Uniswap Token Jumps 38% After Fee Switch, Burn Proposal Hits The Table

The Uniswap token rose over 38% after the introduction of a protocol fee switch and burning mechanism that could strengthen UNI.

The native token behind Uniswap rallied over 38% after the Uniswap Foundation and Uniswap Labs introduced a proposal aimed at making holding the token more appealing to investors.

Among the potential changes outlined in the “UNIfication” proposal are activating a protocol-level fee mechanism to burn Uniswap (UNI) tokens and building a Protocol Fee Discount Auctions system to increase liquidity provider returns, the Uniswap Foundation said in a joint proposal with Uniswap Labs on Monday.

They also plan to burn 100 million UNI — roughly 16% of the UNI’s circulating supply — from the treasury, which could further improve the supply and demand dynamics of UNI, the governance token behind the Uniswap decentralized exchange.

Fees on Uniswap’s Ethereum layer 2, Unichain — which has generated $7.5 million in annualized fees since its launch nine months ago — will also be sent to the same UNI burn mechanism.

“We believe this proposal positions the Uniswap Protocol to win as the default decentralized exchange for tokenized value,” the Uniswap Foundation said.

UNI surged by about 38.5% on the news to $9.70, providing the governance token with a much-needed boost after trailing the likes of Bitcoin (BTC) and BNB (BNB). Solana (SOL) and several other blue-chip tokens this cycle.

UNI’s market cap blew past $6 billion on the news and is now the 34th largest cryptocurrency.

Uniswap is by far the largest DEX, processing around $4 trillion in cumulative volume since it launched in November 2018.

While the Uniswap Foundation dubbed UNIfication as the protocol’s “next era,” issuing grants to improve protocol development and growth and support decentralized finance builders will continue to be a priority, it said.

Source: CoinTelegraph