This DeFi Token Surged 60% Following New Governance Proposal To Reward Token Holders 

The native token (UNI) of the decentralized exchange Uniswap experienced a remarkable surge, reaching highs of $12.20 on major exchanges. This surge, surpassing 60%, resulted from the Uniswap Foundation introducing a highly anticipated governance proposal to upgrade the protocol’s governance system.

Uniswap’s New Governance Proposal

On Friday, February 23, 2024, Erin Koen, Uniswap Foundation’s governance lead, submitted a groundbreaking proposal designed to overhaul Uniswap’s governance system. At the core of this proposal lies a strategic improvement to the protocol’s fee mechanism.

The proposal’s primary objective is to encourage a more active and responsible delegate community by aligning rewards with governance participation. This significant step is intended to fortify the protocol’s long-term sustainability and foster continuous growth.

Koen see Uniswap governance model lasting for decades, making its role as a crucial part of internet liquidity. Moreover, these proposal shows a commitment to improving the delegate experience.

Koen stated, “

Specifically, I believe we should upgrade the protocol so that its fee mechanism rewards UNI token holders that have staked and delegated their tokens.”

He further highlighted that approval from the community would make Uniswap’s governance more robust and decentralized.

Shift in Governance Approach

However, this proposal is quite different from what was tried last year. Back then, they wanted to reward token holders with fees earned.

Later in June, the Uniswap community rejected a proposal to activate fees for many liquidity pools, distributing a portion of the revenue among token holders. Meanwhile, in October, the exchange implemented a 0.15% fee on swaps involving ETH, USDC, and other tokens on the platform.

Market Response

Following the positive developments, UNI experienced a surge, reaching $12, marking an impressive 60% increase over the past 24 hours. This price level represents the highest since April 2022, significantly outperforming the relatively stable price action of bitcoin (BTC).