Critics argue UNI delivers no value to holders despite the protocol’s market dominance.
UNI, the governance token of leading decentralized protocol Uniswap, has come under heat after Jeff Dorman, chief investment officer at digital investment firm Arca, criticized its utility, calling it “a complete nonsense token” without clear revenue-sharing or buyback mechanisms.
The drama unfolded on X after Hayden Adams, founder of Uniswap, celebrated record trading volumes on the decentralized exchange.
Dorman responded that while the protocol’s performance was impressive, UNI’s tokenomics offered little to holders under current market conditions and shifting regulations.
Uniswap is the world’s largest decentralized exchange by trading volume, and it has hit a new milestone, having already processed more than $270 billion in this third quarter and still counting, as there are a few more days to go before the end of the quarter.
Adams highlighted this milestone, writing, “Always funny to see people bear post Uniswap,” noting that the platform’s volumes had already exceeded $270 billion this quarter and were on track for more than $1 trillion annually for the first time. He added that the regulatory environment had “massively improved” and that there were “many exciting things on the horizon.”
Dorman shot back, stating that people are not bearish on the protocol itself but on the UNI token. He said, “We’re not bear posting Uniswap. We’re bear posting $UNI. Just a complete nonsense token in today’s market & changing regulatory environment. Everything you and your VCs stand for is irrelevant. Turn on revenues & buybacks, or don’t bother having a token.”
The regulatory landscape has truly been progressive and welcoming to the crypto industry since President Trump resumed office. The GENIUS Act has been passed, with other regulations still in consideration.
Hyperliquid also appears to be a beneficiary of the new regulatory environment as Cryptopolitan reported. However, Uniswap hasn’t made any change to its token’s revenue model.
In August, Uniswap faced sharp criticism as many in the ecosystem voiced their concerns about the token, UNI, with an X user calling it a “worthless token,” adding that Uniswap hasn’t been able to drive meaningful revenue back to token holders.
However, Bitwise CIO Matt Hougan pointed out that with “Project Crypto,” things could change.
Many in the comments section of Dorman and Adams’ posts on X appeared to voice the same concern. Dorman’s comments also make it apparent that both large investors and everyday users are aware of some of the deficiencies in the UNI token.
Over the years, Uniswap has so far resisted calls to introduce revenue-sharing, citing regulatory risk and the need to prioritize decentralization. Adams and the Uniswap Foundation have instead promoted the protocol’s scale, developer community, and regulatory engagement as sources of long-term value.
However, pressure is building, and more rivals are entering the market and claiming part of Uniswap’s market. Austin Barack, founder and managing partner at Relayer Capital, a crypto investment fund, wrote on X, “People are thinking way too small [about] how big DEXs can be because the market leader for much of their history (Uniswap) has delivered zero value to token holders and kneecapped valuations for the whole vertical in the process.”
He continued, “Just like how perp DEXs only re-rated when Hyperliquid came around and showed how big the opportunity is, spot DEXs need the same thing. Aerodrome will do for spot DEX valuations what Hyperliquid did for perp DEXs.”
Aside from Aerodrome, where revenue goes to its token holders, more protocols are coming up with the same model.
However, whether the UNI token governance model will change looks to be seen, as Adams hasn’t replied to the criticisms or hinted at any such adjustment.
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