Decentralized Exchange Uniswap Faces Community Backlash After Delisting 100 Tokens

What Happened: Uniswap UNI/USD, the leading decentralized crypto exchange, has restricted access to a number of tokens on its platform.

“Today, consistent with actions taken by other DeFi interfaces, we have taken the decision to restrict access to certain tokens through app.uniswap.org,” said Uniswap Labs in a blog post on Friday.

The company that built Uniswap’s front-end web app went on to note that the restrictions on tokens only applied to the front-end app, while the Uniswap protocol itself remains “entirely autonomous, immutable, and permissionless.”

Still, the token delisting drew in wide criticism from the larger crypto community, who took to Twitter to share their disapproval.

Why were these exact tokens chosen and why weren't $UNI governance token holders asked for input?https://t.co/rEVJcPayLm

— ChainLinkGod.eth 2.0 (@ChainLinkGod) July 23, 2021

Why It Matters: Uniswap officially delisted 100 tokens from its front-end interface, including synthetic stock tokens from Synthetix SNX/USD, option tokens from UMA UMA/USD, mirrored tokens from Mirror Protocol MIR/USD, and insurance tokens from Opyn.

Market participants questioned the reasons for the seemingly random selection of tokens that were delisted. Although Uniswap founder Hayden Adams explained that some tokens, like Tether Gold XAUT/USD, were removed due to a bug in the token’s smart contract, many took issue with the lack of decentralized governance involved in the decision.

“We want the governance process for censoring these to be more transparent. This whole debacle really questions the purpose of $UNI,” said one user on Twitter, with many others echoing a similar sentiment.

Read also: Ethereum's Top Decentralized Exchange Just Got Faster: Uniswap Launches On Optimism

It seems the devs run the Uniswap project as they see fit and use the UNI token just as a ''decentralization'' camouflage for their -obvious as of now- centralized, mutable, establishment-supporting, pro-front-running exchange.

— S. Z. Tanyel, MD, DDS (@tanybro) July 24, 2021

What happened to decentralisation? Haven’t they lost the plot with this?

— notEezzy (@notEezzy) July 23, 2021

Other market participants suggested that this move might pave the way for Uniswap’s competitor SushiSwap SUSHI/USD to become the more dominant decentralized exchange.

Price Action: At press time, Uniswap’s native token UNI was trading at $18.69, gaining 4.73% over the past 24-hours.