The Uniswap community is voting on the “Fee Switch Activation Proposal” from December 19–26, a decision that could mark a major milestone for the protocol’s long-term economics.
If approved, the proposal would activate fee switches on Uniswap v2 and v3 mainnets and initiate the burn of 100 million UNI tokens from the treasury after a short timelock period. This move aims to align protocol-generated fees with a sustainable token burn mechanism.
Why This Matters
The proposal, led by Uniswap Labs founder Hayden Adams alongside Ken Ng, focuses on strengthening Uniswap’s economic model by:
Connecting protocol revenue directly to UNI token value
Reducing circulating supply through on-chain burns
Reinforcing long-term ecosystem sustainability
As Adams noted, once approved and the timelock expires, fee switches will go live and begin consistently burning UNI, creating a structural shift in how value accrues within the protocol.
Market & Community Outlook
Community engagement around the vote has been strong, highlighting Uniswap’s active governance culture. Market sentiment remains cautiously optimistic, as the proposal could reshape incentives for both token holders and liquidity providers.
A 100 million UNI burn would represent a meaningful supply-side event and set a precedent for fee-driven value capture in decentralized finance.
Overall, the proposal underscores Uniswap’s push to solidify its position as a leading decentralized exchange while evolving toward a more resilient and value-aligned economic framework.
