Decentralized exchange Uniswap has unveiled a sweeping “UNIfication” proposal to activate protocol fees, initiate large-scale token burns, and consolidate its operational structure, aiming to bolster its market position and the value of its UNI token.
The core of the ambitious plan involves turning on protocol fees, with a portion of these revenues directed to a continuous token burning mechanism. This includes fees generated from Unichain, Uniswap’s Layer 2 solution.
A key element of the proposal is a retroactive burn of 100 million UNI tokens from the project’s treasury. This figure is presented as an equivalent to the fees that would have been collected and burned had the protocol fees been active since the token’s launch in 2020.
Additionally, the proposal earmarks 20 million UNI tokens for an annual growth budget, slated for quarterly distribution starting in 2026. These funds are intended to fuel further development and adoption of the protocol.
Under the “UNIfication” plan, Uniswap Labs will absorb the ecosystem teams currently under the Uniswap Foundation. This move aims to centralize development and strategy under a single operational entity.
A new five-member board of directors would oversee this unified structure. The board is proposed to include co-founders Hayden Adams, Devin Walsh, and Ken Ng, alongside Callil Capuozzo and Hart Lambur.
This restructuring represents the most significant evolution in Uniswap’s governance and economic model since the UNI token’s introduction in 2020, according to information reported by CoinDesk. The initiative, presented by Uniswap Labs and the Uniswap Foundation, seeks to align incentives across the ecosystem and concentrate growth efforts.
The monetization strategy will also shift, with Uniswap Labs proposing to eliminate fees for products such as its web interface, wallet, and API. This aims to drive organic volume, integrations, and high-quality activity that benefits liquidity providers and the broader ecosystem.
The proposal introduces Protocol Fee Discount Auctions (PFDA), allowing traders to bid for fee reductions. This mechanism is designed to internalize Maximal Extractable Value (MEV) and increase funds allocated for token burning.
Uniswap v4 is set to evolve into an on-chain aggregator, utilizing new “hooks” to collect fees from external liquidity sources, expanding its reach beyond traditional liquidity pools.
If approved by the decentralized autonomous organization (DAO) community, activating protocol fees and employing automatic burning mechanisms could lead to a reduction in the effective supply of UNI over time. The team suggests this would enhance Uniswap’s standing as a preferred exchange for tokenized assets.
The consolidation of teams could streamline decision-making. However, it may also ignite discussions regarding decentralization and control within the community.
The proposal’s blog post was briefly published on November 10 ahead of its official November 11 date, outlining the rationale behind the sweeping changes. The DAO community’s vote will be the next formal step in this process.