Uniswap (UNI) token surged 38% to $9.70 following a major proposal unveiled jointly by the Uniswap Foundation and Uniswap Labs. Named the “UNIfication” proposal, it introduces significant changes to Uniswap’s protocol economics and governance structure, aiming to enhance the value and appeal of holding UNI tokens.
### Key Highlights of the UNIfication Proposal
At the core of the proposal is the activation of a protocol-level fee mechanism that will burn UNI tokens, reducing the circulating supply and potentially boosting the token’s value. In addition, Uniswap Labs and the Uniswap Foundation plan to burn 100 million UNI tokens from the treasury, representing approximately 16% of the current circulating supply. This burn is retroactive, equating to the amount that would have been burned if protocol fees had been active since Uniswap’s launch.
The proposal also includes the creation of a Protocol Fee Discount Auctions system. This innovative feature will enable traders to bid for fee discounts, capture Miner Extractable Value (MEV), and contribute to the token burn process. Moreover, fees generated on Unichain, Uniswap’s Ethereum Layer 2 network, will now be directed to the UNI burn mechanism. Since its launch nine months ago, Unichain has produced $7.5 million in annualized fees.
### Organizational and Structural Changes
Beyond tokenomics, the UNIfication proposal introduces organizational restructuring. Uniswap Labs will absorb the ecosystem teams formerly under the Uniswap Foundation. Oversight of these changes will be conducted by a five-member board consisting of co-founders Hayden Adams, Devin Walsh, Ken Ng, alongside Callil Capuozzo and Hart Lambur.
Uniswap Labs will cease monetizing its core products, setting fees to zero on its interface, wallet, and API services. The team believes eliminating these fees will improve competitiveness, with any future monetization efforts aligned directly with UNI holders’ interests.
### Growth Budget and Future Development
The proposal also outlines the establishment of a Growth Budget to support ongoing protocol and ecosystem development. Starting in 2026, 20 million UNI tokens will be distributed annually on a quarterly basis to fund this growth. Supporting decentralized finance (DeFi) builders remains a high priority for the Uniswap Foundation.
Furthermore, Uniswap v4 is set to evolve into an on-chain aggregator. It will collect fees from external liquidity sources using new hooks, positioning Uniswap as the default decentralized exchange for tokenized value.
### Market Impact
Following the announcement, the UNI token climbed to $9.70, pushing its market capitalization above $6 billion and securing its place as the 34th largest cryptocurrency. Since its launch in November 2018, Uniswap has processed approximately $4 trillion in cumulative trading volume, maintaining its status as the leading decentralized exchange by volume.
The UNIfication proposal will now be put to a vote among DAO members, determining the future direction of the Uniswap protocol and its governance. If approved, these changes promise to enhance Uniswap’s competitiveness, strengthen its economic incentives, and solidify its position at the forefront of decentralized finance.
https://coincentral.com/uniswap-uni-price-token-rises-38-following-fee-switch-and-burn-proposal/
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