Uniswap’s UNIfication governance proposal passed with an overwhelming margin, recording about 125 million UNI votes in favor and 742 against, clearing the required quorum and delivering a clear mandate.
The governance vote authorized a one-time removal of 100 million UNI from the protocol treasury, reducing supply by roughly 16% and imposing a sustained deflationary pressure on UNI. Simultaneously, the protocol fee switch was turned on for Uniswap v2 and for selected high-volume Uniswap v3 pools; the switch diverts a portion of trading fees to the protocol treasury.
Those captured fees will be used to fund recurring UNI burns, creating a feedback loop where protocol usage can generate buyback-like reductions in circulating supply.
The approved package permanently retires 100 million UNI from the treasury and activates a protocol fee switch on Uniswap v2 and selected high-volume v3 pools, linking fee revenue to ongoing token burns.
Market reaction to UNIswap’s decision
Market indicators reported a pronounced price response to the proposal’s introduction and passage, with UNI rising by more than 38% in the immediate aftermath. The combined effect of a large, permanent burn and an activated fee capture mechanism repositions UNI from a governance-only token toward an asset with yield-generating and deflationary characteristics. In practice, this aligns token value more directly with protocol activity: higher fee-generating volumes increase resources available for burns, which in turn can compress supply and affect investor demand.
The approved UNIfication measures enact a substantive overhaul of Uniswap’s economic design by coupling protocol fee capture to a token burn program and reducing supply materially. For stakeholders, the next focus is operational: monitoring fee revenues, the cadence of subsequent burns, and the durability of the fee-driven revenue stream as a mechanism to sustain token deflation.
Monitoring the protocol fee revenues and the schedule of subsequent UNI burns is the immediate milestone to gauge the long-term effect on UNI’s tokenomics.
