Three Major Challenges of Off-Chain Governance in DeFi from the Uniswap Discord Community

The authors of this article are Toby Shorin, Joanna Pope, Laura Lotti, Aaron Z. Lewis, and Maria Gomez, and it has been compiled by Hu Tao and Bran.

As one of the most representative projects in the DeFi market, Uniswap's governance process has also attracted widespread attention from the outside world.

Recently, under the support of the Ethereum Foundation and the Uniswap grant program, Toby Shorin and others conducted research on the off-chain governance process of the Uniswap Discord community, pointing out three issues and corresponding solutions, which they believe will help industry professionals further reflect on DeFi governance.

1. Off-chain Governance and Social Spaces

Cryptographic technology enables the creation of applications owned and developed by decentralized contributor communities. Anyone from anywhere in the world can access and participate in these open, borderless, and uncensored applications without needing permission from centralized authorities.

By contributing resources to the network (such as computing power or storage space), participants can earn tokens that grant ownership of the network itself as a reward. A subset of these tokens also grants community members rights—typically the ability to vote with their wallets on issues such as protocol design and treasury fund disbursements. These governance tokens are usually distributed directly to early contributors and adopters.

As the space has evolved, many crypto communities have emphasized the importance and potential of on-chain governance. All decisions are formally voted on, with community members using tokens to express their preferences. "Off-chain governance," on the other hand, typically refers to voting processes that do not trigger on-chain protocol changes, such as "signal voting" or other forms of deliberation.

With all attention focused on formal voting mechanisms, insufficient emphasis has been placed on the design of informal gathering spaces for discussion and decision-making. Yet these cultural hubs are the soil in which on-chain proposals and other meaningful contributions take root.

We believe that the social architecture and organizational psychology of crypto community spaces deserve as much attention as formal voting systems. The infrastructure for facilitating discussions (i.e., Discord channels, forum organization, group chat interfaces, etc.) is crucial for the development of thriving virtual communities.

Discord servers have become the de facto places where people can learn about protocols, meet community members, and discover ways to engage with the network. Ideally, in Discord chats and forum debates, the ideas for proposals are generated and developed through dialogue, sometimes leading to healthy disagreements. Informal exchanges conducted through these channels are key to increasing participation and engagement in crypto communities.

Moreover, they help attract and identify key stakeholders and contributors who would not be considered in formal governance systems—such as those who lack sufficient tokens to meaningfully influence the voting process. Therefore, decentralized protocols should create space and conditions for generative informal exchanges within formal governance processes.

2. The Uniswap Community

The Uniswap community is currently one of the largest on-chain governance protocol communities. While it is not the first crypto community to adopt this process, the scale of its initiatives is very broad. Uniswap has over $4 billion in funds and a 24-hour trading volume of $782 million, and the community around Uniswap is conducting large-scale experiments in decentralized decision-making.

The Uniswap protocol is a decentralized cryptocurrency exchange that allows users to swap one cryptocurrency for another without a third-party intermediary. In its initial years, the core team primarily focused on building core functionalities and increasing the use of its platform.

However, last year, Uniswap Labs (the core developers of the protocol) created a native cryptocurrency called UNI and distributed approximately $500 million to all users who executed trades or provided liquidity before September of last year. "Sharing community ownership, developing a vibrant, diverse, and focused governance system that will actively guide the protocol towards the future and self-sustainability."

Uniswap Labs and the Uniswap community hope that the protocol and funds will be managed by those who use it. This formal governance system has two distinct components: on-chain voting regarding protocol parameters and on-chain voting regarding treasury fund allocations. However, there are also more informal aspects to the governance process.

Uniswap has a Discord channel where users and stakeholders gather for chat and support, as well as a Discourse forum for longer discussions about proposals. These platforms play a crucial role in Uniswap's off-chain governance—namely, the social processes and rules that precede on-chain decisions such as fund allocations.

Our research is guided by the following questions: What are the barriers to increasing user participation? How can the process of turning informal ideas into official governance proposals be improved? What does it look like to have a treasury managed by a large number of users spread across multiple platforms? How does collective decision-making operate when each communication interface enforces its own unique norms and culture? Our study with the Uniswap community provides a starting point for answering these questions.

3. Introduction to Uniswap Discord

Our research team conducted ethnographic research on the Uniswap Discord community. We learned about its history and cultural practices through semi-structured interviews and exploratory lurking. Through this process, we identified several thematic tensions between Uniswap Labs' vision for the community and the dynamics we observed in Discord.

In the following sections, we analyze these core contradictions, propose short-term recommendations, outline areas for further research, and explore how the Uniswap team and community can leverage Discord's functionalities to improve its community-oriented governance processes.

Teams, community managers, and crypto politicians interested in understanding how to strategically use social platforms to build thriving crypto communities will find this report valuable.

Users and Roles

Uniswap Discord has various types of users and has assigned several different role types using Discord's role functionality.

1) Regular Users—Users without explicit Discord role labels or self-clarifying relationships with Uniswap.

2) Developers—Developers integrating Uniswap into their applications. The topics and requests from these parties can be categorized into several types: subgraph query assistance, reliability issues, Uniswap interface support requests, and overall explanations of V3.

3) Traders and LPs—Traders and LPs indicate their identity by asking and answering questions in relevant channels.

4) Debaters—Debaters are most active in the #governance and #feedback channels. Debaters are members who voice complaints about Uniswap management or governance activities, using Discord as a public forum to express dissatisfaction. Complaints often target Uniswap Labs, major token holders, and moderators perceived as representing Uniswap as a whole.

5) Moderators—There are several different types of moderators, with several different Discord roles: "Uniswap Friend," "Temp Mod," "Admin," and "Serv.Eth." The different responsibilities among these roles are not clearly or publicly defined.

6) Serv.Eth—The Serv.Eth team is employed by service enterprises, managing support requests through Discord via the Uniswap grant program and several other protocols.

7) Penguin Party—The Penguin Party is a group of open-source developers and UNI token holders who coordinate to vote as a group in Uniswap governance.

4. Theme 1: Users as Customers vs. Stakeholders

Conflict Point

Uniswap Discord can help users get answers to technical questions, but the volume of support content prevents it from becoming a thriving community gathering space.

In interviews, Uniswap Labs and the moderation team expressed their desire for Discord to be a place for community dialogue, sharing ideas about Uniswap's future, and participating in governance. However, the current organization and management approach of Discord fails to realize this aspiration, largely viewing users as customers.

Core Team Intent: Dialogue and Entry

Discord is a place for casual discussions and for people to "feel part of something" (such as sports, culture). There should be spaces for people to "gather around the table and shout at each other." "Problem-solving" is an important component of this. Without a more "lively, bar-like, or dining table space," it is challenging to find more thoughtful, high-quality posts. People should think out loud!

Cultural dialogues occurred in the first year, with longer topics and debates, but after the DeFi summer of 2020, all of this was suppressed and has not recovered.

How This Tension Manifests in Discord

So far, support requests have constituted the largest activity category in Uniswap Discord. As a support hotline, Discord helps community members resolve basic questions about features, scams, and using Uniswap applications. In this way, Discord users are seen as customers entitled to timely answers to their questions and concerns—thus, they may also begin to view themselves in this way.

There are six support-specific channels dedicated to various support topics, but support requests also spill over into most other channels.

In response to the large volume of support requests, the Serv.Eth and moderation teams integrated a semi-automated ticketing system, ticketbot.net. When a support request is made, moderators issue keyword commands in the bot to /tag, prompting users to open a dedicated support channel through Ticketbot. These "ticketbots" create a private support channel visible to moderators.

The team stated: "The amount of support has surpassed all other culture happening there. It's like an invasive weed! It's almost impossible for any real discussion to occur because every channel is flooded with support chat spam, and the support team has to fight against spam and scammers. Support information flows into every channel. It turns into a bad feedback loop. It prevents people who come for other reasons from engaging."

Moderators and The Stable

Uniswap Discord has 7-10 moderators and support staff. Most of these moderators come from existing Discord users and began self-initiating support activities before formally taking on mod roles. In addition to this self-selected user group, Discord is also served by a second group of moderators from Serv.Eth, a company that manages technical support as a service across different Discord servers.

Three months after Discord's launch, Boris (BOR4) emerged as a key community leader, having been a passionate and active contributor before being hired by Uniswap Labs. His job is to help handle the large volume of support requests. The Serv.Eth team joined around the same time.

Recently, this group formed a small committee called "The Stable." The committee received a grant of $114,000 from the Uniswap grant program to reward these community members for their active contributions. Through this initiative, BOR4 secured funding to dedicate his full time to Discord management. Other moderators and assistants funded through The Stable program include roles involved in developing support, non-English community support, interface translation, spam bot prevention, and scam monitoring.

The Stable moderation team has no formally defined metrics or KPIs but manages support in what they deem most appropriate. When asked about their own success criteria, team members reiterated the core team's desire for a space for ideas and discussions but also emphasized the need to retain support functionality within Discord.

Most moderation teams seem satisfied with the existing structure and use of Discord. We believe this is because the mod team is encouraged to interact with the community in ways they previously enjoyed, even though it is now compensated.

This extends to the responsibilities of current community leaders, which involve improving and continuing existing support-centered activities. In terms of formal role expectations, community leaders and Stable members have no responsibility or ability to change Discord in any way.

The moderation team takes it for granted that governance forums and Discord should be separate. They assume people want to have more informal conversations in Discord and structured discussions in the Discourse forum. On the other hand, the moderation team expressed strong opinions that support should not be separated from the community.

Short-term Solutions

Migrate support elsewhere and improve documentation.

All Uniswap Labs team members we interviewed expressed a desire to transition from the heavy support orientation of the Discord server to a space where people can experience a sense of belonging. Several steps can be taken to achieve this goal, but each step comes with its own complexities, some typical challenges of community management, and some unique to Uniswap's situation.

A practical first step is to migrate support activities to other platforms. This seems to be underway, with a dedicated help site (help.uniswap.org) recently being established.

Potential Barriers

However, removing the ticketing system and high-touch personal support from Discord may be perceived as a reduction in user experience for existing users.

For the mods we spoke with, the purpose of the Uniswap Discord community is so closely tied to answering questions and providing support for members that support is seen as a form of community management itself. The decision to migrate support functionality out of Discord needs to consider the wishes, experiences, and beliefs of current mods, who may be more invested in preventing such a change from occurring.

This issue points us to the final potential barrier: there is currently no decision-making process regarding communication and community infrastructure. Is there a possible, necessary, or desirable governance mechanism to inform decisions made around the communication and community infrastructure surrounding Uniswap itself?

While the Uniswap Labs team has made various choices that shape the history of Uniswap's online community, there is currently no member of the core team fully responsible for its long-term community management strategy.

These challenges illustrate a larger issue: Uniswap Labs faces a fundamental contradiction between the pressure to deliver coherent and competitive products and the desire to create a thriving community culture.

The Uniswap protocol and the products built on it are widely used in the crypto space, driving the demand for high-quality user experiences in both products and support.

However, viewing community members as end-users conflicts with the desire to see them as stakeholders, discussion participants, or governance leaders. This conflict is visible in Discord, where support crowds out other conversations, but it is also reflected in the fragmentation of stakeholder types across different platforms.

5. Theme 2: Governance and Accessibility

Conflict Point

Governance is seen as a process that should involve all participants in discussions, but the structure and processes of governance are disconnected, making it inaccessible to ordinary users.

Core Team Intent: Participatory Governance

Discord should be an accessible place for Uniswap token holders to discuss governance, regardless of how many tokens they hold, ultimately driving more proposal activity.

There is now a Discord community that talks a lot to each other, but we want it to be more like a place where UNI token holders discuss governance decisions.

Many governance discussions are dominated by those who hold tokens and control votes. We do not want to cater only to those people; we want to cater to those who hold 50 or 100 UNI.

Uniswap Labs team members initially hoped that Discord would connect informal conversations with formal governance processes. However, the Uniswap ecosystem is fragmented, and governance decisions occur across various public and private channels and platforms.

This situation arguably favors larger token holders over smaller ones—the whales and VCs have no reason to showcase themselves in Discord and engage with the smaller token-holding community because they do not need to vote to achieve their governance goals. But the lack of effective connective processes between these platforms also hinders community self-empowerment and participation in governance.

Discord's Position in the Uniswap Governance Ecosystem

Discord is highly disconnected from other areas of the Uniswap protocol and community.

Uniswap is an ecosystem containing multiple active components, each with different dynamics. Its other three main infrastructure components are the Discourse governance forum, Uniswap Labs Slack, and Uniswap Grants Program Slack. In practice, Discord is largely disconnected from all these areas.

1) Uniswap Governance Forum

Discussions about proposals and governance primarily occur on the dedicated Discourse forum at gov.uniswap.org. The Discourse forum was created after the UNI airdrop to facilitate financial management and fee conversion.

The Discourse forum outlines three key phases of the Uniswap governance process: temperature checks, consensus checks, and governance proposals. The first two phases are off-chain votes aimed at gauging interest and feedback on specific proposals. The final phase is an on-chain vote that may lead to changes in Uniswap protocol parameters (such as fee conversions that have yet to occur) or influence decisions on fund allocations (such as funding for the DeFi education fund).

In addition to the formal voting structure, the Uniswap forum encourages "soft governance"—discussions that inform the direction and implementation processes of policies, but these discussions themselves do not meet the requirements of policy.

The forum attempts to create a respectful environment by presenting itself as a "public park" and "shared community resource." However, it is surprisingly quiet. It is primarily used for proposal discussions and feedback (especially temperature checks), as well as delegation.

However, there is no clear connection between these posts and the discussions occurring in the Discord governance channels, so it is left to individuals to cross-post proposals and voting reminders in Discord. Without this, even promising proposals may lack the visibility needed to enter the next phase.

2) Core Team and Uniswap Labs Slack

The Uniswap Labs core team maintains a closed Slack for internal coordination and is inactive in Discord. This in itself is not a problem, but it represents how protocol updates are shared (or not shared) with the broader ecosystem. The core protocol roadmap is not subject to community governance oversight, and updates on design, building, and release do not require community input. Sometimes, upcoming features and other internal updates are shared with the Discord moderation team when relevant, but they are not shared with Discord users before formal announcements.

3) Uniswap Grants Program and UGP Slack

The Uniswap Grants Program is funded by the UNI treasury through on-chain voting and has been active for about six months. Grantees are invited to a dedicated UGP Slack channel where they can interact with Uniswap Labs members and other grantees.

According to funding manager Ken Ng's focus on developer adoption, the closer ties between teams are given reason because many grants involve building integrations or engineering documentation.

Membership in UGP Slack allows grantees to access influential community members and major token holders through participation in this chat, and governance discussions often take place here privately.

Governance Discussions in Discord

A channel in Discord called #governance hosts casual chats about how Uniswap can or should evolve. Most of the activity here includes questions about how the governance process works and complaints about poor decisions made by the core team or whales and representatives.

While it is normal and expected for disagreements to arise in an open forum like Discord, it is rare for these to lead to posts in the governance forum. Discussions in Discord are passive, following governance recommendations and decisions rather than guiding them.

From our research, it is evident that UNI whales and major representatives are not active participants in this channel. Most Discord users do not hold the 2.5 million UNI required to submit proposals. The #governance channel is not seen as a place to gain community support for proposals, nor is it a place for smaller token holders to attract representatives' attention. Therefore, there has never been a conversation in the Discord #governance channel that started and progressed through the temperature check phase of a governance proposal.

Community calls in Uniswap Discord currently occur every two weeks. They gather interested members to learn about projects, tools, and startups related to Uniswap and discuss ongoing issues and debates in Discord and other community channels. These topics may relate to governance but are often more technical.

Several channels have been created in Discord for active and past on-chain proposals. These correspond only to the final on-chain votes, not to the temperature check and consensus check phases of the process. It is unclear how this policy was created, but the result is a passive (if unintentional) hindrance to discussions of new proposals.

Short-term Solutions

In its current form, the Uniswap ecosystem lacks an effective bridge between the forum and Discord. However, in the short term, these two spaces are likely to continue to exist. What steps can help create a stronger feedback loop or environment for discussions between them?

Discord can serve as an entry platform for how to post on the forum or provide breakout channels to respond more quickly to ongoing topics. Dedicated channels with forum usage FAQs and channels where people update on interesting forum topics are two possibilities.

In each case, it is necessary to explicitly define the expected outcomes and design formats to support them. For example, if more governance proposals from smaller token holders are needed, regular voice calls on workshop proposals would be helpful.

These interventions stem from a key insight: in ecosystems and communities formed around truly decentralized protocols, transparency is not as important as discoverability and accessibility. Inevitably, different stakeholders will have private conversations, and not everyone will know the same information.

However, it is unacceptable for key information on how to participate and availability to be passively hidden from participants. To ensure successful decentralization, channels and opportunities that promote participation and knowledge sharing must be created, facilitated, and actively maintained. Without this, individual groups are more likely to possess full awareness and power.

6. Theme 3: Autonomous Communities

Uniswap Labs has consistently advocated for a "fully decentralized" and community-controlled approach to protocols, funding, and governance. Autonomy here does not mean "leaderless"; it means that organizations or systems can govern themselves. Therefore, individuals at Uniswap Labs refuse to overly engage in the governance process.

However, the result of this approach is a reluctance to cultivate the type of community that can guide the protocol without oversight and guidance. There are not many leaders emerging in the community, and the overall quality of governance proposals is low. If the goal is to have governance decisions originate from the community itself, then Discord and other off-chain social spaces need to be designed more intentionally.

The Discord community lacks a specific strategy or vision and has not established processes or roles for developing community autonomy. Despite high expectations for community self-organization, the non-interventionist approach means the community has not provided opportunities and pathways for taking on greater responsibilities. We will examine two missed opportunities to strengthen community action in Discord activities: community calls and developer chat channels.

Case Study: Community Calls

Utilizing Discord's platform features, community calls provide speaking privileges to 5-10 actively participating members as hosts. They may be moderators, Penguin Party members, or highly active Discord users without formal roles. Boris serves as the primary host and coordinator, responsible for organizing community calls. 50-150 community members participate as listeners. The calls are voice-only and recorded as screen recordings, publicly accessible on The Stable's YouTube channel.

Speakers begin the call by introducing their projects. Boris selects and invites project speakers, and he also poses interview-style questions to the speakers. Individuals can also contact Boris and request to showcase their work in the community call, as was the case with Larry Sukernik from the DeFi education fund, who joined a recent call after they decided to immediately liquidate half of the 1 million UNI received from the treasury, which received largely critical responses on Discord, forums, and Twitter.

Speakers may be members of the Discord community or may be invited to join the server to share their work during community calls. These presentations take up about 20-30 minutes of call time, serving a promotional purpose, primarily explaining technical projects and posing questions, assuming the audience has a relatively high level of background knowledge.

Other hosts on stage may also provide additional comments or ask their own questions to Boris, while the audience can send questions via a dedicated community call text chat channel, although this does not guarantee that the hosts will relay the questions to the guest speakers.

For the audience, there is almost no additional encouragement to participate in discussions via chat, and there is little chance of being invited on stage to ask questions verbally. The maximum impact Discord members can have on community calls is to suggest adding projects to the agenda through a dedicated agenda channel or privately via Google Forms, although this also does not guarantee they will be selected by Boris for inclusion in the agenda.

Overall, community calls reflect the responsiveness of Discord discussions; for example, the DeFi education fund was discussed only after the community reacted more broadly and controversially to their activities, but there was no discussion in the preceding weeks, despite ongoing discussions about their proposals on forums and Twitter.

Case Study: Developer Chat

Developers primarily use developer-focused chat to discuss the integration and explanation of Uniswap protocol features and to seek help from one another. Questions are posed and answered in an ad-hoc manner, without formal guidelines.

Developer conversations often require multiple back-and-forth exchanges between participants. The lack of threading in Discord means these conversations are interspersed with more requests, necessitating extensive use of the quote-reply feature. This can make the chat visually chaotic, with many questions going unanswered. It is common to see repeated inquiries or questions being asked multiple times.

While this is an area where community members frequently help each other, in practice, the boundary between developer questions and support requests is quite blurred. Some support staff have taken on de facto developer relations roles in Discord.

Short-term Solutions

A short-term solution to this may be to hire a community manager responsible for cultivating the community outcomes that Uniswap Labs envisions.

In recent years, "community manager" has become a popular industry title, but it evokes a somewhat hierarchical, top-down approach to community development. They are expected to align themselves with Uniswap's growth goals, which often exceeds the capabilities typically expected of PR experts or social media marketers.

One approach to addressing this issue is to hire (and possibly train) a highly dedicated Discord user as a community manager. Another solution is to hire a more experienced community manager and onboard them gradually into Uniswap's culture and community, allowing potential community managers time to first observe, learn, and understand community behaviors to better shape them.

If Uniswap Labs intends to cultivate a stronger developer community and ensure that ideas discussed in Discord are more likely to become formal governance proposals, they will need to design their off-chain social engagement processes more thoughtfully. This may require incentivizing ideal behaviors: rewarding exemplary behavior in Discord or modeling the behaviors they wish to see by core team members.

It may also require more strongly curbing less desirable behaviors: establishing stricter rules so that people can only post in certain channels after spending a certain amount of time learning the rules. It may also create a stronger accountability model and metrics for The Stable members. In any case, this transformative process will require a dedicated community steward and advocate to address the challenges along the way.

Finding the right person will be difficult, which may be challenging: individuals with "intrinsic motivation" from the community are not necessarily the best managers. On the other hand, as one core team member pointed out:

"This is tough because Uniswap has a specific voice and culture around it and its brand. We are somewhat like OG DeFi, so we need someone who has a deep understanding of the space and its history and knows people, immersed in Ethereum culture. These types of people have been around and are quite wealthy, so they are hard to recruit because they want to do what they are interested in. What I want to do is find people who are already in the community and elevate them to formal members of the team, but it's hard to know who the good ones are."

Larger Potential Issues

If an autonomous community cannot be created without leadership and guidance, Uniswap Labs ultimately must ask itself: What kind of community does it want to have? What should the community revolve around? Why?

If self-leadership in the community within the Uniswap ecosystem is occurring, it is happening in a more informal way through the grants program. The grants program plays an unofficial role in off-chain governance as a channel soliciting more active participation and establishing closer relationships with important token holders and the core team.

We believe the Uniswap grants program has a unique opportunity to support the community autonomy that Uniswap Labs hopes to see. Communities often form around shared values and visions for the future—the grants program allows participants to directly influence which futures receive funding.

Cryptographic technology is one of the most vibrant and rapidly developing industries. However, it remains a nascent ecosystem, and we are just beginning to explore the new opportunities and challenges that community-driven open networks bring.

From this perspective, analyzing the social processes and spaces through which crypto communities implement governance power is crucial for building a strong decentralized ecosystem.