Uniswap's Token Burn and Protocol Fee Proposal Receives Overwhelming Voter Support
Proposals to activate protocol fees and initiate a token burn of UNI received overwhelming support from voters, with over 125 million votes in favor and only 742 against during a five-day voting period.
The initiative is part of the UNIfication plan developed by Uniswap Labs and the Uniswap Foundation to evolve UNI from a governance-only token into a value-accruing asset. This transformation is achieved by linking the usage of the Uniswap protocol to a reduction in token supply through a burn mechanism.
The on-chain burn mechanism would divert a portion of protocol fees to burn UNI tokens, directly tying platform activity to the token's supply reduction. In addition, there will be a retroactive burn of 100 million UNI tokens held in the treasury, worth over $590 million at current rates, to account for fees that could have accrued since Uniswap's inception in 2018.
Uniswap is currently the largest decentralized exchange, with reported daily trading volumes around $2 billion and annualized fees approximating $600 million, according to DeFiLlama data. Previously, all protocol fees were directed to liquidity providers, and the UNI token served solely a governance role without any direct economic connection to platform activity.
