In a report published yesterday, market analysis firm Glassnode chided Uniswap for not being more transparent about elements of its token protocol and suggested it may be deviating from its promise to vest tokens set aside for the Uniswap team and investors.

Report Questions Uniswap Token Distribution to Team, Investors

When Uniswap, the decentralized exchange for Ethereum-based ERC20 tokens, unveiled its UNI governance token on September 16, it said tokens distributed to team members and investors would vest over four years. But those tokens currently appear to be sitting in standard Ethereum addresses, where they can be used by anyone who controls the key.

According to the report, “This method of storing the tokens gives the Uniswap team and investors what essentially amounts to admin rights over the protocol.”What is Uniswap and How Does It Work?

Though it assumes Uniswap is acting in good faith, either to transition to decentralized governance over time or to repel attacks from centralized exchanges, Glassnode wants to know: Who controls the keys and why are the tokens not locked in a smart contract?

In its UNI announcement, Uniswap stated that 1 billion UNI had been minted and would become accessible over four years. While the bulk (600 million) were set aside for Uniswap community members, just over 215 million were reserved for current and future employees, and 178 million were earmarked for investors. Advisors were to receive just under 6.9 million tokens.

UNI tokens are supposed to be vested over the course of four years. That means team members and investors wouldn’t be able to access all of their tokens until the four years expire. But as Glassnode notes, vesting details are hazy.

You might be asking: So what? Whether Uniswap gets them in batches over four years or has them all now, same difference, right?

There are two main reasons timing is an important detail.

The first is price. UNI tokens are currently selling for over $5 a pop. If someone were to dump millions of them on the open market, the price of the coin could collapse. Of course, there’s no indication Uniswap would come all this way to create a usable product just to cash out and blow it up. But that’s essentially what the creator of its much younger clone, SushiSwap, did before repenting.

Even without a massive rug pull, selling tokens can affect price, at least in the short term. In the past, Ripple, the main holder of XRP, has been taken to task for selling large volumes of the cryptocurrency on the market. Former Ripple founder Jed McCaleb, who owned 9 billion XRP, was once selling off about 500,000 XRP each day.

All of which make it important for community members to know more about the vesting process.A Massive Honeypot: Ren Holds $100M in Bitcoin in Centralized Wallet

Second, UNI’s primary purpose isn’t to stuff wallets; it’s a governance token. Those who possess it control the network, just like shareholders vote on a company’s direction. But as with company shares, you need a certain amount of tokens in order to be truly relevant. At the moment, just to submit a governance proposal, a user needs to have—or have delegated to them—at least 10 million tokens. That benefits holders that can vote as a team, such as Uniswap.

Moreover, token holders make real financial decisions. They have control over the governance treasury, which is currently stocked with 430 million UNI. Those funds, locked by smart contract, begin being distributed in October. Forty percent of the supply is released in year one, then 30% in year two, and so on until it’s empty. How the funds are used, however, is determined by vote.

Glassnode’s report reads: “Even if we assume that the team and investors will not use tokens that have not vested, Uniswap’s team and VC investors will have a disproportionate amount of power in the early stages of governance.”

Ryan Watkins, a researcher with Messari, says that’s intentional. “It allows the team to still play a significant role in governance while the project is still young,” he told.

But that’s something the Uniswap team says it won’t do…at least, kinda. Its September 16 UNI announcement states, “Team members will not participate directly in governance for the foreseeable future, although they may delegate votes to protocol delegates without seeking to influence their voting decisions.”

As the Glassnode report notes, “While the seemingly unattainable 1% proposal threshold may seem like a power grab on the part of the Uniswap team, it is more likely that this model was implemented with benevolent intent, in order to protect the protocol from radical changes in the early stages of its transition to decentralized governance—even at the cost of community disenfranchisement.”

And enfranchisement is really what’s at stake here. Who’s controlling the decentralized exchange? At the moment, it appears, it’s still the people who created it.