Uniswap recommends sweeping ‘unification’ with uni burn overhaul and protocol fee overhaul
Uniswap Labs and Uniswap Foundation, two of the main companies that help steer the UNISWAP protocol, have joined forces to propose a new governance proposal that will completely change the way the ecosystem works today.
The proposal, called “Unification,” aims to align incentives across the uniswap ecosystem and position the protocol as the default exchange for tokenized assets. This will be done by activating protocol fees, burning millions of UNI tokens and bringing together key project teams under a growth strategy, according to a The blog post dated November 11 but briefly published on November 10.
Under the proposal, which will be voted on by DAO members, the protocol will redirect a portion of trading fees to a uni burning mechanism and fees from Layer-2 of Uniswap The network, unichain, also flows through the burn.
Other features such as Protocol Fee Discount Auctions (PFDA) will allow traders to bid for fee discounts, internalizing MEV (maximum earned value) and further fueling the combustion process, the team claims. In addition, UNISWAP V4 will transform into an integrated onchain, collecting fees from external sources of liquidity through new “hooks.”
Uniswap Labs also proposed a retroactive burn of 100 million uni from the Treasury, which the team claims is equivalent to the amount that could have been burned if the protocol fees had been active since launch.
The changes associated with UNISWAP’s tokenomics are not the only restructuring happening in the ecosystem. UNISWAP Labs, which is the main developer company supporting the UNISWAP protocol, is absorbing the ecosystem teams of the UNISWAP Foundation. Co-founders Hayden Adams, Devin Walsh and Ken Ng, along with Callil Capuozzo and Hart Lambur, will sit on a five-member board overseeing the new structure, the proposal said.
Uniswap Labs will also be cautious about 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 all future monetization tied directly to the interests of uni holders.
“These products drive significant organic volume for the protocol. Removing fees makes it more competitive and brings higher quality volume and integration, leading to better outcomes for LPS and the entire uniswap ecosystem,” the teams wrote in their press release.
Moreover, the team proposes that the management of UNISWAP creates an annual growth budget of 20 million UNI, starting in 2026, distributed quarterly.
If passed, the unification would mark the most significant evolution of UNISWAP’s governance and economics since its token launch in 2020.
Read more: Uniswap Labs Officially Launches Layer-2 ‘Unichain’
