- The UNI token surged after the “UNIfication” tokenomics upgrade was announced, which is intended to increase investor attractiveness through token burns.
- Following the news, UNI rose 38.5 percent to reach $9.70.
The Uniswap Foundation and Uniswap Labs have put forward a proposal that will change the tokenomics of the protocol. The proposal is called “
UNIfication“The proposal aims to strengthen Uniswap’s position as a
leading to strengthen decentralized exchanges and make UNI more attractive to long-term investors.
The initial proposal from Uniswap founder Hayden Adams and co-applicants Devin Walsh and Kenneth Ng focuses on three main areas, including reducing supply, improving rewards for liquidity providers (LPs), and encouraging protocol development.
Additionally, Uniswap plans to activate a protocol-level fee mechanism that will burn UNI tokens. This move effectively removes tokens from circulation, which could increase UNI’s scarcity and long-term market value.
Token burns and fee discount auctions for UNI promotion
The foundation, created in 2022, has announced plans to burn about 16% of its circulating supply, equivalent to 100 million UNI from the project’s treasury. This burning is intended to strengthen the market value of UNI. In addition, the proposal envisages the introduction of a system of discount auctions with protocol fees, allowing liquidity providers to benefit from reduced fees and higher yields.
The Uniswap Foundation said that the initiative aims to establish Uniswap as “the standard decentralized exchange for tokenized assets” Notably, the protocol has already processed over $4 trillion in cumulative trading volume since its launch in November 2018, cementing its dominance in the DEX sector.
Additionally, under the proposal, Unichain will pass fees to the UNI burn mechanism. Unichain, Uniswap’s Ethereum Layer 2 network, has generated $7.5 million in annual fees since its launch nine months ago.
Six billion dollar increase and new growth strategy
Following the announcement, UNI’s market capitalization rose to over $6 billion, making it the 34th largest cryptocurrency by market value. Uniswap’s native token is up over 20% in the last 24 hours 9. This sharp rise has given UNI’s market price a much-needed boost.
The proposal also included grants and incentives for developers, researchers and builders of decentralized financial systems. This comes as Uniswap develops a Uniswap growth budget that would allocate 20 million UNI tokens every quarter.
The foundation said this funding will play an important role in driving innovation and attracting more activity to the Uniswap ecosystem.
Analysts see the UNification proposal as a bold move to revitalize the utility and attractiveness of UNI for investors. By incorporating deflationary mechanisms, rewarding LPs, and supporting community-driven development, Uniswap appears poised to cement its place as a cornerstone DeFi platform.
Like on-chain analyst Ki Young Ju on X stated Uniswap Refocuses on Sustainable Tokenomics; and real value creation could set the tone for the next wave of DeFi growth.
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