413161729106776065/status/1637474550643400705
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