Behind Uniswap's cross-chain expansion is a battle between top venture capital firms a16z and Jump

Authors: Frank Chaparro, Michael McSweeney, The Block

Compiled by: Deep Tide TechFlow

In the community governance vote held from January 27 to January 31, Wormhole won the vote to become the cross-chain bridge between Uniswap and BNB Chain. A total of 8,000 addresses participated in the vote, involving 45 million governance tokens (UNI). Wormhole received 62% support, while LayerZero came in second with 37% support. Wormhole will ultimately be used to enable Uniswap v3 users on BNB Chain to participate in the Uniswap DAO governance process based on Ethereum.

Summary:

• The struggle among behind-the-scenes investors could influence which cross-chain bridge is used in Uniswap's next steps.

• As of now, Wormhole seems to be a choice, but this is not the final outcome.

The community conducted a "temperature check" vote to see which cross-chain bridge would be used for the decentralized exchange's third iteration, with most votes supporting Wormhole.

However, there is a caveat.

Today's choice is not technically the final result. The formal vote to approve Wormhole as the cross-chain bridge between Ethereum and BNB Chain has not yet arrived.

But according to three sources, the struggle among behind-the-scenes cryptocurrency investors could shift the outcome in a different direction—this involves hundreds of millions of dollars in stakes.

This struggle involves venture capital firms a16z and Jump, which support LayerZero and Wormhole, respectively. One source familiar with the process said that a16z, holding 15 million voting tokens, could not participate in the temperature check due to its token custody setup.

a16z's investment partner Eddy Lazzarin seemed to confirm these issues in a forum post, stating that the company could not participate in the temperature check.

"To be completely clear, if we could technically do so, in future snapshot votes, we a16z will vote LayerZero with these 15 million voting tokens." Lazzarin wrote. "So for the purposes of the 'temperature check,' please count us that way."

Another source stated that the Uniswap Foundation has not indicated whether it will fulfill its written commitment to LayerZero. According to today's official statistics, Wormhole won the vote by approximately 11 million votes.

Wormhole supporters hope that a16z's vote aligns with the temperature check vote; one person close to the project said, "If a16z opposes the community vote and tries to block it, I would be shocked, that would be truly despicable."

A spokesperson for a16z confirmed that the company plans to participate in any on-chain voting. As of the time of publication, Jump had not commented on this report.

The debate between the two cross-chain bridges partly revolves around the security differences between Wormhole, LayerZero, or other competitors. Cross-chain bridges have become targets for numerous attacks, including the $325 million attack on Wormhole last February.

A representative stated that later on Monday, supporters of both LayerZero and Wormhole attempted to pressure representatives of Uniswap tokens to vote in their favor.

In addition to security concerns, there is a financial aspect—specifically, once integrated, the winning cross-chain bridge could acquire a significant amount of staked assets. Therefore, investors associated with the selected protocol could reap a substantial windfall.

When contacted for comment, LayerZero emphasized Lazzarin's forum post and stated, "We believe the goal of the temperature check is to vote on governance willingness."

"Given these facts, we believe LayerZero is the preferred bridge in the temperature check, but we think the Uniswap Foundation should include both options in the final on-chain vote, as that is how governance issues should be decided and has always been determined by Uniswap," the startup said.