Ripple CTO Sparks Controversy by Questioning Uniswap’s Decentralization
Summary: Uniswap (UNI) was an early participant in the Decentralized Finance (DeFi) ecosystem, but Ripple's CTO David Schwartz recently noted that this did not necessarily qualify it as a decentralized company. This opens up a new debate of DEX coming under the radar of SEC.
Even though Uniswap (UNI) was an early participant in the Decentralized Finance (DeFi) ecosystem, Ripple’s outspoken CTO David Schwartz recently noted that this did not necessarily qualify it as a decentralized company.
The Ripple CTO has said that Uniswap is not a decentralized platform, which many critics see as an insult to the DEX protocol. There is an ongoing controversy on Twitter about whether or not open source protocols are decentralized, and this discussion about the decentralization of the platform emerged there.
Decentralized or Not?
The CTO of Ripple reiterated his past claims that a decentralized exchange cannot be considered decentralized if its underlying technology is not open source. Schwartz expands his position to say that he thinks Uniswap Labs decided against making the V3 engine open source because of the governance scheme that comes with the V1 and V2 forks.
Businesses that cater to people who may be seen as a single entity whose activities would provide revenues for those individuals have woken up in response to the US Securities and Exchange Commission’s (SEC) escalating crackdowns on cryptocurrency platforms.
Uniswap Leads the Way
While there is still some room for debate about what constitutes a common interest under the Howey Test, most crypto businesses and groups are taking precautions to avoid legal trouble.
Despite the fact that the Ripple CTO claims the Uniswap V3 engine is not as decentralized as many may believe, the flaws in previous versions will likely be fixed in the promised V4 engine. The Uniswap V4 engine has several capabilities, including the ability to create in public and get input that may guide protocol improvements before launch.
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Uniswap has come a long way in a short amount of time; it is now the protocol with the highest trading volumes among all similar businesses, and it was the first to employ the Automated Market Maker (AMM) engine used by most DEXs.