Uniswap News Today: Uniswap Activates Fee Switch, Burning Tokens to Boost Holder Value

Uniswap, recognized as the top decentralized exchange (DEX) on

, has brought in $3.69 million in revenue over the last month, with total earnings reaching $178 million since the much-discussed "fee switch" was implemented, according to . This initiative, jointly put forward by Labs and the Uniswap Foundation on November 11, seeks to reroute trading fees to tokenholders and decrease the amount of —the protocol’s governance token—in circulation, as detailed in . Following this, UNI’s price jumped 38%, trading above $9.70 as of November 12, as noted in .

The "UNIfication" governance proposal presents a comprehensive approach to better align the protocol’s financial incentives with the interests of tokenholders. Central to this plan is turning on the fee switch, which will direct a share of trading fees into a "token jar" that users can access by burning UNI tokens, as described in

. This setup is intended to create deflationary effects by lowering the available UNI supply. The proposal also calls for the immediate burning of 1 billion UNI tokens from the treasury—representing 16% of the circulating supply—to compensate for fees that could have been burned since the protocol’s launch in 2020, according to .

Initially, the fee switch will be enabled for Ethereum mainnet v2 pools and v3 pools, which together account for 80%-95% of liquidity provider (LP) fees, before expanding to Layer 2 solutions like Unichain and aggregator hooks, as outlined in

. Unichain, which launched nine months ago, has already produced $7.5 million in annualized fees that will now be included in the UNI burn process, as reported in . The proposal also introduces a Protocol Fee Discount Auction (PFDA) to boost LP earnings by capturing Miner Extractable Value (MEV)—a benefit that has previously favored searchers over LPs, as explained in .

Uniswap’s leadership described these updates as ushering in a "new era" for the protocol, combining the non-profit Uniswap Foundation with Labs, the group responsible for protocol development, as mentioned in

. This merger is intended to simplify governance and focus on expanding the ecosystem, supported by a quarterly "Growth Budget" funded by treasury allocations, as reported in . Devin Walsh, Executive Director of the Uniswap Foundation, co-authored the proposal with founder Hayden Adams, who pointed out that regulatory issues had postponed the fee switch for years, as noted in .

The market has responded strongly, with UNI’s market cap climbing above $6 billion and the token moving up to become the 34th largest cryptocurrency, as reported in

. The protocol’s annualized revenue, fueled by more than $4 trillion in total trading volume since 2018, is expected to surpass $2 billion across all deployments, as noted in . Experts believe that the fee switch could further cement Uniswap’s leadership in decentralized finance (DeFi), as both liquidity providers and tokenholders stand to gain from a more robust revenue model, according to .