Uniswap Labs and Uniswap Foundation, two of the main companies helping to drive the Uniswap protocol, are joining forces to propose a radical new governance proposal that would completely change the way the ecosystem currently operates.
The proposal, called “UNIfication,” aims to align incentives across the Uniswap ecosystem and position the protocol as the default exchange for tokenized assets. It would do so by enabling protocol fees, burning millions of UNI tokens, and consolidating key project teams under a single growth strategy, according to a blog post dated November 11 but briefly published on November 10.
Under the proposal, which DAO members will vote on, the protocol would redirect a portion of trading fees to a UNI burning mechanism and fees from Uniswap’s layer 2 network, Unichain, would also go into the burning.
Other features such as protocol fee reduction auctions (PFDA) would allow traders to bid on fee reductions, internalizing the MEV (maximum extractable value) and further powering the burn process, the team claims. Additionally, Uniswap v4 would evolve into an on-chain aggregator, collecting fees from external liquidity sources via new “hooks.”
Uniswap Labs also proposed a retroactive burn of 100 million UNI from the treasury, which the team said would be equivalent to the amount that could have been burned if protocol fees had been active since launch.
Uniswap’s tokenomics changes are not the only restructuring happening in the ecosystem. Uniswap Labs, which is the leading development company supporting the Uniswap protocol, will be integrated into the Uniswap Foundation ecosystem teams. Co-founders Hayden Adams, Devin Walsh and Ken Ng, along with Callil Capuozzo and Hart Lambur, will serve on the five-member board overseeing the new structure, the proposal states.
Uniswap Labs will also move away from monetizing its products, including the Uniswap interface, wallet, and API, and will instead focus exclusively on growing the protocol. Fees on these products will be set at zero, with any future monetization directly tied to the interests of UNI holders.
“These products already generate significant organic volume for the protocol. Removing fees makes them even more competitive and brings higher quality volume and integrations, leading to better results for LPs and the entire Uniswap ecosystem,” the teams wrote in their press release.
Additionally, the team proposes that Uniswap governance creates an annual growth budget of 20 million UNI, starting in 2026, distributed quarterly.
If adopted, UNification would mark the most significant evolution of Uniswap’s governance and economics since its symbolic launch in 2020.
Read more: Uniswap Labs officially launches Layer 2 “Unichain”
