Uniswap Fee Switch Proposal Hits Quorum With 40M UNI Votes

The Uniswap governance proposal known as UNIfication has crossed a key milestone. On-chain data showed the proposal surpassed the required quorum of 40 million UNI votes. At the time of reporting, more than 69 million UNI voted in favor. While opposition remained negligible, below 1,000 UNI. The vote remains active until December 25. However, the quorum threshold is already met, placing the proposal on track for approval unless a major voting reversal occurs.

Governance Vote Shows Strong Token Holder Support

Voting activity shows heavy participation from large wallets. Several addresses cast votes ranging from 8 million to nearly 15 million UNI each. This concentration pushed the proposal past quorum quickly. Meanwhile, governance dashboards show the “for” votes dominating from the early stages.

The low number of opposing votes suggests broad alignment among UNI holders. As a result, the proposal now enters its final phase before execution. If approved, the changes would mark the most significant shift in Uniswap’s token economics since UNI launched.

Protocol Fees and UNI Burn Mechanism Explained

At the core of the proposal is the long-awaited protocol fee switch. Once activated, Uniswap would begin collecting a small portion of swap fees at the protocol level. For Uniswap v2, liquidity provider fees would drop from 0.30% to 0.25%. The remaining 0.05% would go to the protocol. For Uniswap v3, protocol fees would vary by pool and remain adjustable through governance.

All protocol fees would flow into a dedicated on-chain system. Fees accumulate in a contract and can only be withdrawn when UNI is burned. This directly links protocol usage to token supply reduction. In addition, the proposal includes a one-time burn of 100 million UNI from the treasury. The team aims this burn to account for fees they could have collected during Uniswap’s early growth years.

Unichain Fees and MEV Capture Added to Burn Plan

The proposal also expands the burn mechanism beyond swaps. Unichain sequencer fees would feed into the same UNI burn process, after required costs and Optimism’s share. Another component focuses on MEV capture. A new auction system would allow traders to bid for temporary protocol fee discounts. Winning bids would burn UNI. Early estimates suggest this could improve liquidity provider returns while reducing value leakage to validators. Together, these mechanisms aim to align incentives across traders, liquidity providers, and token holders.

What Changes If the Proposal Passes

If the vote passes, Uniswap Labs would shift focus fully to protocol growth. Interface, wallet and API fees would be set to zero. Development teams from the Uniswap Foundation would move under Labs, while governance oversight remains with UNI holders. The protocol would also create an annual growth budget of 20 million UNI to fund development and ecosystem expansion starting in 2026. In short, the proposal ties Uniswap’s long-term growth directly to UNI’s supply dynamics. With quorum reached and support strong, the final outcome now depends on the remaining voting window.