Uniswap UNI Token Surges 38% on UNIfication Proposal: Fee Switch and Burn Mechanism Explained

Uniswap UNI token has exploded 38% to $9.70, as the Uniswap Foundation and Uniswap Labs unveiled the “UNIfication” proposal—a sweeping governance overhaul activating protocol fees, burning 100 million UNI tokens, and merging key teams to supercharge the ecosystem’s long-term value.

The UNIfication Proposal: Fee Switch Activation and UNI Burn

The UNIfication proposal, co-authored by Uniswap founder Hayden Adams, Foundation Executive Director Devin Walsh, and researcher Kenneth Ng, aims to align incentives by turning on protocol fees for the first time since UNI’s 2020 launch. Key elements include:

• Fee Switch: Redirect a portion of DEX and Unichain sequencer fees to UNI holders via burns, creating deflationary pressure.
• 100 Million UNI Burn: Immediately torch 16% of circulating supply from the treasury, representing “fees that could have been burned at launch.”
• Protocol Fee Discount Auctions: Boost LP returns by auctioning fee discounts, enhancing liquidity.
• Uniswap Growth Budget: Quarterly $20 million from treasury for protocol and ecosystem development.
• Team Merger: Absorb Foundation’s ecosystem teams into Labs for unified strategy.

“We believe this proposal positions the Uniswap Protocol to win as the default decentralized exchange for tokenized value,” the Foundation stated, emphasizing its role in processing $4 trillion in cumulative volume since 2018.

• Fee Revenue: $7.5M annualized from Unichain; $137M from frontend since launch.
• Burn Impact: Reduces supply; aligns with 70% community push for fees.
• Merger Benefits: Streamlined development; conflict-free governance.

(Sources: Coingecko)

UNI Token’s Rally: From $4.95 Lows to $9.70 High

UNI’s 38.5% surge from $4.95 weekly lows to $9.70 reflects investor excitement, pushing market cap above $6 billion and ranking #34. The token, down 20% YTD before the proposal, now boasts 86% bullish sentiment, with volume spiking 150% to $1.2 billion. This mirrors 2021’s 200% pump on fee switch talks, but UNIfication’s comprehensive reforms—fees, burns, and mergers—could sustain 20-50% upside if approved.

Why Now? Uniswap’s Evolution in Tokenized Assets

Uniswap, the top DEX with $4 trillion historical volume, faces pressure from L2s and CEXs. UNIfication counters this by making UNI a “default tokenized exchange” token, redirecting Labs’ $137 million frontend fees to burns. The merger resolves conflicts, with Labs halting interface/wallet/API earnings, focusing on protocol growth. As RWAs hit $16 trillion potential by 2030, Uniswap’s fee auctions and grants position it for $500 million+ annual revenue.