Uniswap has permanently reduced its token supply after executing a 100 million UNI burn, valued at roughly $596 million, following near-unanimous approval of its UNIfication governance proposal.
The burn was carried out on December 28, 2025, after a two-day timelock, removing the tokens from treasury circulation for good.
The move marks one of the largest single token burns in DeFi history and signals a decisive shift in how UNI accrues value.
The UNIfication proposal passed with 99.9% support, implementing a package of tokenomic upgrades designed to align protocol usage with UNI supply dynamics.
The long-dormant protocol fee switch is now active on V2 and V3 pools on the Ethereum mainnet. For V2 pools, liquidity provider fees are adjusted from 0.30% to 0.25%, with the remaining 0.05% captured by the protocol. This enables Uniswap to earn revenue directly from trading activity for the first time at scale.
Captured protocol fees now flow into a “TokenJar” smart contract. Funds can only be accessed by burning an equivalent amount of UNI via a dedicated “Firepit” contract. The result is a continuous, activity-driven deflation — the more Uniswap is used, the more UNI is burned.
Uniswap Labs will also disable the 0.15% front-end interface fee introduced earlier. The change is intended to improve user experience and support higher volumes, reinforcing the protocol’s competitiveness while the back-end fee switch captures value for UNI holders.
The one-time burn slashes estimated circulating supply from roughly 630 million UNI to about 530 million UNI, creating an instant reduction while establishing a longer-term deflationary framework.
Key figures at a glance:
UNIfication transforms UNI from a token used primarily for governance into an asset with explicit value accrual tied to protocol economics. By coupling fee capture with mandatory burns, Uniswap directly links network scale, trading activity, and token scarcity.
For DeFi more broadly, the move sets a precedent: large, battle-tested protocols can evolve tokenomics to reward long-term holders without sacrificing competitiveness or user experience. In practical terms, Uniswap has aligned its growth with UNI’s supply mechanics, an inflection point for how decentralized protocols think about sustainable value creation.
