Uniswap’s long-standing debate over how or whether the protocol should return value to UNI holders is about to be resolved.
The protocol’s “unification” proposal has already reached quorum, with over 69 million UNI tokens voting in favor and virtually no opposition as of Monday. Voting remains open until December 25, but the margin suggests the outcome is largely decided.
At the center of the proposal is a change that UNI holders have been waiting for years: the activation of the “fee change” protocol.
The proposal would redirect a portion of trading fees – about one-sixth – to a pool controlled by the protocol. These fees would then be used to burn UNI tokens, reducing supply as trading activity grows. Despite being the largest decentralized crypto exchange, Uniswap has so far routed all trading fees to liquidity providers, leaving UNI as a governance-only token with no direct economic connection to the platform’s business.
The proposal effectively transforms UNI from a purely governance token into a value-generating asset by directly tying the token’s value to the exchange’s daily trading volume.
Based on current volumes, the fee change could translate into around $130 million per year in the burn mechanism, as analyzed by CoinDesk in November.
Along with the fee change, the proposal includes a one-time consumption of 100 million UNI from the Treasury, worth approximately $940 million at current prices.
Uniswap processes nearly $150 billion in transaction volume each month across more than 30 blockchains, according to data from DefiLlama.
Proponents argue that flipping the fee switch finally aligns Uniswap’s scale with its token economy, transforming UNI into something closer to a governance asset tied to cash flow rather than a purely speculative asset.
The proposal also reshapes the internal structure of Uniswap. It consolidates Uniswap Labs and the Uniswap Foundation under a single operating and economic model, moving from a grants-heavy governance approach to a more execution-focused setup focused on protocol growth, distribution, and competitiveness.
