The landmark governance vote to activate protocol fees and burn UNI tokens has crossed quorum with near-unanimous support, marking a pivotal moment for DeFi governance.
Uniswap's most consequential governance vote in years is sailing toward approval, with 99% of participants backing a proposal that would fundamentally reshape how the protocol captures value.
The UNIfication proposal, a joint initiative from Uniswap Labs and the Uniswap Foundation, has crossed quorum with overwhelming support. More than 69 million UNI tokens have been cast in favor, with virtually no opposition recorded.
The vote, which runs through December 25 UTC, would activate Uniswap's long-dormant fee switch mechanism. For Uniswap v2, LP fees would shift from 0.3% to 0.25%, with the remaining 0.05% flowing to protocol fees. Uniswap v3 would see protocol fees set at one-quarter to one-sixth of LP fees, depending on pool tier.
Critically, all collected fees would funnel into a UNI burn mechanism. The proposal also includes a retroactive burn of 100 million UNI tokens from the treasury, representing what would have been burned had fees been active since launch.
This vote represents a fundamental shift in Uniswap's economic model. Had the burn mechanism been active, the protocol would have destroyed approximately $26 million worth of UNI over the past 30 days alone, and nearly $150 million year-to-date.
The proposal also restructures organizational responsibilities. Uniswap Labs would receive a $20 million annual UNI growth budget starting January 2026, while eliminating fees on its interface, wallet, and API services. Most Uniswap Foundation employees would transition to Labs.
For UNI holders, this creates direct value accrual through supply reduction rather than dividends, a structure that may have regulatory advantages while still rewarding long-term participants.
The vote closes December 25 UTC. If approved, implementation begins with v2 and select v3 pools representing 80-95% of Ethereum mainnet LP fees. Expansion to other chains and protocol versions would follow through subsequent governance votes. Watch for UNI price action as the market digests the implications of sustained token burns.
The UNIfication vote marks a watershed moment for DeFi governance. After years of debate about the fee switch, Uniswap appears poised to finally activate value capture for token holders. The situation remains fluid as voting continues.
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