Uniswap Fee Switch Set to Launch as Community Vote Approaches Finalization

The eagerly awaited Uniswap protocol fee switch, known as “UNIfication,” is on track to be approved and implemented later this week. The proposal has met the required 40 million votes to initiate one of the most significant upgrades in the history of this decentralized exchange, which has been active for seven years.

Key Takeaways

The UNIfication proposal, a significant upgrade for Uniswap, is on track to be approved, having received over 62 million supportive votes.
A successful vote will enact changes to fee switches and burn 100 million UNI tokens, improving the token's long-term appeal.
Prominent figures in the crypto space have shown their support for the proposal.
Uniswap remains committed to facilitating continuous development and will maintain grant distributions for protocol improvement.

Uniswap fee switch to go live as community vote set to pass

Since the voting began on December 20, nearly 62 million votes have been cast in support of the UNIfication proposal as of early Monday. Voting will conclude on Thursday, which also happens to be Christmas Day.

Uniswap Labs CEO Hayden Adams announced that if the vote is successful, there will be a two-day timelock period during which fee switches for Uniswap v2 and v3 will be switched on the Unichain mainnet, resulting in the burning of more Uniswap (UNI) tokens.

Under this proposal, 100 million UNI tokens will be burned from the treasury of the Uniswap Foundation, alongside the introduction of a Protocol Fee Discount Auctions system aimed at enhancing returns for liquidity providers.

These updates are anticipated to greatly enhance the supply-demand dynamics of UNI tokens, making them a more attractive option for long-term holders. Since the beginning of the UNIfication voting period, the price of UNI has climbed around 25%, trading currently at $6.08. This price increase has helped steer the token out of a month-long decline, during which it hit a seven-month low of $4.88.

Change in UNI’s price over the last week. Source: CoinGecko

The announcement of the UNIfication proposal in early November triggered a significant rally for the UNI token, with its price surging nearly 40% from around $7 to as high as $9.70 on November 11. As the largest decentralized exchange, Uniswap has managed over $4 trillion in trading volume since its launch in November 2018. According to CoinGecko, UNI ranks as the 39th largest token by market capitalization, valued at $3.8 billion.

Leading Figures Back the UNIfication Proposal

Prominent figures within the cryptocurrency world have supported the UNIfication proposal, including Jesse Waldren, the founder and managing partner of the crypto-focused venture capital firm Variant; Kain Warwick, the founder of decentralized finance platforms Infinex and Synthetix; and Ian Lapham, a former engineer at Uniswap Labs.

Out of all votes cast, only 741, or about 0.001%, have opposed the proposal, while just over 1.5 million votes have abstained.

Vote distribution for the UNIfication proposal as of late Sunday. Source: Uniswap

Commitment to Ongoing Protocol Development

When the UNIfication proposal was introduced, the Uniswap Foundation assured developers that it would continue to issue grants aimed at enhancing protocol development and growth. Supporting developers will remain a priority for the Foundation.

To achieve these objectives, the Uniswap Foundation plans to establish a Growth Budget, which will include distributing 20 million UNI tokens.