Governance has opened voting on a proposal called “UNIfication”, and it’s set to link the value of the UNI token directly to Uniswap’s multibillion-dollar trading engine. Think of it as finally turning on the faucet that connects protocol activity to token economics.
Here’s what’s happening:
- Protocol Fees Turn On
For the first time ever, Uniswap plans to collect a portion of swap fees from selected v2 and v3 pools. Those pools generated over $700 million in trading volume last year. The collected fees won’t just sit idle—they’ll feed a permanent UNI burn mechanism, tying token supply to real usage. - Immediate Token Burn
If approved, the proposal calls for a retroactive burn of 100 million UNI from the treasury—worth more than $500 million today. That drops the circulating supply from 629 million to 529 million UNI, giving the token a built-in scarcity boost. - Fee Splits for Liquidity Providers
Uniswap v2 pools would allocate 0.25% to liquidity providers (LPs) and 0.05% to the protocol. V3 pools will be more flexible, with fees ranging from one-sixth to one-quarter of LP fees, depending on the pool tier. For context, LPs are the users supplying tokens to the pools and earning fees in return. - Expanded Revenue Streams
Beyond swap fees, all revenue from the Unichain sequencer, minus Optimism’s share and data costs, will also feed into the UNI burn. This moves Uniswap closer to a full protocol-level revenue model, not just Ethereum mainnet trading. - Operational Consolidation
The proposal shifts operational control from the Uniswap Foundation to Uniswap Labs, centralizing protocol development, ecosystem support, and governance coordination. In return, Labs promises zero fees on its interface, wallet, and API products while focusing solely on protocol growth. - Funding Growth
Governance would approve a 20 million UNI annual growth budget, starting in 2026, to fund Labs’ efforts—distributed quarterly via vesting under a DAO services agreement. - Future Upgrades
The plan also hints at next steps: ways to capture value from trading bots, routing trades beyond Uniswap pools, and increasing returns for liquidity providers.
Voting opens December 20, 2025, at 9:03 a.m. UTC and closes December 25 at 11:27 p.m. UTC.
The bottom line: if passed, UNIfication would transform UNI from a governance token into a revenue-linked asset, directly tying its value to protocol activity and fees. For the first time, Uniswap users and investors would see token economics powered by real trading performance, not just speculation.
This isn’t just an upgrade—it’s a redefinition of what UNI represents in the crypto economy.
