100M UNI burned, fee switch activated — so why did the price drop instead of pump?
Uniswap’s governance proposal UNIndication has passed with an overwhelming 98.82% approval. The decision triggers an immediate burn of 100 million UNI (around 10% of total supply) and officially turns on the fee switch, allowing UNI holders to receive a share of protocol revenue. This move is widely seen as a long-overdue breakthrough in fixing UNI’s value capture problem.
Yet the market reacted the opposite way.
Instead of rallying, UNI’s price pulled back after the announcement. The main reason is a classic “sell the news” reaction, as short-term capital rushed to take profits once the long-anticipated catalyst materialized. UNI is already down roughly 64% from its February high, reflecting cautious sentiment across the market.
Community sentiment is mixed.
Long-term supporters argue that protocol revenue sharing and a massive token burn significantly strengthen UNI’s deflationary and value accrual narrative. On the other hand, concerns have emerged around reduced returns for liquidity providers, which could pressure liquidity in the short term. Additional criticism around team compensation versus delivered value has also resurfaced.
Bottom line:
Structurally, the fee switch is a major positive for UNI’s long-term fundamentals. But in the short term, fears of liquidity outflows, macro headwinds, and profit-taking have outweighed the bullish narrative — leading to a price pullback despite objectively good news.
$UNI
