Uniswap Unveils ‘UNIfication’ Proposal To Activate Fees, Burn UNI, And Drive Long-Term Ecosystem Growth
In Brief
Uniswap’s “UNIfication” proposal aims to activate protocol fees, implement programmatic UNI burns, and unify governance and operations to drive long-term growth, liquidity, and adoption across the ecosystem.
Hayden Adams, founder and CEO of Uniswap, the leading decentralized exchange (DEX) on Ethereum, introduced the “UNIfication” proposal, aimed at activating protocol fees and aligning incentives across the Uniswap ecosystem to solidify its position as the default platform for tokenized value.
Uniswap has facilitated roughly $4 trillion in trading volume, supported by millions of wallets, thousands of developers, and countless liquidity providers. Despite its growth, the protocol has faced regulatory challenges under the SEC, but recent governance milestones, including the adoption of DUNI and DUNA, have prepared the community for its next phase.
The proposal comes as decentralized finance (DeFi) reaches a turning point: decentralized protocols now rival centralized exchanges in scale and performance, token adoption is accelerating, and institutional participants are increasingly building on Uniswap.
“UNIfication” lays out a long-term operational model where protocol usage drives UNI burns, and Uniswap Labs focuses solely on protocol development and growth. Key elements include activating protocol fees to burn UNI, redirecting sequencer fees to the same burn mechanism, implementing Protocol Fee Discount Auctions to enhance LP returns and internalize MEV, launching aggregator hooks in Uniswap v4 to collect fees from external liquidity, and burning 100 million UNI from the treasury to reflect fees that would have accrued historically.
The plan also shifts ecosystem teams from the Foundation to Labs, migrates governance-owned Unisocks liquidity from v1 to v4 on Unichain with a permanent burn of the LP position, and ensures that Labs prioritizes initiatives aligned with DUNI interests while discontinuing interface, wallet, and API fees. The proposal represents a strategic evolution for Uniswap, combining long-term incentive alignment with sustainable growth and governance-driven protocol development.
‘UNIfication’ Proposal Sets Path For Protocol Fee Activation, UNI Burns, And Long-Term Ecosystem Growth
Uniswap’s “UNIfication” proposal outlines a comprehensive plan to activate the protocol fee switch, implement programmatic UNI burns, and unify governance and operations to drive long-term protocol growth. Fees would be phased in gradually, starting with Ethereum v2 and key v3 pools, before extending to L2s, v4, UniswapX, Protocol Fee Discount Auctions (PFDA), and aggregator hooks, with all collected fees directed to a burn mechanism. The PFDA is designed to capture MEV and increase liquidity provider returns, while v4 hooks transform Uniswap into a developer platform, aggregating external liquidity and contributing to UNI burns.
The proposal also recommends a retroactive burn of 100 million UNI to account for fees that would have accrued if the protocol fee switch had been active from the start. Fees are managed via immutable contracts, TokenJar and Firepit, ensuring that withdrawal occurs only through UNI burns. Labs will assist the community in monitoring and adjusting fees as needed, streamlining governance votes on parameters through Snapshot and onchain votes.
Operationally, Foundation teams will transition to Labs, centralizing ecosystem support, governance, and developer relations under a growth-focused budget funded from the treasury. Labs will eliminate interface, wallet, and API fees to maximize protocol usage while focusing on liquidity, adoption, integrations, and Unichain optimization. Additional initiatives include expanding Uniswap to new assets and Layer 1 or Layer 2 networks, deploying liquidity bootstrapping tools, supporting developers via APIs and SDKs, and establishing Unichain as a leading low-cost AMM hub.
Governance would establish a 20M UNI annual growth budget to fund protocol development, ensuring alignment between Labs and DUNI. Legacy Unisocks liquidity would migrate from v1 to v4 on Unichain and be permanently burned, locking the original price curve and completing the tokenized socks vision. This proposal unifies operations, aligns incentives, and positions Uniswap for sustained adoption and ecosystem growth.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
