The majority of the Uniswap community has voted in favor of “UNIfication,” a governance proposal that will reshape the protocol’s tokenomics and introduce a new system for burning UNI tokens using revenue collected from trading fees.
Summary
- Over 69 million UNI votes have backed the UNIfication proposal.
- A two-day time lock will follow before protocol fees are activated and automated UNI burns begin.
- 100 million UNI tokens will be burnt from the protocol’s treasury.
As of presstime, the proposal has over 69 million votes in favor of the sweeping tokenomics overhaul, much higher than the 40 million vote threshold that was required for the measure to pass. The Uniswap community had been eagerly anticipating the vote, and the quorum was met less than three days after voting opened on Dec. 20. The process is set to close on Dec. 25.
With such a strong majority in favor, the proposal is expected to go live after a mandatory two-day timelock period, following which the protocol fee switch would be enabled on the Unichain mainnet and subsequently rolled out across supported pools.
At its core, the UNIfication proposal aims to tighten UNI’s long-term supply by setting up an automated system that uses protocol earnings to regularly buy back and burn tokens.
A total of 100 million UNI from the treasury would be removed from circulation to account for the tokens that “would have been burned if fees were on from the beginning,” the proposal notes.
At the same time, the proposal would roll out a new incentive system called Protocol Fee Discount Auctions, which is expected to help liquidity providers earn more from their trades.
The proposal will also introduce several structural changes by transferring the responsibilities of the Uniswap Foundation to Uniswap Labs. Furthermore, a growth budget of 20 million UNI per year will be established to support development, integrations, and partnerships.
UNI price has risen over 25% since voting for the UNification proposal opened earlier this week.
As previously reported by crypto.news, retail buying activity, as well as increased demand from large token holders, has helped support the recent price gains.
However, the token faced some headwinds over the past few days in response to the ongoing crypto market downturn that has seen leading cryptocurrencies plunge below key levels. When writing, UNI was trading at $6.17 according to CoinGecko, down 1.3% in the past 24 hours.
