Uniswap creates the DUNI legal entity to beef up compliance and governance to make it sustainable, maintaining decentralization in the DeFi area.

Uniswap is moving to a decentralized governance structure in the proposed creation of a new legal entity, DUNI that will help strengthen compliance and governance of the DeFi ecosystem. The initiative of the Uniswap Foundation aims to accommodate regulatory conformity, governance management, and adherence to taxes and simultaneously the longevity of the platform. It is envisaged that under the suggested DUNA governance model, DUNI will serve as a centralized legal and operational resource center to oversee governance functions and coordinate with the service providers, including ensuring that there are legal and tax compliance measures undertaken.

To fund this transition, the Foundation has reserved through what is known as a historical tax obligation and a legal defense fund, the tokens against historical tax, i.e., $16.5M of UNI. The structure will also divert a large percentage of the liquidity provider fees to the DAO treasury which will aid in the financial soundness of the DAO as well as community participation.

The General Counsel of the Uniswap Foundation Brian Nistler said that this legal framework would boost the abilities of DUNA significantly.

The goal of these compliance and governance upgrades is to achieve similar levels of protection as provided by the law with less centralization, to maintain trust in the community. New changes come as the level of institutional interest in Ethereum and DeFi is increasing, and proposed Ethereum network updates are set to enhance its scalability and provide cost reduction.

Formalizing governance procedures and complying with standards set by regulatory bodies means Uniswap can act as an example for the rest of the DeFi world, which has to cope with the changing regulations.