The proposal shifts a portion of trading fees from liquidity providers to the protocol, which will be used to burn Uniswap’s native token UNI.
The Uniswap governance voted to pass the UNIfication proposal, a major initiative that fundamentally shifts the protocol’s economics to a more deflationary road.
On Thursday, Uniswap Founder Hayden Adams wrote on X that voting concluded with 99.9% support, with more than 125 million tokens cast in favor compared with just 742 against.
The proposal, jointly introduced by Uniswap Labs and the Uniswap Foundation in November, activates the long-anticipated protocol “fee switch.” This redirects a portion of trading fees — previously allocated entirely to liquidity providers — directly to the protocol, which will burn UNI tokens on an ongoing basis. Net sequencer fees from Unichain will also be routed into the same burn system.
This effectively creates a deflationary loop: as protocol usage grows, the UNI supply shrinks.
Additionally, the proposal consolidates operations by transitioning Uniswap Foundation teams and responsibilities to Uniswap Labs, removing fees from Labs’ interface, wallet, and API services, and establishing an annual growth budget funded by UNI to support protocol development and ecosystem expansion.
Following the passage, the proposal enters a two-day timelock after which the protocol will burn 100 million UNI, an estimate of what might have been burned if the protocol fee switch had been active at token launch.
Uniswap’s new model follows legal battles and regulatory scrutiny under Gary Gensler’s SEC. The protocol said in the proposal that the regulatory climate has changed, and DeFi reached an inflection point of becoming mainstream.
“I believe Uniswap protocol can be the primary place tokens are traded,” Adams wrote. “This proposal sets the stage for the next decade of its growth.”
UNI is trading at $5.92 as of 10:10 p.m. on Thursday, up 18.9% in the past week, according to The Block’s price page. Uniswap has generated over $1.05 billion in fees so far this year.
