This is the first proposal to use the new governance process approved in UNIfication. The new process only applies to fee parameter updates, where proposals can bypass the RFC stage and go directly to a five-day Snapshot followed by an onchain vote. This allows for faster updates to protocol fees, while retaining the security of onchain governance.
Since UNIfication went live in late December we have been monitoring protocol fees, which were rolled out gradually to ensure protocol health. This started with v2 and select v3 pools on Ethereum mainnet. This rollout has gone well, with market-adjusted TVL up on Ethereum mainnet since December. The burn system is working as expected, permissionlessly converting fees in many different tokens into UNI burns.
Now, we propose to:
Expand protocol fees on v2 and v3 to Arbitrum, Base, Celo, OP Mainnet, Soneium, X Layer, Worldchain, and Zora
Enable protocol fees on all v3 pools via a new tier-based v3OpenFeeAdapter on mainnet and the above L2s
Expand protocol fees to L2s and burn UNI on mainnet
This proposal introduces v2 and v3 protocol fees on eight chains. Fees on each chain will be routed to the TokenJar on that respective chain.
UNI burned on L2s doesn't stay on L2s - it is bridged back to mainnet and sent to 0xdead. This uses the same infrastructure used for burning Unichain sequencer fees (OptimismBridgedResourceFirepit for OP Stack chains, and ArbitrumBridgedResourceFirepit for Arbitrum).
Enable fees on all v3 pools
The current v3FeeAdapter manages protocol fees pool by pool and governance maintains a list of individual pools and their fee levels. Today, those pools account for a significant majority of v3 volume on Ethereum mainnet.
v3OpenFeeAdapter replaces this with a tier-based system. Protocol fees are set uniformly across all pools sharing the same LP fee tier. For example, all 1bps LP fee pools could have protocol fees set to 25%. Any pool automatically gets the default protocol fee for its tier, no governance action is needed. This means if this proposal passes, protocol fees will be active on every v3 pool. Governance retains the ability to override fees on individual pools.
Pre-proposal - complete before onchain vote:
/// For each L2:
/// Deploy the TokenJar
TokenJar tokenJar = new TokenJar{salt: SALT_TOKEN_JAR}();
/// Deploy the chain-specific Releaser
/// OP Stack (Optimism, Base, Zora, Worldchain, etc.):
OptimismBridgedResourceFirepit releaser = new OptimismBridgedResourceFirepit{salt: SALT_RELEASER}(RESOURCE, THRESHOLD, address(tokenJar));
/// Arbitrum:
ArbitrumBridgedResourceFirepit releaser = new ArbitrumBridgedResourceFirepit{salt: SALT_RELEASER}(RESOURCE, L1_RESOURCE, THRESHOLD, address(tokenJar));
/// Set the releaser on the TokenJar (must be before ownership transfer)
tokenJar.setReleaser(address(releaser));
/// Set the thresholdSetter on the Releaser (must be before ownership transfer)
releaser.setThresholdSetter(TIMELOCK_ALIAS);
/// Transfer ownership of the TokenJar and Releaser to governance
tokenJar.transferOwnership(TIMELOCK_ALIAS);
releaser.transferOwnership(TIMELOCK_ALIAS);
/// For each L2 and Mainnet:
/// Deploy the V3OpenFeeAdapter
V3OpenFeeAdapter v3OpenFeeAdapter = new V3OpenFeeAdapter{salt: SALT_FEE_ADAPTER}(address(V3_FACTORY), address(tokenJar));
/// Set the feeSetter (must be before ownership transfer)
v3OpenFeeAdapter.setFeeSetter(TIMELOCK_ALIAS); // L2
v3OpenFeeAdapter.setFeeSetter(TIMELOCK); // Mainnet
/// Transfer ownership to governance
v3OpenFeeAdapter.transferOwnership(TIMELOCK_ALIAS); // L2
v3OpenFeeAdapter.transferOwnership(TIMELOCK); // Mainnet
/// For Mainnet only:
/// Deploy the Firepit (mainnet-only releaser, burns directly)
Firepit releaser = new Firepit{salt: SALT_RELEASER}(RESOURCE, THRESHOLD, address(tokenJar));
/// Set the releaser on the TokenJar (must be before ownership transfer)
tokenJar.setReleaser(address(releaser));
/// Set the thresholdSetter on the Releaser (must be before ownership transfer)
releaser.setThresholdSetter(TIMELOCK);
/// Transfer ownership of the TokenJar and Releaser to governance
tokenJar.transferOwnership(TIMELOCK);
releaser.transferOwnership(TIMELOCK);
In this proposal, if passed:
/// For each L2:
/// Set the owner of the V3 Factory to the V3OpenFeeAdapter
V3_FACTORY.setOwner(address(v3OpenFeeAdapter));
/// Set the recipient of V2 protocol fees to the TokenJar
V2_FACTORY.setFeeTo(address(tokenJar));
/// For Mainnet:
/// Transfer V3 Factory ownership through the V3OpenFeeAdapter
v3OpenFeeAdapter.setFactoryOwner(address(v3OpenFeeAdapter));
Please note that because of GovernorBravo’s limit of 10 actions per proposal, there will be two separate onchain votes posted in parallel. One proposal will include the change to mainnet’s fee controller and turn on fees on Base, OP Mainnet, and Arbitrum, the other will turn on fees on Celo, Soneium, Worldchain, X Layer, and Zora.
This is the first proposal to use the new governance process approved in UNIfication. The new process only applies to fee parameter updates, where proposals can bypass the RFC stage and go directly to a five-day Snapshot followed by an onchain vote. This allows for faster updates to protocol fees, while retaining the security of onchain governance.
Since UNIfication went live in late December we have been monitoring protocol fees, which were rolled out gradually to ensure protocol health. This started with v2 and select v3 pools on Ethereum mainnet. This rollout has gone well, with market-adjusted TVL up on Ethereum mainnet since December. The burn system is working as expected, permissionlessly converting fees in many different tokens into UNI burns.
Now, we propose to:
Expand protocol fees on v2 and v3 to Arbitrum, Base, Celo, OP Mainnet, Soneium, X Layer, Worldchain, and Zora
Enable protocol fees on all v3 pools via a new tier-based v3OpenFeeAdapter on mainnet and the above L2s
Expand protocol fees to L2s and burn UNI on mainnet
This proposal introduces v2 and v3 protocol fees on eight chains. Fees on each chain will be routed to the TokenJar on that respective chain.
UNI burned on L2s doesn't stay on L2s - it is bridged back to mainnet and sent to 0xdead. This uses the same infrastructure used for burning Unichain sequencer fees (OptimismBridgedResourceFirepit for OP Stack chains, and ArbitrumBridgedResourceFirepit for Arbitrum).
Enable fees on all v3 pools
The current v3FeeAdapter manages protocol fees pool by pool and governance maintains a list of individual pools and their fee levels. Today, those pools account for a significant majority of v3 volume on Ethereum mainnet.
v3OpenFeeAdapter replaces this with a tier-based system. Protocol fees are set uniformly across all pools sharing the same LP fee tier. For example, all 1bps LP fee pools could have protocol fees set to 25%. Any pool automatically gets the default protocol fee for its tier, no governance action is needed. This means if this proposal passes, protocol fees will be active on every v3 pool. Governance retains the ability to override fees on individual pools.
Pre-proposal - complete before onchain vote:
/// For each L2:
/// Deploy the TokenJar
TokenJar tokenJar = new TokenJar{salt: SALT_TOKEN_JAR}();
/// Deploy the chain-specific Releaser
/// OP Stack (Optimism, Base, Zora, Worldchain, etc.):
OptimismBridgedResourceFirepit releaser = new OptimismBridgedResourceFirepit{salt: SALT_RELEASER}(RESOURCE, THRESHOLD, address(tokenJar));
/// Arbitrum:
ArbitrumBridgedResourceFirepit releaser = new ArbitrumBridgedResourceFirepit{salt: SALT_RELEASER}(RESOURCE, L1_RESOURCE, THRESHOLD, address(tokenJar));
/// Set the releaser on the TokenJar (must be before ownership transfer)
tokenJar.setReleaser(address(releaser));
/// Set the thresholdSetter on the Releaser (must be before ownership transfer)
releaser.setThresholdSetter(TIMELOCK_ALIAS);
/// Transfer ownership of the TokenJar and Releaser to governance
tokenJar.transferOwnership(TIMELOCK_ALIAS);
releaser.transferOwnership(TIMELOCK_ALIAS);
/// For each L2 and Mainnet:
/// Deploy the V3OpenFeeAdapter
V3OpenFeeAdapter v3OpenFeeAdapter = new V3OpenFeeAdapter{salt: SALT_FEE_ADAPTER}(address(V3_FACTORY), address(tokenJar));
/// Set the feeSetter (must be before ownership transfer)
v3OpenFeeAdapter.setFeeSetter(TIMELOCK_ALIAS); // L2
v3OpenFeeAdapter.setFeeSetter(TIMELOCK); // Mainnet
/// Transfer ownership to governance
v3OpenFeeAdapter.transferOwnership(TIMELOCK_ALIAS); // L2
v3OpenFeeAdapter.transferOwnership(TIMELOCK); // Mainnet
/// For Mainnet only:
/// Deploy the Firepit (mainnet-only releaser, burns directly)
Firepit releaser = new Firepit{salt: SALT_RELEASER}(RESOURCE, THRESHOLD, address(tokenJar));
/// Set the releaser on the TokenJar (must be before ownership transfer)
tokenJar.setReleaser(address(releaser));
/// Set the thresholdSetter on the Releaser (must be before ownership transfer)
releaser.setThresholdSetter(TIMELOCK);
/// Transfer ownership of the TokenJar and Releaser to governance
tokenJar.transferOwnership(TIMELOCK);
releaser.transferOwnership(TIMELOCK);
In this proposal, if passed:
/// For each L2:
/// Set the owner of the V3 Factory to the V3OpenFeeAdapter
V3_FACTORY.setOwner(address(v3OpenFeeAdapter));
/// Set the recipient of V2 protocol fees to the TokenJar
V2_FACTORY.setFeeTo(address(tokenJar));
/// For Mainnet:
/// Transfer V3 Factory ownership through the V3OpenFeeAdapter
v3OpenFeeAdapter.setFactoryOwner(address(v3OpenFeeAdapter));
Please note that because of GovernorBravo’s limit of 10 actions per proposal, there will be two separate onchain votes posted in parallel. One proposal will include the change to mainnet’s fee controller and turn on fees on Base, OP Mainnet, and Arbitrum, the other will turn on fees on Celo, Soneium, Worldchain, X Layer, and Zora.
https://gov.uniswap.org/t/temp-check-protocol-fee-expansion-eight-more-chains-and-remaining-mainnet-v3-pools/26035/2
https://gov.uniswap.org/t/axia-network-delegate-platform/26036?u=axia
https://gov.uniswap.org/t/temp-check-protocol-fee-expansion-eight-more-chains-and-remaining-mainnet-v3-pools/26035/2
https://gov.uniswap.org/t/axia-network-delegate-platform/26036?u=axia
https://gov.uniswap.org/t/unification-proposal/25881/55
https://x.com/guil_lambert/status/1992966625402720659
https://gov.uniswap.org/t/404-dao-delegate-platform/22285/36?u=404dao
Great job. This is how it should have been since day one. Sincerely excited about the Uniswap future!
https://gov.uniswap.org/t/unification-proposal/25881/55
https://x.com/guil_lambert/status/1992966625402720659
https://gov.uniswap.org/t/404-dao-delegate-platform/22285/36?u=404dao
Great job. This is how it should have been since day one. Sincerely excited about the Uniswap future!
Calldata executes the expected outcome, with some informational findings.
The simulation and tests of the live proposal can be found here.
To verify locally, clone the repository, check out commit 5c4ccc9, and run:
forge test --match-path "src/uniswap/proposals/93 - UNIfication/*" -vv
The proposal approves 40M UNI to the UNIVesting contract at 20M UNI/year, distributed quarterly. On January 1st, 2026, Uniswap Labs can immediately claim 5M UNI. If no more approvals are passed, the last tranche is in Oct 2027.
This can be checked on line 334.
While the DAO (which in the contract is Party A) will sign the Agreements once the proposal gets executed, as verified in our tests, other parties have not signed yet.
| Agreement | Party B |
|---|---|
| Uniswap Labs Services Agreement | ❌ Uniswap Labs has not signed |
| Hart Lambur Indemnification | ✅ Signed (using hal2001.eth, great for transparency) |
| DAO Jones LLC Indemnification | ❌ Ben Jones has not signed (and it's a fresh wallet with no tx) |
Verified on block 24064480
The proposal references "Ben Jones" but the on-chain AgreementAnchor is with "DAO Jones LLC".
Initial burn threshold set to 4,000 UNI.
Retail always loses to “pros.” That would still be happening even outside of this proposal. What’s the solution? Open question to anyone here. What can be done so that the playing field is level?
Hello!
Firstly wanted to say I’m glad this proposal is happening and it’s definitely a step in the right direction.
Hello!
Firstly wanted to say I’m glad this proposal is happening and it’s definitely a step in the right direction.
I was a bit confused by one of the implementation details though. Why are we burning 100M of UNI tokens from the DAO treasury, which the DAO controls anyways? If the goal is complete alignment, shouldn’t we first at least burn the amount that Uniswap Labs collected in frontend fees over the last few years? Paid by labs. That seems cleaner to reverse SEC’s shenanigans.
Thanks!
If Uniswap goes this route, we need to put serious thought into what happens if the token price goes up or down. Token prices can see large movements for reasons beyond the control of the DAO. Service providers are paying their bills in fiat, so if the token price drops 2/3rds they can run into issues. Meanwhile, if the token 3xes then token holders may feel they are overpaying. I have seen both scenarios play out at other DAOs.
It would be beneficial to establish up front how these large swings will be handled, either throughout the year or during yearly reevaluations..
I strongly support the direction of this proposal. Turning on protocol fees and creating a model where UNI accrues value directly from protocol usage is a long-overdue step for Uniswap.
I particularly appreciate the decision by Uniswap Labs to eliminate interface, wallet, and API fees and instead align its success purely with the success of the protocol itself. This creates a much clearer incentive structure where all stakeholders.. LPs, builders, users, and UNI holders benefit from increased usage and growth.
I strongly support the direction of this proposal. Turning on protocol fees and creating a model where UNI accrues value directly from protocol usage is a long-overdue step for Uniswap.
I particularly appreciate the decision by Uniswap Labs to eliminate interface, wallet, and API fees and instead align its success purely with the success of the protocol itself. This creates a much clearer incentive structure where all stakeholders.. LPs, builders, users, and UNI holders benefit from increased usage and growth.
That said, there are trade-offs and potential risks in any major structural change of this magnitude, and those downsides should not be ignored. However, when weighed against the long-term benefits of sustainable value capture, stronger alignment, and a clearer economic role for UNI, the advantages of this proposal clearly outweigh its disadvantages.
At this stage in Uniswap’s evolution, a decisive shift like this is necessary. I believe this proposal represents the right step forward for the protocol and the ecosystem as a whole.
Hello, I think a uni trading reward pool should also be added. New pools can be created through LPS, and uni can be rewarded based on the trading volume reached by the pool. Users who participate in trading can also receive additional dividends. This pool will be dug up over a period of 5 to 10 years (with a halving cycle set). The specific and reasonable rewards are determined by economists' prediction of the annual trading volume growth rate of uni and a combined analysis of the uni token price
I believe this initiative is especially important for our sector because it represents the core values that DeFi was built on. Choosing this path sends a powerful message: there is another way to create value for society—one rooted in a shared objective and in genuine collaboration around a token. It confirms that value creation doesn’t have to be extracted by a few, but can be distributed across the entire Uniswap ecosystem: LPs, builders, users, and token holders.
To me, that’s the real promise here. Not just better incentives or better mechanics, but a proof point that coordination at scale is possible, and that we can align for the long term while sharing the upside fairly. Steps like these help build a more just system—one that is stronger precisely because it is shaped by the sum of all of us.
This question probably boils down to whether the protocol belongs to the UNI holders or the LPs, basically an analogy to whether a company belongs to its equity holders or its customers, which I believe the answer is clear.
LPs will always try to maximize their profit, but without token and revenue alignment, UNI basically moves toward 0, which result in 0 funding for future development.
This question probably boils down to whether the protocol belongs to the UNI holders or the LPs, basically an analogy to whether a company belongs to its equity holders or its customers, which I believe the answer is clear.
LPs will always try to maximize their profit, but without token and revenue alignment, UNI basically moves toward 0, which result in 0 funding for future development.
There already are such cases for other protocols that delays alignment and eventually get surpassed by other protocols, which does not seem positive for long-term interest of the protocol.
Calldata executes the expected outcome, with some informational findings.
The simulation and tests of the live proposal can be found here.
To verify locally, clone the repository, check out commit 5c4ccc9, and run:
forge test --match-path "src/uniswap/proposals/93 - UNIfication/*" -vv
The proposal approves 40M UNI to the UNIVesting contract at 20M UNI/year, distributed quarterly. On January 1st, 2026, Uniswap Labs can immediately claim 5M UNI. If no more approvals are passed, the last tranche is in Oct 2027.
This can be checked on line 334.
While the DAO (which in the contract is Party A) will sign the Agreements once the proposal gets executed, as verified in our tests, other parties have not signed yet.
| Agreement | Party B |
|---|---|
| Uniswap Labs Services Agreement | ❌ Uniswap Labs has not signed |
| Hart Lambur Indemnification | ✅ Signed (using hal2001.eth, great for transparency) |
| DAO Jones LLC Indemnification | ❌ Ben Jones has not signed (and it's a fresh wallet with no tx) |
Verified on block 24064480
The proposal references "Ben Jones" but the on-chain AgreementAnchor is with "DAO Jones LLC".
Initial burn threshold set to 4,000 UNI.
Retail always loses to “pros.” That would still be happening even outside of this proposal. What’s the solution? Open question to anyone here. What can be done so that the playing field is level?
Hello!
Firstly wanted to say I’m glad this proposal is happening and it’s definitely a step in the right direction.
Hello!
Firstly wanted to say I’m glad this proposal is happening and it’s definitely a step in the right direction.
I was a bit confused by one of the implementation details though. Why are we burning 100M of UNI tokens from the DAO treasury, which the DAO controls anyways? If the goal is complete alignment, shouldn’t we first at least burn the amount that Uniswap Labs collected in frontend fees over the last few years? Paid by labs. That seems cleaner to reverse SEC’s shenanigans.
Thanks!
If Uniswap goes this route, we need to put serious thought into what happens if the token price goes up or down. Token prices can see large movements for reasons beyond the control of the DAO. Service providers are paying their bills in fiat, so if the token price drops 2/3rds they can run into issues. Meanwhile, if the token 3xes then token holders may feel they are overpaying. I have seen both scenarios play out at other DAOs.
It would be beneficial to establish up front how these large swings will be handled, either throughout the year or during yearly reevaluations..
I strongly support the direction of this proposal. Turning on protocol fees and creating a model where UNI accrues value directly from protocol usage is a long-overdue step for Uniswap.
I particularly appreciate the decision by Uniswap Labs to eliminate interface, wallet, and API fees and instead align its success purely with the success of the protocol itself. This creates a much clearer incentive structure where all stakeholders.. LPs, builders, users, and UNI holders benefit from increased usage and growth.
I strongly support the direction of this proposal. Turning on protocol fees and creating a model where UNI accrues value directly from protocol usage is a long-overdue step for Uniswap.
I particularly appreciate the decision by Uniswap Labs to eliminate interface, wallet, and API fees and instead align its success purely with the success of the protocol itself. This creates a much clearer incentive structure where all stakeholders.. LPs, builders, users, and UNI holders benefit from increased usage and growth.
That said, there are trade-offs and potential risks in any major structural change of this magnitude, and those downsides should not be ignored. However, when weighed against the long-term benefits of sustainable value capture, stronger alignment, and a clearer economic role for UNI, the advantages of this proposal clearly outweigh its disadvantages.
At this stage in Uniswap’s evolution, a decisive shift like this is necessary. I believe this proposal represents the right step forward for the protocol and the ecosystem as a whole.
Hello, I think a uni trading reward pool should also be added. New pools can be created through LPS, and uni can be rewarded based on the trading volume reached by the pool. Users who participate in trading can also receive additional dividends. This pool will be dug up over a period of 5 to 10 years (with a halving cycle set). The specific and reasonable rewards are determined by economists' prediction of the annual trading volume growth rate of uni and a combined analysis of the uni token price
I believe this initiative is especially important for our sector because it represents the core values that DeFi was built on. Choosing this path sends a powerful message: there is another way to create value for society—one rooted in a shared objective and in genuine collaboration around a token. It confirms that value creation doesn’t have to be extracted by a few, but can be distributed across the entire Uniswap ecosystem: LPs, builders, users, and token holders.
To me, that’s the real promise here. Not just better incentives or better mechanics, but a proof point that coordination at scale is possible, and that we can align for the long term while sharing the upside fairly. Steps like these help build a more just system—one that is stronger precisely because it is shaped by the sum of all of us.
This question probably boils down to whether the protocol belongs to the UNI holders or the LPs, basically an analogy to whether a company belongs to its equity holders or its customers, which I believe the answer is clear.
LPs will always try to maximize their profit, but without token and revenue alignment, UNI basically moves toward 0, which result in 0 funding for future development.
This question probably boils down to whether the protocol belongs to the UNI holders or the LPs, basically an analogy to whether a company belongs to its equity holders or its customers, which I believe the answer is clear.
LPs will always try to maximize their profit, but without token and revenue alignment, UNI basically moves toward 0, which result in 0 funding for future development.
There already are such cases for other protocols that delays alignment and eventually get surpassed by other protocols, which does not seem positive for long-term interest of the protocol.
Wanted to come back to this proposal because of the value this brings to token holders.
Wanted to bring up the idea of Staking $UNI tokens or having a pool strictly for this. Now I do not know how this would work or have the captivities to figure it out. But would definitely be an added plus to what uniswap has been doing and increase token value!
Isn’t the UNI converted to USD to fund operations and initiatives? Given this is price dependent what happens to excess UNI once the budget is met?
Wouldn’t a more aligned incentive system be funding the budget dollar for dollar, maybe add in a x% buffer and then have a retroactive reward system based off value added from projects?
I’ve taken time to go through this proposal, and I appreciate how it tries to pull the whole ecosystem into one clear direction. Turning on protocol fees has been a long conversation in this community, and seeing a concrete path that ties those fees directly to UNI burn makes the model easier to understand. It gives people a simple link between protocol usage and token value, which is something many of us have been asking for over the years.
What stands out to me is the gradual rollout. I’ve watched fee discussions split the community before, so starting with the pools that carry most of the volume feels like a calm way to introduce the change without putting LPs under sudden pressure. I like that Labs plans to monitor the impact and suggest adjustments. I’ve seen proposals pass in other DAOs where parameters were set once and then ignored, and it always creates problems later. Having active oversight here matters.
I’ve taken time to go through this proposal, and I appreciate how it tries to pull the whole ecosystem into one clear direction. Turning on protocol fees has been a long conversation in this community, and seeing a concrete path that ties those fees directly to UNI burn makes the model easier to understand. It gives people a simple link between protocol usage and token value, which is something many of us have been asking for over the years.
What stands out to me is the gradual rollout. I’ve watched fee discussions split the community before, so starting with the pools that carry most of the volume feels like a calm way to introduce the change without putting LPs under sudden pressure. I like that Labs plans to monitor the impact and suggest adjustments. I’ve seen proposals pass in other DAOs where parameters were set once and then ignored, and it always creates problems later. Having active oversight here matters.
The PFDA idea caught my attention because MEV has always felt like this invisible leak in the system. If there’s a way to bring part of that value back to LPs and still support the burn, then it’s worth testing. I’d like to see real data once this goes live because MEV mechanics often behave differently in practice, but I’m open to the experiment.
I also think sending Unichain sequencer fees to the burn aligns the chain’s growth with UNI in a way that hasn’t existed before. Since Unichain is still young, setting this direction early helps avoid the usual confusion that comes when a new chain grows without a clear economic link to its parent ecosystem.
The part about moving Foundation teams to Labs is a big shift. I understand the logic behind having one unified direction, though I hope the transition doesn’t weaken the neutral governance support the Foundation has been offering. If this passes, I’d like to see regular updates on how responsibilities are being handled so the community doesn’t feel left in the dark.
Finally, the retroactive burn is a strong symbolic gesture. People have argued for years that UNI missed out on early fee capture, and while we can’t rewrite history, this at least acknowledges that conversation.
Overall, this is a major step, and I’m leaning positive. The proposal ties protocol growth, token value, and ecosystem incentives together in a way that feels more coherent than what we’ve had. I’d still like to see clarity on how Labs plans to communicate changes over time because coordination will matter more than ever once everything is under one roof. But directionally, this feels like the kind of push the protocol needs at this stage.
I support the proposal but share the same concerns as others regarding the v2 LP fee cut to 0.25% and directing 100% of fees to burns, while creating a strong deflationary narrative, could starve the DAO of a sustainable, non-inflationary budget for its own operations and grants.
Your proposal is sound except that it reduces incentive, increases risk for LPs. LP fees are already too low. Studies show half of LPs lose money….heavily leaning towards retail investors. v4 is nice but makes things more complex for retail investors. Is this how it’s going to stay? Pros make money and other LPs support the ecosystem by taking losses?
We are voting FOR this proposal.
The rationale for supporting the proposal’s implementation is that it represents a long-awaited step by the DAO/community to enable $UNI to capture value from the protocol developed by Uniswap.
We are voting FOR this proposal.
The rationale for supporting the proposal’s implementation is that it represents a long-awaited step by the DAO/community to enable $UNI to capture value from the protocol developed by Uniswap.
However, historically, buyback programs do not always generate value for a token. There are recent successful cases in the industry, such as $PUMP and $HYPE, but there are also protocols that have allocated millions to buybacks and still failed to achieve meaningful token performance.
We recommend that this buyback program be accompanied by recurring reports from Uniswap Labs or the DAO itself, so that we can measure the impact relative to the fees allocated to this initiative.
Another point that requires attention - already raised by SeedGov and Tane - is the possibility of liquidity providers migrating to other DEXs. Since the fee percentage will be reduced from 0.30% to 0.25%, it is important to track capital movement after the fee switch, if enacted. If the fee switch reduces Uniswap’s competitiveness in the DEX market, it should be reconsidered. We are counting on the success of PFDA (Protocol Fee Discount Auctions) to keep Uniswap’s liquidity provisioning competitive.
Lastly, the 20M $UNI budget requested for Growth could be postponed to a separate request/proposal. Since the Foundation will be wound down and everything will become centralized under Labs—and given that the Foundation had already approved a budget covering growth and development—its remaining resources could be transferred to Labs to fund this objective.
More takes here.
Thank you to the Uniswap team for empowering the UNI token — this is a major and meaningful change. By aligning the team’s incentives with the UNI token’s value, and continuously iterating on products while capturing more on-chain trading volume, Uniswap is building a strong moat around its ecosystem. Looking forward to the official vote going live!
Not necessarily true. If the UNI appreciates that labs entity can get appraisal on that value. The other side is while technically Labs might needs to sell UNI at some point to fund certain operations as long as it sells a smaller percentage of it’s holding than token reduction then it’s stake in the protocol remains the same.
For example, in a given year labs sells 2% of it’s holdings and fees burn 2% of the supply, then it’s percentage stake in the protocol effectively remains the same. This would be creating a synthetic dividend
What made you decide to burn the UNI token instead of releasing fees to people who have voted/participants in UNI governance as previously discussed?
Great to see that Uniswap Foundation and Labs are merging to fully focus on UNI and the protocols adoption. Defi is becoming more competitive and it is way too early to focus on monetization over winning market share and distribution.
We at Arrakis support this proposal and think rolling it out to Uni v2 and v3 first is a good move. Migration to Uni v4 has been too slow, even though that we have worked hard on making it seamless and 1-click for our users managing their Uniswap liquidity on Arrakis Pro.
Great to see that Uniswap Foundation and Labs are merging to fully focus on UNI and the protocols adoption. Defi is becoming more competitive and it is way too early to focus on monetization over winning market share and distribution.
We at Arrakis support this proposal and think rolling it out to Uni v2 and v3 first is a good move. Migration to Uni v4 has been too slow, even though that we have worked hard on making it seamless and 1-click for our users managing their Uniswap liquidity on Arrakis Pro.
As someone representing Liquidity Providers using Uniswap, it would be great to have more discussions around finding a sweet spot of protocol fees vs LP fees in the future, since this will be an important topic to be figured out, especially in a world of a more competitive DEX landscape.
With the projected reduction of LP fees from 0.3% to 0.25%, isn’t there a risk that liquidity providers might move their funds to other DEXs offering more attractive conditions?
This argument holds back uni token holder and the protocol’s revenue alignment issue for too long.
In the long run, it is impossible to have revenue growth and uni token value alignment separated.
I waited for this to happen for more than 4 years!
Uniswap changed 4 major versions meanwhile: a tremendous, colossal amount of work by team, which I’d like to thank for! :smiling_face_with_three_hearts:
Wanted to come back to this proposal because of the value this brings to token holders.
Wanted to bring up the idea of Staking $UNI tokens or having a pool strictly for this. Now I do not know how this would work or have the captivities to figure it out. But would definitely be an added plus to what uniswap has been doing and increase token value!
Isn’t the UNI converted to USD to fund operations and initiatives? Given this is price dependent what happens to excess UNI once the budget is met?
Wouldn’t a more aligned incentive system be funding the budget dollar for dollar, maybe add in a x% buffer and then have a retroactive reward system based off value added from projects?
I’ve taken time to go through this proposal, and I appreciate how it tries to pull the whole ecosystem into one clear direction. Turning on protocol fees has been a long conversation in this community, and seeing a concrete path that ties those fees directly to UNI burn makes the model easier to understand. It gives people a simple link between protocol usage and token value, which is something many of us have been asking for over the years.
What stands out to me is the gradual rollout. I’ve watched fee discussions split the community before, so starting with the pools that carry most of the volume feels like a calm way to introduce the change without putting LPs under sudden pressure. I like that Labs plans to monitor the impact and suggest adjustments. I’ve seen proposals pass in other DAOs where parameters were set once and then ignored, and it always creates problems later. Having active oversight here matters.
I’ve taken time to go through this proposal, and I appreciate how it tries to pull the whole ecosystem into one clear direction. Turning on protocol fees has been a long conversation in this community, and seeing a concrete path that ties those fees directly to UNI burn makes the model easier to understand. It gives people a simple link between protocol usage and token value, which is something many of us have been asking for over the years.
What stands out to me is the gradual rollout. I’ve watched fee discussions split the community before, so starting with the pools that carry most of the volume feels like a calm way to introduce the change without putting LPs under sudden pressure. I like that Labs plans to monitor the impact and suggest adjustments. I’ve seen proposals pass in other DAOs where parameters were set once and then ignored, and it always creates problems later. Having active oversight here matters.
The PFDA idea caught my attention because MEV has always felt like this invisible leak in the system. If there’s a way to bring part of that value back to LPs and still support the burn, then it’s worth testing. I’d like to see real data once this goes live because MEV mechanics often behave differently in practice, but I’m open to the experiment.
I also think sending Unichain sequencer fees to the burn aligns the chain’s growth with UNI in a way that hasn’t existed before. Since Unichain is still young, setting this direction early helps avoid the usual confusion that comes when a new chain grows without a clear economic link to its parent ecosystem.
The part about moving Foundation teams to Labs is a big shift. I understand the logic behind having one unified direction, though I hope the transition doesn’t weaken the neutral governance support the Foundation has been offering. If this passes, I’d like to see regular updates on how responsibilities are being handled so the community doesn’t feel left in the dark.
Finally, the retroactive burn is a strong symbolic gesture. People have argued for years that UNI missed out on early fee capture, and while we can’t rewrite history, this at least acknowledges that conversation.
Overall, this is a major step, and I’m leaning positive. The proposal ties protocol growth, token value, and ecosystem incentives together in a way that feels more coherent than what we’ve had. I’d still like to see clarity on how Labs plans to communicate changes over time because coordination will matter more than ever once everything is under one roof. But directionally, this feels like the kind of push the protocol needs at this stage.
I support the proposal but share the same concerns as others regarding the v2 LP fee cut to 0.25% and directing 100% of fees to burns, while creating a strong deflationary narrative, could starve the DAO of a sustainable, non-inflationary budget for its own operations and grants.
Your proposal is sound except that it reduces incentive, increases risk for LPs. LP fees are already too low. Studies show half of LPs lose money….heavily leaning towards retail investors. v4 is nice but makes things more complex for retail investors. Is this how it’s going to stay? Pros make money and other LPs support the ecosystem by taking losses?
We are voting FOR this proposal.
The rationale for supporting the proposal’s implementation is that it represents a long-awaited step by the DAO/community to enable $UNI to capture value from the protocol developed by Uniswap.
We are voting FOR this proposal.
The rationale for supporting the proposal’s implementation is that it represents a long-awaited step by the DAO/community to enable $UNI to capture value from the protocol developed by Uniswap.
However, historically, buyback programs do not always generate value for a token. There are recent successful cases in the industry, such as $PUMP and $HYPE, but there are also protocols that have allocated millions to buybacks and still failed to achieve meaningful token performance.
We recommend that this buyback program be accompanied by recurring reports from Uniswap Labs or the DAO itself, so that we can measure the impact relative to the fees allocated to this initiative.
Another point that requires attention - already raised by SeedGov and Tane - is the possibility of liquidity providers migrating to other DEXs. Since the fee percentage will be reduced from 0.30% to 0.25%, it is important to track capital movement after the fee switch, if enacted. If the fee switch reduces Uniswap’s competitiveness in the DEX market, it should be reconsidered. We are counting on the success of PFDA (Protocol Fee Discount Auctions) to keep Uniswap’s liquidity provisioning competitive.
Lastly, the 20M $UNI budget requested for Growth could be postponed to a separate request/proposal. Since the Foundation will be wound down and everything will become centralized under Labs—and given that the Foundation had already approved a budget covering growth and development—its remaining resources could be transferred to Labs to fund this objective.
More takes here.
Thank you to the Uniswap team for empowering the UNI token — this is a major and meaningful change. By aligning the team’s incentives with the UNI token’s value, and continuously iterating on products while capturing more on-chain trading volume, Uniswap is building a strong moat around its ecosystem. Looking forward to the official vote going live!
Not necessarily true. If the UNI appreciates that labs entity can get appraisal on that value. The other side is while technically Labs might needs to sell UNI at some point to fund certain operations as long as it sells a smaller percentage of it’s holding than token reduction then it’s stake in the protocol remains the same.
For example, in a given year labs sells 2% of it’s holdings and fees burn 2% of the supply, then it’s percentage stake in the protocol effectively remains the same. This would be creating a synthetic dividend
What made you decide to burn the UNI token instead of releasing fees to people who have voted/participants in UNI governance as previously discussed?
Great to see that Uniswap Foundation and Labs are merging to fully focus on UNI and the protocols adoption. Defi is becoming more competitive and it is way too early to focus on monetization over winning market share and distribution.
We at Arrakis support this proposal and think rolling it out to Uni v2 and v3 first is a good move. Migration to Uni v4 has been too slow, even though that we have worked hard on making it seamless and 1-click for our users managing their Uniswap liquidity on Arrakis Pro.
Great to see that Uniswap Foundation and Labs are merging to fully focus on UNI and the protocols adoption. Defi is becoming more competitive and it is way too early to focus on monetization over winning market share and distribution.
We at Arrakis support this proposal and think rolling it out to Uni v2 and v3 first is a good move. Migration to Uni v4 has been too slow, even though that we have worked hard on making it seamless and 1-click for our users managing their Uniswap liquidity on Arrakis Pro.
As someone representing Liquidity Providers using Uniswap, it would be great to have more discussions around finding a sweet spot of protocol fees vs LP fees in the future, since this will be an important topic to be figured out, especially in a world of a more competitive DEX landscape.
With the projected reduction of LP fees from 0.3% to 0.25%, isn’t there a risk that liquidity providers might move their funds to other DEXs offering more attractive conditions?
This argument holds back uni token holder and the protocol’s revenue alignment issue for too long.
In the long run, it is impossible to have revenue growth and uni token value alignment separated.
I waited for this to happen for more than 4 years!
Uniswap changed 4 major versions meanwhile: a tremendous, colossal amount of work by team, which I’d like to thank for! :smiling_face_with_three_hearts:
20M UNI at today’s prices is about $180M per year. This is effectively an expense that offsets the majority if not all fees sent to the firepit. This maybe reasonable but we can’t say without seeing the details of the growth budget and how those funds will be utilized. Where can that be found? @devinwalsh @kenneth
Why is it being allocated in nominal token units? 20M is 2.2%+ of supply per year. Growth should have a budget and a dollar equivalent in UNI tokens should be granted.
20M UNI at today’s prices is about $180M per year. This is effectively an expense that offsets the majority if not all fees sent to the firepit. This maybe reasonable but we can’t say without seeing the details of the growth budget and how those funds will be utilized. Where can that be found? @devinwalsh @kenneth
Why is it being allocated in nominal token units? 20M is 2.2%+ of supply per year. Growth should have a budget and a dollar equivalent in UNI tokens should be granted.
Over 5 years after the UNI drop (and thank you, btw), the biggest legacy of Uniswap in DeFi, I feel, is the Uniswap v2 contract. For one simple reason. If you see just about any other smart contract on any EVM compatible chain, you have to think: “Well, where’s the gotcha.” Now, that chain might have gotchas! But that contract is going to do what it says on the tin. That’s beautiful, and what we, five years later, are missing now.
Governance is suggestions: 5 years of DeFi and I am convinced more than ever that decentralization is an ideal that is strived for at best, and given lip service at worst. Governance votes are never guarantees, always just suggestions. The examples of DeFi protocol insiders, the five or less actual “devs” who actually “do the thing,” making “emergency measures” despite token votes are numerous. At the end of the day, there’s always some human typing “git commit” and they may or may not do it based on the votes.
Back ends aren’t transparent and fixed: Then there are the “immutable” contracts themselves. Either they are completely obscured as to their source code, and full of admin keys and “upgradability,” or they have it simply a few layers deep, in another contract that is referenced or in some off-chain computational resource. Only a Uniswap v2 contract will do what it says on the tin. Every time. I mean, there may be more examples, but none off the top of my head, certainly not with the historical impact. And still current relevance! Someone spins up a new EVM compatible chain and someone two seconds later is going to come up with a Uniswap v2 clone with Uniswap v2 contracts that work exactly like they did, years ago. (But again, the chain itself could have admin keys, upgradability, 20 validators that are really just one dude, etc., etc.)
Front ends aren’t transparent and fixed: Of course, there are also frontends. Uniswap was also fairly historic (in a less positive way) for being the first high profile case of a “DeFi” protocol censoring their frontend for fear of regulatory attack. Those who knew, of course, could find a way to the Uniswap v2 contracts without using the Uniswap front end. And that’s beautiful. Because, at the time, there was basically no regulation—good or bad—there was only fear of de facto registration through legislation (hence the front-end censorship), but nothing actually written into law as far as I can recall. Which is okay, I think, if—if I can use the old maxim—Code is law. In /that world/ with no regulation, Code is Law works for me. I don’t know about this world. Personally, I was much less scared of smart contracts five years ago than just about everything that is going on now.
Over 5 years after the UNI drop (and thank you, btw), the biggest legacy of Uniswap in DeFi, I feel, is the Uniswap v2 contract. For one simple reason. If you see just about any other smart contract on any EVM compatible chain, you have to think: “Well, where’s the gotcha.” Now, that chain might have gotchas! But that contract is going to do what it says on the tin. That’s beautiful, and what we, five years later, are missing now.
Governance is suggestions: 5 years of DeFi and I am convinced more than ever that decentralization is an ideal that is strived for at best, and given lip service at worst. Governance votes are never guarantees, always just suggestions. The examples of DeFi protocol insiders, the five or less actual “devs” who actually “do the thing,” making “emergency measures” despite token votes are numerous. At the end of the day, there’s always some human typing “git commit” and they may or may not do it based on the votes.
Back ends aren’t transparent and fixed: Then there are the “immutable” contracts themselves. Either they are completely obscured as to their source code, and full of admin keys and “upgradability,” or they have it simply a few layers deep, in another contract that is referenced or in some off-chain computational resource. Only a Uniswap v2 contract will do what it says on the tin. Every time. I mean, there may be more examples, but none off the top of my head, certainly not with the historical impact. And still current relevance! Someone spins up a new EVM compatible chain and someone two seconds later is going to come up with a Uniswap v2 clone with Uniswap v2 contracts that work exactly like they did, years ago. (But again, the chain itself could have admin keys, upgradability, 20 validators that are really just one dude, etc., etc.)
Front ends aren’t transparent and fixed: Of course, there are also frontends. Uniswap was also fairly historic (in a less positive way) for being the first high profile case of a “DeFi” protocol censoring their frontend for fear of regulatory attack. Those who knew, of course, could find a way to the Uniswap v2 contracts without using the Uniswap front end. And that’s beautiful. Because, at the time, there was basically no regulation—good or bad—there was only fear of de facto registration through legislation (hence the front-end censorship), but nothing actually written into law as far as I can recall. Which is okay, I think, if—if I can use the old maxim—Code is law. In /that world/ with no regulation, Code is Law works for me. I don’t know about this world. Personally, I was much less scared of smart contracts five years ago than just about everything that is going on now.
(My personal view, if I may slightly digress, just so there’s no misunderstanding as to motives: Crypto should not be connected in any way to banks in any way where ultimately the general public should have to bail out the degens. FDIC-insured banks with “fractional reserves” should not be impacted if some crypto 1000x leveraged prediction market rug pulls or death spirals. That means, in my ideal world, yes, code is law, the MEV extractor or the MEV extractor’s extractor (per a recent case) is on equal terms—all the way up until the proverbial fist hits the proverbial nose, which to me is the onramps and offramps. Do what you want with your bits of 0s and 1s but when you try to convert them to dollars and cents… Well, where the buck starts, is where the buck stops. Just a bit of disclosure on my personal views. I also don’t like one-dollar-equals-one-vote and the outsized power of A16Z, etc., but that’s another matter for another day.)
So, I don’t think we’ll ever get away from a human has to type in “git commit” sometimes. Robots aren’t running the cooling towers in data centers. Humans will be a part. But we /can/ make it about as “immutable” and decentralized as possible when proposals are enacted, and I think this suggestion needs to incorporate this if we want to believe Uniswap is striving not lip-servicing.
Governance implementation is as human-less as possible: Basically, you have the high-level proposal, but you also have a very, very detail implementation plan connected to it. One that is clearly audited HEAVILY. But basically the plan is a really detailed computer program that is waiting to read the Ethereum blockchain (presumably) for the result of this vote as basically a parameter that will run the entire program. It details exactly what will happen to the contracts, the infrastructure, the websites, the front, the back, you name it and it happens all programmatically (ideally). If there’s ANY part with a human in it, make them have skin in the game, like Hayden Adams has to himself push some button, fine, but if he doesn’t push the button per the vote, then he has a legally-binding contract where he donates half his wealth to open-source development (or something).
Back-ends are transparent and fixed. Basically every trick they have now, remove it. No admin keys. No upgradability. As little as possible off-chain. Truly decentralized infrastructure would be great… Dunno if it exists. I mean, it does in name, the number of DePIN projects out there is insane. But how many are truly decentralized? But at the very, least there’s probably a way to use disinterested third-parties, maybe a lot of different DePINs and possibly classical infrastructure providers along with some kind of kill switch if it gets messed with and a High Availability solution to go to the others if it happens. In other words, Disaster Recovery assuming that a human wanting to go against the vote is /a disaster/. Not saying it will be easy, but I am pretty sure a solution can be made that is so whack-a-mole it won’t go down, won’t get changed.
Front-ends that are transparent and fixed. Permaweb is probably the easiest way to solve most of that. But just like back-ends, you got the High Availability, whack-a-mole solutions, that include P2P, Tor, you name it. I don’t doubt if there’s the money for it, there’s a solution for it. Point is, even if some powerful country says that memecoin is against our national interest, not much anyone can do about it coming (front end) or going (back end).
Of course, the biggest downside risk is you could spend a bunch of money on something, and after all those audits, it still ships with a bug that bricks it instantly. (Okay, that and a government decides everyone human who made a vote and/or enabled the enaction of that vote should be put in jail. That would be pretty bad.) BUT, at least everyone would know the result would be TRUE (as true as can be) Decentralized Finance.
[EDIT: 10 seconds later, formatting.]
This proposal is long overdue and represents the structural alignment UNI has needed since launch. Turning on protocol fees, directing them to burns, and linking token value directly to on-chain activity finally gives UNI true economic purpose.
The one-time burn and recurring fee capture mechanisms reward long-term holders and reinforce Uniswap’s position as a community-driven, revenue-generating protocol rather than just an LP platform.
This proposal is long overdue and represents the structural alignment UNI has needed since launch. Turning on protocol fees, directing them to burns, and linking token value directly to on-chain activity finally gives UNI true economic purpose.
The one-time burn and recurring fee capture mechanisms reward long-term holders and reinforce Uniswap’s position as a community-driven, revenue-generating protocol rather than just an LP platform.
Importantly, this change doesn’t rely on speculative hype — it builds a measurable, on-chain feedback loop between usage and value. That’s what will sustain Uniswap over the next cycle.
I fully support the proposal and encourage timely execution once the Snapshot passes. Let’s make UNI deflationary, sustainable, and representative of the ecosystem it powers.
Is all the functionality already implemented and the only thing that is left is turn on the switch?
Hey @haydenadams and team,
I read the proposal and think it’s great news for the development of the Uniswap AMMs and all the onchain infrastructure supporting it. That said, I do worry about the actual incentive alignment between Labs, the Foundation, and the protocol(s). Uniswap Labs is a Delaware C corp that raised large venture rounds on it’s equity and therefore has expectations from it’s investors that the Labs equity will be more valuable in the future. Traditionally businesses become more valuable by maximizing cash flow from it’s products. Instead it’s seems that Labs is moving away from this model by increasing the value of it’s UNI holdings which ideally happens the more revenue the Uniswap AMMs and supporting protocols generate. That seems fine in practice but to realize that value the company must sell it’s tokens, reducing its stake and therefore its future incentive to continue long term development. Even more so, it exposes the Labs entity to volatility and speculation of the UNI token. This moves Labs away from being a company focused on just products to one needing sophisticated treasury management operations. Additionally, if Labs is the primary entity building the protocol and expanding it’s market share, to what extent is it fair that Labs only receives a small portion of the value it creates by holding a small percentage of the token supply. Additionally, many of the core trading functions powered by Uniswap protocols (e.g. Unichain sequencer, UniswapX) requires Labs to run centralized infrastructure. This has created a massive, complex intermediary layer that if Labs truly went away would kill the viability of the protocol. If Labs shuts off it’s own interface fees, it could expose them to unpredictable revenues and thereby have consequential effects on the protocol(s) itself. More importantly, turning on the Uniswap fee switch and then burning UNI tokens feels like the Uniswap AMMs would no longer be public goods but instead a commercialized product. Needless to say, I still like the direction that Labs is taking to prioritize Uniswap V4 but remain skeptical of the alignment between Labs, protocol fees, and the UNI token if the actual protocol(s) are to remain public goods.
There are a few minor smart contract changes still to be made and we are planning one more round of audits before deployment! We welcome any feedback in the meantime and will include it on the bug bounty later this week with details to come
Obviously cool to see a meaningful proposal from @haydenadams about the UNI tokens future. However, I do think the proposal reads a lot more of ‘here’s what’s happening’ as opposed to ‘lets talk about the future of UNI’ regardless thought I’d post an alternative mechanism to burning 100% of the fees.
Instead, the fees could deposit revenue into a treasury based on the LP pools: ie fees from ETH/USDC pool accrue both ETH & USDC to the uniswap treasury, UNI/BANKER pool accrues both tokens, etc. UNI then creates a productive treasury that is an index of all tokens that are traded on uniswap.
Obviously cool to see a meaningful proposal from @haydenadams about the UNI tokens future. However, I do think the proposal reads a lot more of ‘here’s what’s happening’ as opposed to ‘lets talk about the future of UNI’ regardless thought I’d post an alternative mechanism to burning 100% of the fees.
Instead, the fees could deposit revenue into a treasury based on the LP pools: ie fees from ETH/USDC pool accrue both ETH & USDC to the uniswap treasury, UNI/BANKER pool accrues both tokens, etc. UNI then creates a productive treasury that is an index of all tokens that are traded on uniswap.
UNI token holders can then vote onchain about how to manage this treasury, capture the upside of all tokens that are traded on uniswap, sell tokens the DAO believes will go down, buy tokens the DAO believes will go up, form an endowment, introduce novel DeFi integrations to the treasury, etc, etc.
This to me seems like a much longer term and sustainable use of these fees.
20M UNI at today’s prices is about $180M per year. This is effectively an expense that offsets the majority if not all fees sent to the firepit. This maybe reasonable but we can’t say without seeing the details of the growth budget and how those funds will be utilized. Where can that be found? @devinwalsh @kenneth
Why is it being allocated in nominal token units? 20M is 2.2%+ of supply per year. Growth should have a budget and a dollar equivalent in UNI tokens should be granted.
20M UNI at today’s prices is about $180M per year. This is effectively an expense that offsets the majority if not all fees sent to the firepit. This maybe reasonable but we can’t say without seeing the details of the growth budget and how those funds will be utilized. Where can that be found? @devinwalsh @kenneth
Why is it being allocated in nominal token units? 20M is 2.2%+ of supply per year. Growth should have a budget and a dollar equivalent in UNI tokens should be granted.
Over 5 years after the UNI drop (and thank you, btw), the biggest legacy of Uniswap in DeFi, I feel, is the Uniswap v2 contract. For one simple reason. If you see just about any other smart contract on any EVM compatible chain, you have to think: “Well, where’s the gotcha.” Now, that chain might have gotchas! But that contract is going to do what it says on the tin. That’s beautiful, and what we, five years later, are missing now.
Governance is suggestions: 5 years of DeFi and I am convinced more than ever that decentralization is an ideal that is strived for at best, and given lip service at worst. Governance votes are never guarantees, always just suggestions. The examples of DeFi protocol insiders, the five or less actual “devs” who actually “do the thing,” making “emergency measures” despite token votes are numerous. At the end of the day, there’s always some human typing “git commit” and they may or may not do it based on the votes.
Back ends aren’t transparent and fixed: Then there are the “immutable” contracts themselves. Either they are completely obscured as to their source code, and full of admin keys and “upgradability,” or they have it simply a few layers deep, in another contract that is referenced or in some off-chain computational resource. Only a Uniswap v2 contract will do what it says on the tin. Every time. I mean, there may be more examples, but none off the top of my head, certainly not with the historical impact. And still current relevance! Someone spins up a new EVM compatible chain and someone two seconds later is going to come up with a Uniswap v2 clone with Uniswap v2 contracts that work exactly like they did, years ago. (But again, the chain itself could have admin keys, upgradability, 20 validators that are really just one dude, etc., etc.)
Front ends aren’t transparent and fixed: Of course, there are also frontends. Uniswap was also fairly historic (in a less positive way) for being the first high profile case of a “DeFi” protocol censoring their frontend for fear of regulatory attack. Those who knew, of course, could find a way to the Uniswap v2 contracts without using the Uniswap front end. And that’s beautiful. Because, at the time, there was basically no regulation—good or bad—there was only fear of de facto registration through legislation (hence the front-end censorship), but nothing actually written into law as far as I can recall. Which is okay, I think, if—if I can use the old maxim—Code is law. In /that world/ with no regulation, Code is Law works for me. I don’t know about this world. Personally, I was much less scared of smart contracts five years ago than just about everything that is going on now.
Over 5 years after the UNI drop (and thank you, btw), the biggest legacy of Uniswap in DeFi, I feel, is the Uniswap v2 contract. For one simple reason. If you see just about any other smart contract on any EVM compatible chain, you have to think: “Well, where’s the gotcha.” Now, that chain might have gotchas! But that contract is going to do what it says on the tin. That’s beautiful, and what we, five years later, are missing now.
Governance is suggestions: 5 years of DeFi and I am convinced more than ever that decentralization is an ideal that is strived for at best, and given lip service at worst. Governance votes are never guarantees, always just suggestions. The examples of DeFi protocol insiders, the five or less actual “devs” who actually “do the thing,” making “emergency measures” despite token votes are numerous. At the end of the day, there’s always some human typing “git commit” and they may or may not do it based on the votes.
Back ends aren’t transparent and fixed: Then there are the “immutable” contracts themselves. Either they are completely obscured as to their source code, and full of admin keys and “upgradability,” or they have it simply a few layers deep, in another contract that is referenced or in some off-chain computational resource. Only a Uniswap v2 contract will do what it says on the tin. Every time. I mean, there may be more examples, but none off the top of my head, certainly not with the historical impact. And still current relevance! Someone spins up a new EVM compatible chain and someone two seconds later is going to come up with a Uniswap v2 clone with Uniswap v2 contracts that work exactly like they did, years ago. (But again, the chain itself could have admin keys, upgradability, 20 validators that are really just one dude, etc., etc.)
Front ends aren’t transparent and fixed: Of course, there are also frontends. Uniswap was also fairly historic (in a less positive way) for being the first high profile case of a “DeFi” protocol censoring their frontend for fear of regulatory attack. Those who knew, of course, could find a way to the Uniswap v2 contracts without using the Uniswap front end. And that’s beautiful. Because, at the time, there was basically no regulation—good or bad—there was only fear of de facto registration through legislation (hence the front-end censorship), but nothing actually written into law as far as I can recall. Which is okay, I think, if—if I can use the old maxim—Code is law. In /that world/ with no regulation, Code is Law works for me. I don’t know about this world. Personally, I was much less scared of smart contracts five years ago than just about everything that is going on now.
(My personal view, if I may slightly digress, just so there’s no misunderstanding as to motives: Crypto should not be connected in any way to banks in any way where ultimately the general public should have to bail out the degens. FDIC-insured banks with “fractional reserves” should not be impacted if some crypto 1000x leveraged prediction market rug pulls or death spirals. That means, in my ideal world, yes, code is law, the MEV extractor or the MEV extractor’s extractor (per a recent case) is on equal terms—all the way up until the proverbial fist hits the proverbial nose, which to me is the onramps and offramps. Do what you want with your bits of 0s and 1s but when you try to convert them to dollars and cents… Well, where the buck starts, is where the buck stops. Just a bit of disclosure on my personal views. I also don’t like one-dollar-equals-one-vote and the outsized power of A16Z, etc., but that’s another matter for another day.)
So, I don’t think we’ll ever get away from a human has to type in “git commit” sometimes. Robots aren’t running the cooling towers in data centers. Humans will be a part. But we /can/ make it about as “immutable” and decentralized as possible when proposals are enacted, and I think this suggestion needs to incorporate this if we want to believe Uniswap is striving not lip-servicing.
Governance implementation is as human-less as possible: Basically, you have the high-level proposal, but you also have a very, very detail implementation plan connected to it. One that is clearly audited HEAVILY. But basically the plan is a really detailed computer program that is waiting to read the Ethereum blockchain (presumably) for the result of this vote as basically a parameter that will run the entire program. It details exactly what will happen to the contracts, the infrastructure, the websites, the front, the back, you name it and it happens all programmatically (ideally). If there’s ANY part with a human in it, make them have skin in the game, like Hayden Adams has to himself push some button, fine, but if he doesn’t push the button per the vote, then he has a legally-binding contract where he donates half his wealth to open-source development (or something).
Back-ends are transparent and fixed. Basically every trick they have now, remove it. No admin keys. No upgradability. As little as possible off-chain. Truly decentralized infrastructure would be great… Dunno if it exists. I mean, it does in name, the number of DePIN projects out there is insane. But how many are truly decentralized? But at the very, least there’s probably a way to use disinterested third-parties, maybe a lot of different DePINs and possibly classical infrastructure providers along with some kind of kill switch if it gets messed with and a High Availability solution to go to the others if it happens. In other words, Disaster Recovery assuming that a human wanting to go against the vote is /a disaster/. Not saying it will be easy, but I am pretty sure a solution can be made that is so whack-a-mole it won’t go down, won’t get changed.
Front-ends that are transparent and fixed. Permaweb is probably the easiest way to solve most of that. But just like back-ends, you got the High Availability, whack-a-mole solutions, that include P2P, Tor, you name it. I don’t doubt if there’s the money for it, there’s a solution for it. Point is, even if some powerful country says that memecoin is against our national interest, not much anyone can do about it coming (front end) or going (back end).
Of course, the biggest downside risk is you could spend a bunch of money on something, and after all those audits, it still ships with a bug that bricks it instantly. (Okay, that and a government decides everyone human who made a vote and/or enabled the enaction of that vote should be put in jail. That would be pretty bad.) BUT, at least everyone would know the result would be TRUE (as true as can be) Decentralized Finance.
[EDIT: 10 seconds later, formatting.]
This proposal is long overdue and represents the structural alignment UNI has needed since launch. Turning on protocol fees, directing them to burns, and linking token value directly to on-chain activity finally gives UNI true economic purpose.
The one-time burn and recurring fee capture mechanisms reward long-term holders and reinforce Uniswap’s position as a community-driven, revenue-generating protocol rather than just an LP platform.
This proposal is long overdue and represents the structural alignment UNI has needed since launch. Turning on protocol fees, directing them to burns, and linking token value directly to on-chain activity finally gives UNI true economic purpose.
The one-time burn and recurring fee capture mechanisms reward long-term holders and reinforce Uniswap’s position as a community-driven, revenue-generating protocol rather than just an LP platform.
Importantly, this change doesn’t rely on speculative hype — it builds a measurable, on-chain feedback loop between usage and value. That’s what will sustain Uniswap over the next cycle.
I fully support the proposal and encourage timely execution once the Snapshot passes. Let’s make UNI deflationary, sustainable, and representative of the ecosystem it powers.
Is all the functionality already implemented and the only thing that is left is turn on the switch?
Hey @haydenadams and team,
I read the proposal and think it’s great news for the development of the Uniswap AMMs and all the onchain infrastructure supporting it. That said, I do worry about the actual incentive alignment between Labs, the Foundation, and the protocol(s). Uniswap Labs is a Delaware C corp that raised large venture rounds on it’s equity and therefore has expectations from it’s investors that the Labs equity will be more valuable in the future. Traditionally businesses become more valuable by maximizing cash flow from it’s products. Instead it’s seems that Labs is moving away from this model by increasing the value of it’s UNI holdings which ideally happens the more revenue the Uniswap AMMs and supporting protocols generate. That seems fine in practice but to realize that value the company must sell it’s tokens, reducing its stake and therefore its future incentive to continue long term development. Even more so, it exposes the Labs entity to volatility and speculation of the UNI token. This moves Labs away from being a company focused on just products to one needing sophisticated treasury management operations. Additionally, if Labs is the primary entity building the protocol and expanding it’s market share, to what extent is it fair that Labs only receives a small portion of the value it creates by holding a small percentage of the token supply. Additionally, many of the core trading functions powered by Uniswap protocols (e.g. Unichain sequencer, UniswapX) requires Labs to run centralized infrastructure. This has created a massive, complex intermediary layer that if Labs truly went away would kill the viability of the protocol. If Labs shuts off it’s own interface fees, it could expose them to unpredictable revenues and thereby have consequential effects on the protocol(s) itself. More importantly, turning on the Uniswap fee switch and then burning UNI tokens feels like the Uniswap AMMs would no longer be public goods but instead a commercialized product. Needless to say, I still like the direction that Labs is taking to prioritize Uniswap V4 but remain skeptical of the alignment between Labs, protocol fees, and the UNI token if the actual protocol(s) are to remain public goods.
There are a few minor smart contract changes still to be made and we are planning one more round of audits before deployment! We welcome any feedback in the meantime and will include it on the bug bounty later this week with details to come
Obviously cool to see a meaningful proposal from @haydenadams about the UNI tokens future. However, I do think the proposal reads a lot more of ‘here’s what’s happening’ as opposed to ‘lets talk about the future of UNI’ regardless thought I’d post an alternative mechanism to burning 100% of the fees.
Instead, the fees could deposit revenue into a treasury based on the LP pools: ie fees from ETH/USDC pool accrue both ETH & USDC to the uniswap treasury, UNI/BANKER pool accrues both tokens, etc. UNI then creates a productive treasury that is an index of all tokens that are traded on uniswap.
Obviously cool to see a meaningful proposal from @haydenadams about the UNI tokens future. However, I do think the proposal reads a lot more of ‘here’s what’s happening’ as opposed to ‘lets talk about the future of UNI’ regardless thought I’d post an alternative mechanism to burning 100% of the fees.
Instead, the fees could deposit revenue into a treasury based on the LP pools: ie fees from ETH/USDC pool accrue both ETH & USDC to the uniswap treasury, UNI/BANKER pool accrues both tokens, etc. UNI then creates a productive treasury that is an index of all tokens that are traded on uniswap.
UNI token holders can then vote onchain about how to manage this treasury, capture the upside of all tokens that are traded on uniswap, sell tokens the DAO believes will go down, buy tokens the DAO believes will go up, form an endowment, introduce novel DeFi integrations to the treasury, etc, etc.
This to me seems like a much longer term and sustainable use of these fees.
Overall, as someone who has been working with tokenomics for many years, I view this initiative positively.
However, I would like to make several clarifications:
Burning is not the only incentive mechanism → it works best when balanced with other methods such as staking or direct fee distribution. The fundamental rule of tokenomics derives from the law of supply and demand: the more effectively we increase demand while reducing supply, the stronger the incentive for token growth overall.
The governance function of UNI and the inclusion of new participants must not be overlooked, since without that, decentralization will be compromised. Therefore, additional reward campaigns → like those held recently, which allowed users to earn UNI through activity and liquidity provision rather than direct purchases → and similar actions will still be necessary.
Most likely, the team is cautious about introducing direct buybacks or fee distributions due to recurring regulatory risks, so at this stage, the burn mechanism may indeed be the most appropriate solution.
So overall, I believe that this approach will be beneficial at this stage.
Thank you for all the feedback/questions! Responding to the main themes I’ve seen so far:
Why burn instead of staking?
Burning is the most straightforward way to handle fees without introducing staking mechanics or other structures that add tax complexity. This doesn’t close the door on governance choosing a different model later if the community wants to explore one.
Why burn instead of growth?
Thank you for all the feedback/questions! Responding to the main themes I’ve seen so far:
Why burn instead of staking?
Burning is the most straightforward way to handle fees without introducing staking mechanics or other structures that add tax complexity. This doesn’t close the door on governance choosing a different model later if the community wants to explore one.
Why burn instead of growth?
The treasury holds ~370 million UNI – the DAO is not short on resources. If that ever changes, governance has options to address that issue, including updates to the burn mechanism. But we’re a long way from needing that.
How will you use the growth budget?
The largest portion of this budget goes toward protocol development and product engineering, along with significant investments in builder support, partnerships, growth, and incentives. A smaller portion covers operations, policy, legal, and taxes. The proposal also includes a roadmap with some of what we aim to build, with a lot more to come. We’ll also provide regular updates on budget utilization, including impact reports.
What about the Foundation budget?
The Foundation will continue deploying existing funds for grants and ecosystem programs. Once those are fully deployed, the Foundation will close operations and ongoing ecosystem work will move to Labs, funded out of the growth budget.
Why denominate in UNI vs USD?
Denominating in UNI improves alignment, aligning upside and increase in resources to protocol growth. If the number is not right long term, this can be adjusted in future governance proposals.
What about decentralization?
Governance has control over protocol fees and the treasury regardless of whether this proposal passes or not. The protocol will always be decentralized and permissionless, enforced by immutable smart contracts.
Finally, if this passes Labs will shift its focus from its products, to protocol growth and development – which means empowering all the other teams building on the protocol. The result of this will be a further decentralization of the ecosystem around Uniswap.
What does this mean for LPs?
LPs are a critical priority. This includes shipping Protocol Fee Discount Auctions, which are designed to improve LP outcomes by internalizing MEV that currently goes to searchers. It also means Labs will invest heavily in LP tooling, such as hook integrations, hook development, CCA, frontend upgrades, and more.
As far as fee levels and impact on LPs, v2 fees are hardcoded and can only be enabled or disabled across all pools at once. On v3, we proposed a list of pools (available here), and fee levels, that we believe is the right place to start.
We'll assist the community in monitoring the impact on LP performance and targeted incentives can be deployed as needed to help provide a smooth transition ahead of PFDA being implemented, along with future proposals to adjust fees if needed.
Will the contracts be audited?
A final round of audits is in progress, and the remaining contract changes are mostly minor. No onchain proposal will be submitted before this is done. All components will be added to the bug bounty program.
I really appreciate the thoughtful engagement so far! The response has been overwhelmingly positive and we plan to post the Snapshot soon.
I can hardly believe believe we’ve finally come to this day. Great work everyone. The flame of DeFi rises!
Overall, as someone who has been working with tokenomics for many years, I view this initiative positively.
However, I would like to make several clarifications:
Burning is not the only incentive mechanism → it works best when balanced with other methods such as staking or direct fee distribution. The fundamental rule of tokenomics derives from the law of supply and demand: the more effectively we increase demand while reducing supply, the stronger the incentive for token growth overall.
The governance function of UNI and the inclusion of new participants must not be overlooked, since without that, decentralization will be compromised. Therefore, additional reward campaigns → like those held recently, which allowed users to earn UNI through activity and liquidity provision rather than direct purchases → and similar actions will still be necessary.
Most likely, the team is cautious about introducing direct buybacks or fee distributions due to recurring regulatory risks, so at this stage, the burn mechanism may indeed be the most appropriate solution.
So overall, I believe that this approach will be beneficial at this stage.
Thank you for all the feedback/questions! Responding to the main themes I’ve seen so far:
Why burn instead of staking?
Burning is the most straightforward way to handle fees without introducing staking mechanics or other structures that add tax complexity. This doesn’t close the door on governance choosing a different model later if the community wants to explore one.
Why burn instead of growth?
Thank you for all the feedback/questions! Responding to the main themes I’ve seen so far:
Why burn instead of staking?
Burning is the most straightforward way to handle fees without introducing staking mechanics or other structures that add tax complexity. This doesn’t close the door on governance choosing a different model later if the community wants to explore one.
Why burn instead of growth?
The treasury holds ~370 million UNI – the DAO is not short on resources. If that ever changes, governance has options to address that issue, including updates to the burn mechanism. But we’re a long way from needing that.
How will you use the growth budget?
The largest portion of this budget goes toward protocol development and product engineering, along with significant investments in builder support, partnerships, growth, and incentives. A smaller portion covers operations, policy, legal, and taxes. The proposal also includes a roadmap with some of what we aim to build, with a lot more to come. We’ll also provide regular updates on budget utilization, including impact reports.
What about the Foundation budget?
The Foundation will continue deploying existing funds for grants and ecosystem programs. Once those are fully deployed, the Foundation will close operations and ongoing ecosystem work will move to Labs, funded out of the growth budget.
Why denominate in UNI vs USD?
Denominating in UNI improves alignment, aligning upside and increase in resources to protocol growth. If the number is not right long term, this can be adjusted in future governance proposals.
What about decentralization?
Governance has control over protocol fees and the treasury regardless of whether this proposal passes or not. The protocol will always be decentralized and permissionless, enforced by immutable smart contracts.
Finally, if this passes Labs will shift its focus from its products, to protocol growth and development – which means empowering all the other teams building on the protocol. The result of this will be a further decentralization of the ecosystem around Uniswap.
What does this mean for LPs?
LPs are a critical priority. This includes shipping Protocol Fee Discount Auctions, which are designed to improve LP outcomes by internalizing MEV that currently goes to searchers. It also means Labs will invest heavily in LP tooling, such as hook integrations, hook development, CCA, frontend upgrades, and more.
As far as fee levels and impact on LPs, v2 fees are hardcoded and can only be enabled or disabled across all pools at once. On v3, we proposed a list of pools (available here), and fee levels, that we believe is the right place to start.
We'll assist the community in monitoring the impact on LP performance and targeted incentives can be deployed as needed to help provide a smooth transition ahead of PFDA being implemented, along with future proposals to adjust fees if needed.
Will the contracts be audited?
A final round of audits is in progress, and the remaining contract changes are mostly minor. No onchain proposal will be submitted before this is done. All components will be added to the bug bounty program.
I really appreciate the thoughtful engagement so far! The response has been overwhelmingly positive and we plan to post the Snapshot soon.
I can hardly believe believe we’ve finally come to this day. Great work everyone. The flame of DeFi rises!
I will support this proposal.
Let me first share my personal opinion on fee switches. The ideal solution would be for the protocol to remain a public good, a fee-less DeFi base layer. I'm finally able to say this clearly, without risking that I appear to be siding with the "bad guys" and being against any decisions. (Also to be clear, as delegate I'm representing UNI holder interests, not my personal opinion - at least not just it.) That ideal solution is of course now not possible, due to many reasons. It probably stopped being a good option the moment the UNI token was created.
I will support this proposal.
Let me first share my personal opinion on fee switches. The ideal solution would be for the protocol to remain a public good, a fee-less DeFi base layer. I'm finally able to say this clearly, without risking that I appear to be siding with the "bad guys" and being against any decisions. (Also to be clear, as delegate I'm representing UNI holder interests, not my personal opinion - at least not just it.) That ideal solution is of course now not possible, due to many reasons. It probably stopped being a good option the moment the UNI token was created.
Having said that, this proposal is great. A couple of highlights:
A 20M UNI budget for protocol development and growth. This is obviously a significant amount but directly depends on the UNI price, so indirectly on the protocol's performance. And if we want to spend treasury funds on development and growth at all, Uniswap Labs is by far the most deserving candidate!
Protocol Fee Discount Auction. I've been arguing many times that any fee switch needs to consider LPs and compensate them somehow. This is it. At worst, it's a nice gesture that should be appreciated. At best, the Labs researchers have found a solution to the LP retention problem. It remains to be seen how efficient this mechanism is, as the theory only shows a ~5% reduction in arbitrage loss. However, if it works sufficiently well, it will be another example in which Uniswap produces a "good enough" solution that actually works within the realistic implementation constraints.
Looking forward to better understanding the upcoming relations between equity and token holders , as well as the role of community hook builders in a world where the Labs drive protocol development & growth.
We have voted yes for now as the proposal has several of new alignment between Uniswap DAO and Uniswap Foundation and Labs. However, we will assess and vote each proposal independently, especially any proposals with specific budgets attached from the treasury.
Abstain
As a Uniswap delegate, my responsibility is to vote in the long-term interest of the protocol and, as stated in my delegate statement, my position has been LP-first from the beginning.
Abstain
As a Uniswap delegate, my responsibility is to vote in the long-term interest of the protocol and, as stated in my delegate statement, my position has been LP-first from the beginning.
Today, Uniswap’s moat is built entirely on LP economics and LP loyalty. While the pervasive narrative is that LPs are systematically losing money (LPing is tough, I know!), there are plenty of LPs still out there that have figured out how to remain profitable. I spoke with many of them over the past week, and those LPs will be quite sensitive to revenue dilution. Their hurdle is already tight, and any fee that reduces LP earnings by 25 percent will result in economically-driven migration to other platforms. Or maybe the goal is to force them to move to v4, but the fee switch could (will?) be turned on v4 pools too.
I also have a material conflict for this vote: my own protocol would benefit economically if Uniswap adopts this fee switch, since reduced LP revenue makes Panoptic more comparatively attractive and able to capitalize on that LP dissatisfaction.
Because of that conflict, I do not believe I should cast a vote on this proposal, as my vote could be interpreted as self-interested. I am therefore abstaining from voting on this issue to maintain neutrality and governance integrity.
The following reflects the views of L2BEAT’s governance team, composed of @kaereste and @Manugotsuka, based on our combined research, fact-checking, and ideation.
We voted FOR.
Before the vote, our research team reviewed the on-chain payload and validated the function calls against the published spec. We did not find issues that would prevent us from supporting this initiative.
The following reflects the views of L2BEAT’s governance team, composed of @kaereste and @Manugotsuka, based on our combined research, fact-checking, and ideation.
We voted FOR.
Before the vote, our research team reviewed the on-chain payload and validated the function calls against the published spec. We did not find issues that would prevent us from supporting this initiative.
We supported the proposal in the temperature check and we support it onchain, we believe it’s a step in the right direction for the Uniswap entities.
We fully support this proposal and have voted in favor of it. We would like to express our special thanks to Hayden Adams for the clarifications provided in this thread and for the excellent, extensive discussion and Q&A session held among Govswap attendees at Devconnect in Buenos Aires.
This is our rationale as published on our Delegation Platform:
First of all, we want to congratulate the team for the work done in developing this long-awaited proposal, which we fully support!
Secondly, we have a few questions we’d like to clarify:
First of all, we want to congratulate the team for the work done in developing this long-awaited proposal, which we fully support!
Secondly, we have a few questions we’d like to clarify:
With the projected reduction of LP fees from 0.3% to 0.25%, isn’t there a risk that liquidity providers might move their funds to other DEXs offering more attractive conditions? If that happens, lower liquidity in the pools and higher IL could lead to a decrease in trading activity and volume, thereby reducing the protocol’s revenue and, consequently, the amount of UNI to be burned. Was this risk assessed? Is there room to reconsider the fee strategy if such effects are observed?
We’d like to better understand the rationale behind allocating the entire Protocol Fee to token burns, rather than reserving part of it for growth initiatives or revenue sharing with tokenholders. Was any financial analysis conducted to support the idea that burning 100% of fees is preferable to using a portion to strengthen growth or reward holders? Why was this total burn mechanism chosen?
Regarding the budget request of 20M UNI starting in January 2026, aimed at funding growth and protocol development, isn’t there a potential overlap with the $ 25.1M budget approved for the Uniswap Foundation in March this year, which already included allocations for development and growth over the next two years? Given that Uniswap Labs will now take over growth and development responsibilities, along with the transfer of staff and operations from the Foundation to Labs, will the @UniswapFoundation return to the DAO the previously approved budget?
What growth initiatives can you tell us about that will be carried out with the required budget? Is there a tentative roadmap you can share?
Thanks.
Thanks for creating this proposal. Given the importance and irreversibility of this proposal, Franklin DAO would like clarifications on several points.
With the decrease of LP fees in v2 from LP fees 0.3% to 0.25% and Protocol fee changes, would the estimated returns of the Protocol Fee Discount Auction (PFDA) mechanism be sufficient to offset the difference in LP income and maintain Uniswap’s competitiveness in retaining LP’s?
Building off the constructive suggestion of @SeedGov, what are the alternatives to the burn mechanism that have been considered, and what are tradeoffs considered?
How is the size of the growth budget determined, and can the planned allocation of the budget be further elaborated?
We appreciate the comprehensive and ambitious vision laid out in this proposal, which seeks to realign Uniswap’s economic model and governance structure for long-term sustainability. We are in support of the proposal and looking forward to the execution of the proposed initiatives in it.
We'd like to raise a couple of issues to be addressed before its execution:
We appreciate the comprehensive and ambitious vision laid out in this proposal, which seeks to realign Uniswap’s economic model and governance structure for long-term sustainability. We are in support of the proposal and looking forward to the execution of the proposed initiatives in it.
We'd like to raise a couple of issues to be addressed before its execution:
The proposed reduction of V2 LP fees from 0.3% to 0.25% introduces a real risk of liquidity migration to other DEXs offering more attractive terms. As @SEEDGov points out, lower liquidity could lead to higher impermanent loss and reduced trading activity, which would directly impact protocol revenue and the effectiveness of the UNI burn mechanism. While we acknowledge the development of the Protocol Fee Discount Auction system and its potential but its work is still in progress and only a promising theory as of now, shouldn't we consider temporary incentives for the LPs to stick to utilizing their assets into the Uniswap pools?
Another area that deserves discussions is the decision to allocate the entirety of protocol fees to token burns. While this creates a strong deflationary narrative, it may limit the DAO's ability to fund future development, grants, or DAO operations. As a DAO, potentially in the near future, we should implement another Releaser in addition to Firepit to allocate a potion of the fee that accumulates in TokenJar to the DAO treasury for the DAO operations and other initiatives.
The last one is more of a question; we welcome the change where most of the members in the Foundation move to Labs and eventually will be dissolved because it simplifies the structure, and clarifies where the responsibilities and capacities exist. Is this decision made because the DAO finally adopts DUNI, and/or other regulation landscape has changed?
Haven’t been very active on Uniswap governance for a while, but soooo pumped for this! :nerd_face:
Foundation + Labs = Protocol
UF + UL = UP !!! :unicorn: :up_arrow: :rocket:
yj
With the removal of the front end fee, is there path to increase LP fees? Given FE fee was 0.25% and LPs are losing 0.05% there is more than enough in savings to boost LPs to their previous levels while also providing the same 0.05% to burn.
As a small delegate that did not contribute to this proposal, the Argonaut team appreciates the chance to comment. The community has waited a long time for this milestone for the Uniswap DAO, and we trusted Uniswap Labs to make the right call by moving away from directing interface revenues to themselves and establishing a framework that creates value for the DAO and the governance token. This proposal exceeds our expectations and speaks to the caliber of the teams at Uniswap Labs and the Uniswap Foundation. We will vote in favor. Congratulations to everyone who made it possible! :fire: :unicorn: :rocket:
Awesome thanks @marktoda
I am voting FOR UNIfication. It is finally time to flip the fee switch and make UNI value-accruing.
This proposal goes beyond just protocol fees; routing Unichain sequencer revenue and MEV capture (via PFDA) into the burn mechanism creates a powerful engine for scarcity. I’m also strongly in favor of the 100M UNI retroactive burn and Labs’ decision to drop interface fees to zero, this ensures total alignment where Labs only wins when the Protocol wins.
I will support this proposal.
Let me first share my personal opinion on fee switches. The ideal solution would be for the protocol to remain a public good, a fee-less DeFi base layer. I'm finally able to say this clearly, without risking that I appear to be siding with the "bad guys" and being against any decisions. (Also to be clear, as delegate I'm representing UNI holder interests, not my personal opinion - at least not just it.) That ideal solution is of course now not possible, due to many reasons. It probably stopped being a good option the moment the UNI token was created.
I will support this proposal.
Let me first share my personal opinion on fee switches. The ideal solution would be for the protocol to remain a public good, a fee-less DeFi base layer. I'm finally able to say this clearly, without risking that I appear to be siding with the "bad guys" and being against any decisions. (Also to be clear, as delegate I'm representing UNI holder interests, not my personal opinion - at least not just it.) That ideal solution is of course now not possible, due to many reasons. It probably stopped being a good option the moment the UNI token was created.
Having said that, this proposal is great. A couple of highlights:
A 20M UNI budget for protocol development and growth. This is obviously a significant amount but directly depends on the UNI price, so indirectly on the protocol's performance. And if we want to spend treasury funds on development and growth at all, Uniswap Labs is by far the most deserving candidate!
Protocol Fee Discount Auction. I've been arguing many times that any fee switch needs to consider LPs and compensate them somehow. This is it. At worst, it's a nice gesture that should be appreciated. At best, the Labs researchers have found a solution to the LP retention problem. It remains to be seen how efficient this mechanism is, as the theory only shows a ~5% reduction in arbitrage loss. However, if it works sufficiently well, it will be another example in which Uniswap produces a "good enough" solution that actually works within the realistic implementation constraints.
Looking forward to better understanding the upcoming relations between equity and token holders , as well as the role of community hook builders in a world where the Labs drive protocol development & growth.
We have voted yes for now as the proposal has several of new alignment between Uniswap DAO and Uniswap Foundation and Labs. However, we will assess and vote each proposal independently, especially any proposals with specific budgets attached from the treasury.
Abstain
As a Uniswap delegate, my responsibility is to vote in the long-term interest of the protocol and, as stated in my delegate statement, my position has been LP-first from the beginning.
Abstain
As a Uniswap delegate, my responsibility is to vote in the long-term interest of the protocol and, as stated in my delegate statement, my position has been LP-first from the beginning.
Today, Uniswap’s moat is built entirely on LP economics and LP loyalty. While the pervasive narrative is that LPs are systematically losing money (LPing is tough, I know!), there are plenty of LPs still out there that have figured out how to remain profitable. I spoke with many of them over the past week, and those LPs will be quite sensitive to revenue dilution. Their hurdle is already tight, and any fee that reduces LP earnings by 25 percent will result in economically-driven migration to other platforms. Or maybe the goal is to force them to move to v4, but the fee switch could (will?) be turned on v4 pools too.
I also have a material conflict for this vote: my own protocol would benefit economically if Uniswap adopts this fee switch, since reduced LP revenue makes Panoptic more comparatively attractive and able to capitalize on that LP dissatisfaction.
Because of that conflict, I do not believe I should cast a vote on this proposal, as my vote could be interpreted as self-interested. I am therefore abstaining from voting on this issue to maintain neutrality and governance integrity.
The following reflects the views of L2BEAT’s governance team, composed of @kaereste and @Manugotsuka, based on our combined research, fact-checking, and ideation.
We voted FOR.
Before the vote, our research team reviewed the on-chain payload and validated the function calls against the published spec. We did not find issues that would prevent us from supporting this initiative.
The following reflects the views of L2BEAT’s governance team, composed of @kaereste and @Manugotsuka, based on our combined research, fact-checking, and ideation.
We voted FOR.
Before the vote, our research team reviewed the on-chain payload and validated the function calls against the published spec. We did not find issues that would prevent us from supporting this initiative.
We supported the proposal in the temperature check and we support it onchain, we believe it’s a step in the right direction for the Uniswap entities.
We fully support this proposal and have voted in favor of it. We would like to express our special thanks to Hayden Adams for the clarifications provided in this thread and for the excellent, extensive discussion and Q&A session held among Govswap attendees at Devconnect in Buenos Aires.
This is our rationale as published on our Delegation Platform:
First of all, we want to congratulate the team for the work done in developing this long-awaited proposal, which we fully support!
Secondly, we have a few questions we’d like to clarify:
First of all, we want to congratulate the team for the work done in developing this long-awaited proposal, which we fully support!
Secondly, we have a few questions we’d like to clarify:
With the projected reduction of LP fees from 0.3% to 0.25%, isn’t there a risk that liquidity providers might move their funds to other DEXs offering more attractive conditions? If that happens, lower liquidity in the pools and higher IL could lead to a decrease in trading activity and volume, thereby reducing the protocol’s revenue and, consequently, the amount of UNI to be burned. Was this risk assessed? Is there room to reconsider the fee strategy if such effects are observed?
We’d like to better understand the rationale behind allocating the entire Protocol Fee to token burns, rather than reserving part of it for growth initiatives or revenue sharing with tokenholders. Was any financial analysis conducted to support the idea that burning 100% of fees is preferable to using a portion to strengthen growth or reward holders? Why was this total burn mechanism chosen?
Regarding the budget request of 20M UNI starting in January 2026, aimed at funding growth and protocol development, isn’t there a potential overlap with the $ 25.1M budget approved for the Uniswap Foundation in March this year, which already included allocations for development and growth over the next two years? Given that Uniswap Labs will now take over growth and development responsibilities, along with the transfer of staff and operations from the Foundation to Labs, will the @UniswapFoundation return to the DAO the previously approved budget?
What growth initiatives can you tell us about that will be carried out with the required budget? Is there a tentative roadmap you can share?
Thanks.
Thanks for creating this proposal. Given the importance and irreversibility of this proposal, Franklin DAO would like clarifications on several points.
With the decrease of LP fees in v2 from LP fees 0.3% to 0.25% and Protocol fee changes, would the estimated returns of the Protocol Fee Discount Auction (PFDA) mechanism be sufficient to offset the difference in LP income and maintain Uniswap’s competitiveness in retaining LP’s?
Building off the constructive suggestion of @SeedGov, what are the alternatives to the burn mechanism that have been considered, and what are tradeoffs considered?
How is the size of the growth budget determined, and can the planned allocation of the budget be further elaborated?
We appreciate the comprehensive and ambitious vision laid out in this proposal, which seeks to realign Uniswap’s economic model and governance structure for long-term sustainability. We are in support of the proposal and looking forward to the execution of the proposed initiatives in it.
We'd like to raise a couple of issues to be addressed before its execution:
We appreciate the comprehensive and ambitious vision laid out in this proposal, which seeks to realign Uniswap’s economic model and governance structure for long-term sustainability. We are in support of the proposal and looking forward to the execution of the proposed initiatives in it.
We'd like to raise a couple of issues to be addressed before its execution:
The proposed reduction of V2 LP fees from 0.3% to 0.25% introduces a real risk of liquidity migration to other DEXs offering more attractive terms. As @SEEDGov points out, lower liquidity could lead to higher impermanent loss and reduced trading activity, which would directly impact protocol revenue and the effectiveness of the UNI burn mechanism. While we acknowledge the development of the Protocol Fee Discount Auction system and its potential but its work is still in progress and only a promising theory as of now, shouldn't we consider temporary incentives for the LPs to stick to utilizing their assets into the Uniswap pools?
Another area that deserves discussions is the decision to allocate the entirety of protocol fees to token burns. While this creates a strong deflationary narrative, it may limit the DAO's ability to fund future development, grants, or DAO operations. As a DAO, potentially in the near future, we should implement another Releaser in addition to Firepit to allocate a potion of the fee that accumulates in TokenJar to the DAO treasury for the DAO operations and other initiatives.
The last one is more of a question; we welcome the change where most of the members in the Foundation move to Labs and eventually will be dissolved because it simplifies the structure, and clarifies where the responsibilities and capacities exist. Is this decision made because the DAO finally adopts DUNI, and/or other regulation landscape has changed?
Haven’t been very active on Uniswap governance for a while, but soooo pumped for this! :nerd_face:
Foundation + Labs = Protocol
UF + UL = UP !!! :unicorn: :up_arrow: :rocket:
yj
With the removal of the front end fee, is there path to increase LP fees? Given FE fee was 0.25% and LPs are losing 0.05% there is more than enough in savings to boost LPs to their previous levels while also providing the same 0.05% to burn.
As a small delegate that did not contribute to this proposal, the Argonaut team appreciates the chance to comment. The community has waited a long time for this milestone for the Uniswap DAO, and we trusted Uniswap Labs to make the right call by moving away from directing interface revenues to themselves and establishing a framework that creates value for the DAO and the governance token. This proposal exceeds our expectations and speaks to the caliber of the teams at Uniswap Labs and the Uniswap Foundation. We will vote in favor. Congratulations to everyone who made it possible! :fire: :unicorn: :rocket:
Awesome thanks @marktoda
I am voting FOR UNIfication. It is finally time to flip the fee switch and make UNI value-accruing.
This proposal goes beyond just protocol fees; routing Unichain sequencer revenue and MEV capture (via PFDA) into the burn mechanism creates a powerful engine for scarcity. I’m also strongly in favor of the 100M UNI retroactive burn and Labs’ decision to drop interface fees to zero, this ensures total alignment where Labs only wins when the Protocol wins.
We fully support this proposal and have voted in favor of it. We would like to express our special thanks to Hayden Adams for the clarifications provided in this thread and for the excellent, extensive discussion and Q&A session held among Govswap attendees at Devconnect in Buenos Aires.
This is our rationale as published on our Delegation Platform:
We would like to extend our special thanks to @haydenadams for addressing the questions and concerns raised by many community members, including ourselves, both on the forum and, notably, during the in-depth conversation and Q&A session held with the delegates attending GovSwap in Buenos Aires during Devconnect.
Thanks for creating this proposal. Given the importance and irreversibility of this proposal, Franklin DAO would like clarifications on several points.
With the decrease of LP fees in v2 from LP fees 0.3% to 0.25% and Protocol fee changes, would the estimated returns of the Protocol Fee Discount Auction (PFDA) mechanism be sufficient to offset the difference in LP income and maintain Uniswap’s competitiveness in retaining LP’s?
Building off the constructive suggestion of @SeedGov, what are the alternatives to the burn mechanism that have been considered, and what are tradeoffs considered?
How is the size of the growth budget determined, and can the planned allocation of the budget be further elaborated?
We are excited for the development of this overdue transition. Given the importance, we want to ensure the best possible implementation for this new chapter.
I am voting FOR UNIfication. It is finally time to flip the fee switch and make UNI value-accruing.
This proposal goes beyond just protocol fees; routing Unichain sequencer revenue and MEV capture (via PFDA) into the burn mechanism creates a powerful engine for scarcity. I’m also strongly in favor of the 100M UNI retroactive burn and Labs’ decision to drop interface fees to zero, this ensures total alignment where Labs only wins when the Protocol wins.
Big thanks to @haydenadams and the Foundation for the GovSwap meetups. Being able to ask questions directly really helped provide clarity on the details and gave the delegates the confidence to support this proposal.
Hey @haydenadams, this is an exciting proposal and it’s exciting to see you being the one to make it!
Can you confirm this commit, which is linked from the docs, represents the version of the protocol fee contracts you intend to deploy and go live with. We see the OZ audit reports. Were/will any additional audits performed?
Hey @haydenadams, this is an exciting proposal and it’s exciting to see you being the one to make it!
Can you confirm this commit, which is linked from the docs, represents the version of the protocol fee contracts you intend to deploy and go live with. We see the OZ audit reports. Were/will any additional audits performed?
ScopeLift looks forward to digging into the technical details of the proposal at length and sharing our analysis. I will say that my high level, gut reaction to what has been proposed is a positive one. Thanks to everyone who helped make it possible :saluting_face:
Glad to see this come to fruition, happy to vote in support here.
We support the long waited initiaves. We will vote in support for both Uniswap fee switch as well as burns 🔥
We fully support this proposal and have voted in favor of it. We would like to express our special thanks to Hayden Adams for the clarifications provided in this thread and for the excellent, extensive discussion and Q&A session held among Govswap attendees at Devconnect in Buenos Aires.
This is our rationale as published on our Delegation Platform:
We would like to extend our special thanks to @haydenadams for addressing the questions and concerns raised by many community members, including ourselves, both on the forum and, notably, during the in-depth conversation and Q&A session held with the delegates attending GovSwap in Buenos Aires during Devconnect.
Thanks for creating this proposal. Given the importance and irreversibility of this proposal, Franklin DAO would like clarifications on several points.
With the decrease of LP fees in v2 from LP fees 0.3% to 0.25% and Protocol fee changes, would the estimated returns of the Protocol Fee Discount Auction (PFDA) mechanism be sufficient to offset the difference in LP income and maintain Uniswap’s competitiveness in retaining LP’s?
Building off the constructive suggestion of @SeedGov, what are the alternatives to the burn mechanism that have been considered, and what are tradeoffs considered?
How is the size of the growth budget determined, and can the planned allocation of the budget be further elaborated?
We are excited for the development of this overdue transition. Given the importance, we want to ensure the best possible implementation for this new chapter.
I am voting FOR UNIfication. It is finally time to flip the fee switch and make UNI value-accruing.
This proposal goes beyond just protocol fees; routing Unichain sequencer revenue and MEV capture (via PFDA) into the burn mechanism creates a powerful engine for scarcity. I’m also strongly in favor of the 100M UNI retroactive burn and Labs’ decision to drop interface fees to zero, this ensures total alignment where Labs only wins when the Protocol wins.
Big thanks to @haydenadams and the Foundation for the GovSwap meetups. Being able to ask questions directly really helped provide clarity on the details and gave the delegates the confidence to support this proposal.
Hey @haydenadams, this is an exciting proposal and it’s exciting to see you being the one to make it!
Can you confirm this commit, which is linked from the docs, represents the version of the protocol fee contracts you intend to deploy and go live with. We see the OZ audit reports. Were/will any additional audits performed?
Hey @haydenadams, this is an exciting proposal and it’s exciting to see you being the one to make it!
Can you confirm this commit, which is linked from the docs, represents the version of the protocol fee contracts you intend to deploy and go live with. We see the OZ audit reports. Were/will any additional audits performed?
ScopeLift looks forward to digging into the technical details of the proposal at length and sharing our analysis. I will say that my high level, gut reaction to what has been proposed is a positive one. Thanks to everyone who helped make it possible :saluting_face:
Glad to see this come to fruition, happy to vote in support here.
We support the long waited initiaves. We will vote in support for both Uniswap fee switch as well as burns 🔥