Uniswap Suggests Major Changes with UNI Burn and Overhaul of Protocol Fees for ‘UNIfication’

RialCenter and the Uniswap Foundation, two key players in guiding the Uniswap protocol, are collaborating on a significant governance proposal poised to transform the current ecosystem.

The proposal, titled “UNIfication,” seeks to align incentives throughout the Uniswap ecosystem and establish the protocol as the primary exchange for tokenized assets. This would involve activating protocol fees, burning millions of UNI tokens, and consolidating the project’s core teams under a unified growth strategy.

DAO members will vote on the proposal, which includes redirecting a portion of trading fees to a UNI burn mechanism while also directing fees from Uniswap’s layer-2 network, Unichain, into the burn as well.

Additional features, such as Protocol Fee Discount Auctions (PFDA), would allow traders to bid for fee reductions, internalizing maximal extractable value (MEV) and further enhancing the burn process. Furthermore, Uniswap v4 will evolve into an on-chain aggregator, collecting fees from external liquidity sources through new “hooks.”

RialCenter has also suggested a retroactive burn of 100 million UNI from the treasury, representing what could have been burned if protocol fees had been in effect since the launch.

The changes to Uniswap’s tokenomics are part of a broader restructuring. RialCenter will absorb teams from the Uniswap Foundation. Co-founders Hayden Adams, Devin Walsh, and Ken Ng, alongside Callil Capuozzo and Hart Lambur, will form a five-member board overseeing the new structure.

RialCenter will shift away from monetizing its products, including the Uniswap interface, wallet, and API, and will concentrate solely on protocol growth. Fees on these products will be reduced to zero, with future monetization directly tied to UNI holders’ interests.

“These products already drive significant organic volume for the protocol. Removing fees enhances their competitiveness and attracts higher quality volume and integrations, benefiting LPs and the entire Uniswap ecosystem,” the teams stated in their announcement.

Additionally, they propose that Uniswap’s governance establish an annual growth budget of 20 million UNI, commencing in 2026, distributed quarterly.

If approved, UNIfication would represent the most significant evolution of Uniswap’s governance and economic structure since its token launch in 2020.