After the Uniswap Foundation and Uniswap Labs unveiled a plan to increase investor interest in holding the token, the native token that powers Uniswap saw an increase of more than 31% in less than 24 hours.
According to a joint proposal from the Uniswap Foundation and Uniswap, activating a protocol-level fee mechanism to burn Uniswap (UNI) tokens and creating a Protocol Fee Discount Auctions system to boost liquidity provider returns are two of the possible modifications described in the “UNIfication” proposal.
$UNI price rises by 30%
To further enhance the supply and demand dynamics of UNI, the governance token underlying the Uniswap decentralised exchange, they also want to burn 100 million UNI, or around 16% of the UNI’s circulating quantity, from the treasury.
The same UNI burn mechanism will also get revenue on Uniswap’s Ethereum layer 2, Unichain, which has produced $7.5 million in yearly fees since its introduction nine months ago.
The UNI token is trading at $8.64 and is up by 31% in the last 24 hours. The global market cap is at $5.44 billion and the 24-hour trading volume is up by a whopping 155%.
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Statement from stakeholders
“We believe this proposal positions the Uniswap Protocol to win as the default decentralised exchange for tokenised value,” the Uniswap Foundation said.
Hayden Adams, the CEO of Uniswap Protocol, said, “This proposal turns on protocol fees and aligns incentives across the Uniswap ecosystem. This restriction was in great part due to a hostile regulatory environment that cost thousands of hours and tens of millions in legal fees. Fortunately, the regulatory environment has shifted.”
Focus on protocol development
The Uniswap Foundation referred to UNIfication as the protocol’s “next era,” but it also stated that funding to promote decentralised finance builders and enhance protocol development and growth would remain a top focus.
To do this, it intends to develop a Growth Budget that would include the distribution of 20 million UNI tokens. A Uniswap Growth Budget is also included in the UNIfication proposal to support industry builders’ quarterly protocol and ecosystem expansion.
Mary-Catherine Lader, the president and chief operating officer of Uniswap Labs, formally announced her resignation earlier this July, after a significant four-year period of leadership.
Even though it’s still unclear exactly what portion of fees will go toward the UNI burn and incentives, with around $3 billion in yearly fees, Uniswap continues to be one of the top fee-generating protocols in DeFi.
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