After carrying out one of the largest token burns, @Uniswap has entered a new chapter in its history

A few days ago, the protocol permanently removed 100 million UNI tokens from circulation.

𝘈𝘵 𝘵𝘩𝘦 𝘵𝘪𝘮𝘦 𝘰𝘧 𝘵𝘩𝘦 𝘣𝘶𝘳𝘯, 𝘵𝘩𝘦𝘴𝘦 𝘵𝘰𝘬𝘦𝘯𝘴 𝘸𝘦𝘳𝘦 𝘸𝘰𝘳𝘵𝘩 𝘢𝘣𝘰𝘶𝘵 $596 𝘮𝘪𝘭𝘭𝘪𝘰𝘯.
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𝐀𝐛𝐨𝐮𝐭 𝐓𝐡𝐞 𝐁𝐮𝐫𝐧

This event is after the approval of a governance proposal (UNIfication), which passed with near total support from the community.

Almost 99% of votes were in favor, showing very strong agreement among UNI holders. The burn is the first major reduction of UNI supply in Uniswap’s history.

𝘛𝘩𝘦 𝘵𝘳𝘢𝘯𝘴𝘢𝘤𝘵𝘪𝘰𝘯 𝘸𝘢𝘴 𝘦𝘹𝘦𝘤𝘶𝘵𝘦𝘥 𝘰𝘯 𝘌𝘵𝘩𝘦𝘳𝘦𝘶𝘮 𝘢𝘯𝘥 𝘤𝘢𝘯 𝘣𝘦 𝘱𝘶𝘣𝘭𝘪𝘤𝘭𝘺 𝘷𝘦𝘳𝘪𝘧𝘪𝘦𝘥. 𝘉𝘺 𝘣𝘶𝘳𝘯𝘪𝘯𝘨 𝘴𝘶𝘤𝘩 𝘢 𝘭𝘢𝘳𝘨𝘦 𝘢𝘮𝘰𝘶𝘯𝘵 𝘰𝘧 𝘵𝘰𝘬𝘦𝘯𝘴 𝘧𝘳𝘰𝘮 𝘪𝘵𝘴 𝘵𝘳𝘦𝘢𝘴𝘶𝘳𝘺, 𝘜𝘯𝘪𝘴𝘸𝘢𝘱 𝘴𝘦𝘯𝘵 𝘢 𝘴𝘪𝘨𝘯𝘢𝘭 𝘵𝘩𝘢𝘵 𝘪𝘵'𝘴 𝘴𝘦𝘳𝘪𝘰𝘶𝘴 𝘢𝘣𝘰𝘶𝘵 𝘤𝘩𝘢𝘯𝘨𝘪𝘯𝘨 𝘩𝘰𝘸 𝘷𝘢𝘭𝘶𝘦 𝘪𝘴 𝘤𝘳𝘦𝘢𝘵𝘦𝘥 𝘢𝘯𝘥 𝘴𝘩𝘢𝘳𝘦𝘥 𝘢𝘤𝘳𝘰𝘴𝘴 𝘪𝘵𝘴 𝘦𝘤𝘰𝘴𝘺𝘴𝘵𝘦𝘮.

Instead of allowing supply to remain unchanged, the protocol is now actively managing it.
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𝐌𝐚𝐫𝐤𝐞𝐭 𝐑𝐞𝐚𝐜𝐭𝐢𝐨𝐧

When voting began in late December, UNI prices rose sharply as traders and long term holders reacted to the proposal. After the burn was completed, the price continued to rise, and trading activity increased across major exchanges.

This response showed that many holders saw the burn and the new economic model as a positive step for the future of UNI. The burn is part of Uniswap’s broader change to structure and governance design.

Uniswap Labs confirmed that all interface fees charged by the Labs front end have been set to zero. This means users interacting with the Uniswap interface aren’t longer paying extra fees to Uniswap Labs.

𝘈𝘵 𝘵𝘩𝘦 𝘴𝘢𝘮𝘦 𝘵𝘪𝘮𝘦, 𝘱𝘳𝘰𝘵𝘰𝘤𝘰𝘭 𝘧𝘦𝘦𝘴 𝘩𝘢𝘷𝘦 𝘣𝘦𝘦𝘯 𝘢𝘤𝘵𝘪𝘷𝘢𝘵𝘦𝘥 𝘢𝘵 𝘵𝘩𝘦 𝘯𝘦𝘵𝘸𝘰𝘳𝘬 𝘭𝘦𝘷𝘦𝘭. 𝘛𝘩𝘦𝘴𝘦 𝘧𝘦𝘦𝘴 𝘢𝘱𝘱𝘭𝘺 𝘵𝘰 𝘜𝘯𝘪𝘴𝘸𝘢𝘱 𝘝2 𝘢𝘯𝘥 𝘵𝘰 𝘴𝘦𝘭𝘦𝘤𝘵𝘦𝘥 𝘱𝘰𝘰𝘭𝘴 𝘰𝘯 𝘝3 𝘰𝘯 𝘌𝘵𝘩𝘦𝘳𝘦𝘶𝘮 𝘮𝘢𝘪𝘯𝘯𝘦𝘵.

Also, the value is captured away from interfaces and toward the protocol itself. Instead of revenue being collected through front end fees, the protocol now earns fees directly from trading activity.

𝘛𝘩𝘦𝘴𝘦 𝘧𝘦𝘦𝘴 𝘢𝘳𝘦 𝘵𝘩𝘦𝘯 𝘶𝘴𝘦𝘥 𝘵𝘰 𝘴𝘶𝘱𝘱𝘰𝘳𝘵 𝘜𝘕𝘐 𝘵𝘩𝘳𝘰𝘶𝘨𝘩 𝘢 𝘣𝘶𝘳𝘯 𝘮𝘦𝘤𝘩𝘢𝘯𝘪𝘴𝘮. 𝘔𝘰𝘳𝘦 𝘶𝘴𝘢𝘨𝘦 𝘰𝘧 𝘜𝘯𝘪𝘴𝘸𝘢𝘱 𝘤𝘢𝘯 𝘯𝘰𝘸 𝘭𝘦𝘢𝘥 𝘵𝘰 𝘮𝘰𝘳𝘦 𝘜𝘕𝘐 𝘣𝘦𝘪𝘯𝘨 𝘳𝘦𝘮𝘰𝘷𝘦𝘥 𝘧𝘳𝘰𝘮 𝘤𝘪𝘳𝘤𝘶𝘭𝘢𝘵𝘪𝘰𝘯 𝘰𝘷𝘦𝘳 𝘵𝘪𝘮𝘦.
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𝐕2 𝐚𝐧𝐝 𝐕3

Uniswap V2 and V3 handle fees in different ways.

➢ On V2, protocol fees apply evenly across all pools. A small portion of the fees that previously went entirely to liquidity providers is now redirected to the protocol. This redirected amount is used to fund UNI burns.

➢ On V3, governance has more control. Fees can be adjusted pool by pool, depending on the risk level and fee tier of each pool. This allows the system to remain flexible while still supporting the long term goal of reducing supply.

Another key part of the new model involves @Unichain.

Fees generated on Unichain will now contribute to ongoing UNI burns after certain costs are paid. These costs include Optimism related expenses and Ethereum Layer one data costs.

Once those are covered, the remaining value flows into the burn mechanism. Uniswap Labs has also made it clear that the current setup is only the beginning. Additional sources of protocol fees are expected to be proposed in the future through separate governance votes.

These may include fees from L2 networks, future protocol versions, and other Uniswap related products. Each new fee source will require community approval, ensuring that UNI holders continue to guide how value is captured and used.

At the same time, Uniswap has taken steps to ensure that growth and development aren’t slowed by the burn.

𝘛𝘩𝘦 𝘜𝘯𝘪𝘴𝘸𝘢𝘱 𝘍𝘰𝘶𝘯𝘥𝘢𝘵𝘪𝘰𝘯 𝘢𝘯𝘯𝘰𝘶𝘯𝘤𝘦𝘥 𝘢 𝘎𝘳𝘰𝘸𝘵𝘩 𝘉𝘶𝘥𝘨𝘦𝘵 𝘰𝘧 20 𝘮𝘪𝘭𝘭𝘪𝘰𝘯 𝘜𝘕𝘐 𝘥𝘦𝘥𝘪𝘤𝘢𝘵𝘦𝘥 𝘵𝘰 𝘴𝘶𝘱𝘱𝘰𝘳𝘵𝘪𝘯𝘨 𝘥𝘦𝘷𝘦𝘭𝘰𝘱𝘦𝘳𝘴 𝘢𝘯𝘥 𝘦𝘤𝘰𝘴𝘺𝘴𝘵𝘦𝘮 𝘱𝘳𝘰𝘫𝘦𝘤𝘵𝘴. 𝘛𝘩𝘪𝘴 𝘣𝘶𝘥𝘨𝘦𝘵 𝘪𝘴 𝘴𝘦𝘱𝘢𝘳𝘢𝘵𝘦 𝘧𝘳𝘰𝘮 𝘵𝘩𝘦 𝘣𝘶𝘳𝘯𝘦𝘥 𝘵𝘰𝘬𝘦𝘯𝘴.

Overall, the execution of UNIfication represents a change for Uniswap. The protocol is moving toward a deflationary model where value generated by trading activity can directly reduce token supply. Governance now plays a stronger role, and protocol usage is more closely tied to UNI value.