Recently, the market has indeed been a bit cold, with local dogs flying and memes dancing wildly, but as the market cools down, everyone realizes that besides speculation, there seems to be nothing left.
The price of coins drops, hackers steal, it might as well be a bear market.
But to be honest, at times like this, we can see clearly which projects are genuinely working and building long-term value. As the noise fades, what we need is not another fancy story, but solid underlying logic that can withstand cycles.
This brings us to a veteran that has been silent for a long time but is currently undergoing fundamental changes: UNI
For a long time, UNI has been in an awkward paradox: as the unquestionable leader of DeFi, it has processed over $40 trillion in transaction volume and generates hundreds of millions in fee income each month, but all of this seems unrelated to the holders of UNI tokens. It's like a hydropower station that generates huge cash flow every day, but those who hold shares in the station receive not a penny in dividends. The market has therefore continuously priced it with the narrative of governance tokens, and its value has been suppressed for a long time.
However, all of this is being fundamentally changed by the UNIfication proposal. In my view, this is not only the biggest transformation since Uniswap's inception but also a hard fork of the underlying logic of UNI's value.
In simple terms, it finally allows UNI to directly benefit from the success of the protocol:
Activate the 'fee switch': a portion of the transaction fees (e.g., 0.05%) will belong to the protocol treasury, rather than all going to liquidity providers. This money will be used to buy back and permanently burn UNI from the market.
One-time retrospective burn: To compensate holders for the fees they have not enjoyed in the past, the protocol proposes to directly burn 100,000,000 UNI from the treasury, which accounts for about 16% of the circulating supply.
Full ecosystem value capture: Not only mainnet transactions but also the fee income from its Layer 2 network Unichain, as well as the protocol fee discount auction (PFDA) income aimed at capturing MEV value, will all flow into the same burn mechanism.
In the future, the more Uniswap is used, the more active the trading, the more UNI will be burned, and the scarcer it will become. It is transforming from a governance tool with no cash flow into a truly productive asset with a deflationary mechanism and cash flow expectations.
This addresses the fundamental issue that has long plagued its valuation.
Moreover, the team has not been idle technically. In the face of the challenges of fragmented liquidity in a multi-chain ecosystem, they launched innovative solutions like Compact v1, aimed at achieving seamless and secure cross-chain atomic swaps, preparing to capture broader on-chain liquidity. At the same time, positive signals have also emerged on the regulatory front, as the U.S. SEC has concluded its investigation into Uniswap Labs, clearing a significant obstacle for the protocol's compliant development.
So, when the underlying logic of value capture changes, how should the market reassess it?
Estimate using a more traditional cash flow discount model. Based on its massive trading volume, even if only 10% of the fees are allocated to the protocol for burn, its theoretical value is significantly higher than the current market value under relatively conservative valuation multiples.
This means that the market may still be pricing it using the old 'no-dividend' narrative, while ignoring the fundamental changes that are happening.
The noise of the cryptocurrency world will eventually pass, but projects like Uniswap, which continuously build technology and ultimately bind the enormous economic value created by the protocol to token holders, possess the foundation to survive bull and bear markets. UNIfication is the most powerful proof of value it has written for itself.
I no longer see it merely as a trading tool, but rather as a core DeFi asset undergoing a value reassessment with cash flow potential.
Pay attention early and understand the significance of this transformation!
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