UNI Token's Majority of Value Appreciates: Details of the Uniswap Protocol Fee Reform

The Uniswap community has approved the proposal to activate the protocol fee mechanism and burn millions of UNI tokens with an overwhelming majority vote. This decision shifts the UNI token from being merely a governance tool to an asset with economic value directly linked to the protocol’s financial success. The “UNIfication” proposal presented by Uniswap Labs and the Uniswap Foundation marks a milestone in shaping the future of the largest decentralized exchange in the crypto space.

The Most Dominant Vote in History: Approval of the UNIfication Proposal

During the five-day voting period, an overwhelming majority was achieved with over 125 million votes supporting, while the number of opposing votes was limited to just 742. This ratio reflects record levels of participation and consensus in DeFi governance history. The community demonstrated an unprecedented unity regarding the evolution of the Uniswap protocol, highlighting how critical this reform is for the platform.

Protocol Fees and Token Burn: Uniswap’s New Economic Model

Until now, all protocol fees generated by Uniswap were directed to liquidity providers, and the UNI token functioned solely as a tool granting participation rights in the platform’s governance processes. The new reform will fundamentally change this setup. On average, Uniswap generates approximately $2 billion in daily trading volume and about $600 million annually in protocol fees, a portion of which will be directed to an automated on-chain burn mechanism. This will link the platform’s usage directly to a reduction in UNI supply, potentially supporting the market price.

The 100 million UNI tokens to be burned from the treasury, valued at over $590 million, represent a retrospective estimate of what could have accumulated since Uniswap’s founding in 2018 if protocol fees had been active. This symbolic move is part of the long-term vision of the governance reform.

Market Reaction and the New Role of UNI

According to new data, the UNI token increased by 2.53% over a 24-hour period, reaching $3.90. The price movement reflects positive reactions from market participants to this reform package. The token will now operate with a mechanism that captures the real economic value created for governance participants.

This transformation marks an important starting point for the sustainability models of DeFi protocols. Uniswap’s community-supported approach is set to ensure that liquidity and trading activities within the network generate long-term value for the Uniswap ecosystem.