Uniswap Governance Proposal UNIfication Advances Fee Switch and Token Burn to Create Deflationary Effect
The Uniswap governance proposal called UNIfication seeks to activate a fee switch that channels part of trading fees to burning UNI tokens, creating a deflationary effect aimed at tying protocol revenue more directly to UNI supply dynamics for the first time.
The proposal has surpassed the quorum with over 69 million UNI votes in favor, well above the 40 million required for approval. Voting ran from December 20 to December 25, with minimal opposition of about 740 votes against and roughly 1.5 million abstentions. More than 6,000 addresses participated, and support was near 100% among active voters.
If approved, a two-day time lock would precede implementation, during which 100 million UNI tokens would be immediately burned from the Uniswap Foundation's treasury. Additionally, the fee switches on Uniswap v2 and v3 would begin burning UNI on the mainnet. The governance package also authorizes Protocol Fee Discount Auctions designed to boost liquidity provider returns under Wyoming DUNA governance.
Key backers of UNIfication include Variant founder Jesse Waldren, Synthetix founder Kain Warwick, and former Uniswap Labs engineer Ian Lapham.
Market reaction has been positive, with UNI rising approximately 25% since voting began and currently trading around $6.08. Prior to this, the token had dropped to $4.88 after a month-long slump but briefly approached $9.70 in November. Near-term price resistance is noted around $6.80 to $7.20, with heavier supply clustered near $9 and above.
Uniswap remains the largest decentralized exchange by trading volume, with over $4 trillion in trades recorded since 2018.
