Uniswap has officially proposed activating its long-discussed protocol fee switch and introducing a UNI buyback and burn mechanism, marking one of the most significant shifts in DeFi governance this year.
The proposal, titled “UNIfication”, comes directly from Uniswap founder Hayden Adams (@haydenzadams) and the Uniswap Foundation (@UniswapFND). It aims to turn UNI into a productive token with real cash flow while unifying the project’s governance, treasury, and ecosystem strategy.
Today, I’m incredibly excited to make my first proposal to Uniswap governance on behalf of @Uniswap alongside @devinawalsh and @nkennethk
This proposal turns on protocol fees and aligns incentives across the Uniswap ecosystem
Uniswap has been my passion and singular focus for… pic.twitter.com/Ee9bKDric5
— Hayden Adams 🦄 (@haydenzadams) November 10, 2025
The Fee Switch Is Finally Coming To Uniswap
Under the new proposal, Uniswap will activate protocol fees, splitting trading revenue between liquidity providers (LPs) and UNI holders:
- 0.25% to LPs
- 0.05% to UNI buybacks
Based on Uniswap’s historical annualized trading volumes, roughly $2.8 billion in monthly fees, this would result in $38 million worth of UNI buybacks every month, according to data tracked by DefiLlama.
That places UNI’s buyback scale in line with Pump ($PUMP) and Aster ($ASTER), which both generate between $35M–$40M monthly, though still behind Hype ($HYPE), whose buyback flow averages $80M–$100M.
.@Uniswap proposes activating its protocol fee switch and burning $UNI tokens from the treasury.
Looking at Uniswap’s past fee data, we can see where $UNI would rank among the active buyback tokens.
→ New split: 0.25% to LPs / 0.05% to UNI
→ 0.05% of ~$2.8B fees is roughly… pic.twitter.com/eUFipNlQlY— Tokenomist (@Tokenomist_ai) November 11, 2025
$UNI Surges 30% as Whales Accumulate
Following the announcement, $UNI spiked to $10, climbing more than 30% in 24 hours as market sentiment turned bullish.
On-chain data showed whales increasing their UNI holdings, betting that protocol-level burns and buybacks could shift UNI from a governance-only token to one with tangible value capture.
The move aligns Uniswap with a growing trend across DeFi, where protocols are redirecting fees from liquidity providers to tokenholders, effectively turning governance tokens into cashflow assets.
A Retroactive 100M UNI Burn
The “UNIfication” proposal also introduces a retroactive burn of 100 million UNI from the treasury, representing the amount that would have been burned if protocol fees had been activated at launch.
This symbolic burn not only reduces circulating supply but also signals a reset of Uniswap’s economic design, aligning future incentives between users, LPs, and tokenholders.
Hayden Adams: “The Next Decade of Growth”
In his announcement, Uniswap founder Hayden Adams called the proposal a “reform of governance and incentives” that positions Uniswap for long-term dominance as the global decentralized exchange for tokenized value.
“Uniswap has been my passion and singular focus for the past eight years,” Adams wrote.
“What started as a small side project is now global financial infrastructure powering thousands of applications with ~$1.8 trillion in annual trading.”
He noted that since UNI’s 2020 launch, Uniswap Labs has been largely restricted from participating in governance or directly building tokenholder value due to regulatory pressure.
That, he said, is changing.
“For the past five years, Labs has been unable to meaningfully participate in Uniswap governance,” Adams added.
“Those restrictions, shaped by a hostile regulatory environment that cost tens of millions in legal fees, are now easing. This proposal ends that chapter.”
A Comprehensive Reform Plan For Uniswap
At its core, UNIfication is more than a tokenomics update, it’s a structural overhaul of how Uniswap operates, governed, and grows.
Here’s the high-level breakdown of the proposal:
1. Activates Protocol Fees:
Turns on the long-awaited fee switch, directing 0.05% of trading volume toward UNI buybacks and burns.
2. Integrates @Unichain:
Sends sequencer fees from Unichain, Uniswap’s L2, directly into the UNI burn pool.
3. Retroactive Treasury Burn:
Burns 100M UNI from the treasury to compensate for unactivated historical protocol fees.
4. Fee Discount Auctions:
Introduces “Protocol Fee Discount Auctions” to improve LP outcomes and internalize MEV (miner extractable value) revenue back to the protocol.
5. Aggregator Hooks for v4:
Adds “aggregator hooks” in Uniswap v4, allowing it to act as an onchain aggregator that collects fees from external liquidity sources, expanding the protocol’s revenue base.
6. Labs Realignment:
Refocuses Uniswap Labs on protocol growth and adoption under a new contractual framework ensuring its initiatives align fully with Uniswap governance interests.
7. No More Interface Fees:
Labs will stop collecting interface, wallet, and API fees, effectively open-sourcing Uniswap’s access points to boost user adoption and market penetration.
8. Foundation Integration:
Moves Uniswap Foundation employees into Labs under a unified growth fund backed by the treasury, streamlining development and reducing organizational fragmentation.
9. Unisocks Migration:
Transfers governance-owned Unisocks liquidity to v4 on Unichain and burns the LP position to simplify treasury management.
Governance Gets a Makeover
Another notable feature of the proposal: delegate incentives.
Under UNIfication, active governance delegates would be compensated for participation, professionalizing Uniswap’s governance process while keeping it decentralized.
By doing so, Uniswap joins the list of protocols experimenting with “productive governance,” where tokenholders not only vote but also share in the protocol’s actual financial upside.
The reaction from the DeFi ecosystem has been sharply divided.
Some see it as a long-overdue step that finally gives UNI holders real value. Others worry that monetizing protocol fees could undermine liquidity provider incentives or draw regulatory attention.
Still, the majority agree on one thing, UNIfication is Uniswap’s boldest proposal since its inception.
For many, the plan reads like a blueprint for sustainable DeFi, blending value accrual, decentralization, and transparent governance in a single framework.
What It Means for UNI Holders
If approved by governance, the proposal could dramatically change UNI’s token economics.
At current fee levels, the buyback mechanism would remove around $38 million worth of UNI per month, roughly $450 million annually, assuming stable trading volumes.
That consistent demand, coupled with a massive retroactive burn, could turn UNI into one of DeFi’s strongest deflationary assets.
With the protocol unifying around a single growth and governance model, Uniswap aims to reposition itself as the global hub for tokenized trading, spanning both traditional crypto assets and the emerging world of onchain financial products.
“The Decade of Uniswap” Begins
As Adams summarized, UNIfication sets the stage for the next decade of Uniswap’s evolution.
It’s not just a fee switch, it’s a statement that DeFi protocols can adapt, evolve, and scale under pressure.
“I believe Uniswap can be the primary place tokens are traded,” Adams concluded.
“This proposal sets the stage for the next decade of growth.”
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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Source: https://nulltx.com/uni-jumps-30-as-uniswap-moves-to-activate-protocol-fees-with-unification/