Uniswap Votes to Activate Fee Switch on 8 Layer 2 Networks
Uniswap tokenholders voted Thursday on expanding the fee switch to eight layer 2 blockchains including Base and Arbitrum. The protocol has burned almost 100 million UNI since the mechanism launched in late December.
Key Takeaway
Fee switch expansion to eight L2s could multiply Uniswap's revenue as Base alone paid ₱3.17 billion ($55 million) this year.
Uniswap tokenholders began voting Thursday to activate the fee switch across eight layer 2 blockchains and expand it on Ethereum mainnet. The proposals target Base, Arbitrum, OP Mainnet, World Chain, X Layer, Celo, Soneium, and Zora, plus all remaining v3 pools on Ethereum.
UNI price climbed 9% over the past week to $3.74 as of Friday afternoon New York time. Bitcoin fell 3.5% and Ethereum dropped 2.4% during the same period. The token has lost 59% since the UNIfication proposal introduced the fee switch in November.
The fee switch directs at least one-sixth of fees from liquidity providers to a token jar. UNI holders burn tokens to claim those protocol-generated fees, which theoretically reduces supply and boosts value. The protocol has burned almost 100 million UNI since the mechanism launched.
Uniswap founder Hayden Adams said the initial rollout went very well, with market adjusted user deposits up and burn working efficiently. The fee switch generated ₱190.47 million ($3.3 million) in cumulative revenue since late December on v2 and the largest v3 pools on Ethereum, according to DefiLlama data.
Base has paid Uniswap ₱3.17 billion ($55 million) in fees across all four versions since January 1. Ethereum has paid ₱2.14 billion ($37 million) during the same period. The decentralized exchange processed more than ₱3.98 trillion ($69 billion) in transaction volume over the past month and more than ₱98.12 billion ($1.7 billion) in the past 24 hours.
The UNIfication proposal also approved development of a new liquidity provider earnings mechanism, disbandment of the Uniswap Foundation, and an end to Uniswap Labs collecting additional fees from interfaces. The final pair of votes ends March 4.
This article was written based on reporting from Dlnews.
