New Uniswap Swap Fees Rile Crypto Community, UNI Falls Back

Leading decentralized exchange Uniswap has attracted the ire of the crypto community by introducing swap fees. Moreover, the new fee is in addition to the protocol fee managed by governance voters. 

On October 17, Uniswap founder Hayden Adams said starting on October 18, “We will charge a 0.15% swap fee on certain tokens in our web app and wallet.”

Uniswap Slaps Fees on 11 Assets 

He said that it is Uniswap Labs’ first and one of the lowest interface fees in the industry. 

He added that the new revenue stream will go towards allowing Uniswap to,

“Continue to research, develop, build, ship, improve, and expand crypto and DeFi.”

According to the announcement, 11 assets will be subject to swap fees. These include ETH, USDC, WETH, USDT, DAI, WBTC, agEUR, GUSD, LUSD, EUROC, XSGD.

Moreover, fees are only collected on swaps where both input and output tokens are subject to fees. 

Adams pointed out that there have been several releases this year alone. These include an iOS wallet, Android wallet, UniswapX, major improvements to the web app, Permit2, and Uniswap v4 draft codebase.

The DeFi DEX joins the likes of popular crypto wallet MetaMask which also charges swap fees in addition to hefty spreads. However, Uniswap fees are much lower than MetaMask’s 0.875%, which can sting on larger trades. 

Nevertheless, there was quite a reaction from the crypto community, with “Autism Capital” commenting:

“Uniswap introduces a 0.15% fee to use their front-end UX that goes directly into their pockets — absolutely neglecting all the holders of their useless “governance token” UNI that *still* hasn’t turned on a fee switch to provide one scrap of value to those tricked into buying it.”

Crypto YouTuber “yourfriendSOMMI” concurred that the move neglected UNI holders. He also said that Uniswap was introducing KYC (know-your-customer) measures, but BeInCrypto could not independently confirm this. 

Crypto investor Scott Melker said the introduction of a KYC hook in Uniswap V4 has triggered debates about the future of DeFi:

“This tool allows for KYC verification for users wanting to trade on a pool, and it’s optional for developers to implement.”

UNI Price Reaction 

Uniswap’s native token has been battered in this bear market. This is a further disappointment to holders who now have to pay to swap tokens on the DEX. 

UNI has dropped around 1% on the day, so it appears that the swap fee announcement had no real impact.

At the time of writing, the DEX token was trading at $4.10, following a 9% decline over the past fortnight.

UNI has been down-trending for the past year and has lost a painful 91% since its May 2021 all-time high of $44.92.