Uniswap Labs and the Uniswap Foundation have announced a collaborative initiative to launch a transformative governance proposal named “UNIfication.” This ambitious plan is set to significantly overhaul the current operational framework of the Uniswap ecosystem. The proposal aims to better align incentives within the platform and elevate Uniswap to the status of the default exchange for tokenized assets.
The UNIfication proposal entails a multifaceted strategy that will activate protocol fees, implement a substantial token burn of millions of UNI tokens, and consolidate the leading teams within the Uniswap ecosystem under a unified growth strategy. The details of this initiative were briefly shared in a blog post dated November 11, which appeared briefly on November 10.
A key aspect of the proposal is the redirection of a portion of trading fees into a UNI burn mechanism, augmented by the incorporation of fees from Uniswap’s layer-2 network, Unichain. Additional features like Protocol Fee Discount Auctions (PFDA) will allow traders to bid on fee discounts, thereby internalizing maximal extractable value (MEV) and contributing further to the burn mechanism.
Uniswap v4 is expected to evolve into an on-chain aggregator that will gather fees from external liquidity sources through the introduction of new “hooks.” Moreover, Uniswap Labs has suggested a retroactive burn of 100 million UNI tokens from the treasury. This move is intended to match the volume of tokens that would have been burned had protocol fees been active from the inception of the platform.
The restructuring of Uniswap’s tokenomics is complemented by a broader reorganization within the ecosystem. Uniswap Labs will take charge by integrating teams from the Uniswap Foundation, streamlining its operations under a five-member board composed of co-founders Hayden Adams, Devin Walsh, Ken Ng, alongside Callil Capuozzo and Hart Lambur. This board will oversee the new framework aimed at enhancing operational efficiency.
Additionally, Uniswap Labs plans to halt the monetization of its various products—including the Uniswap interface, wallet, and API—to concentrate solely on the growth of the protocol. Fees associated with these products will be eliminated, aligning future monetization efforts with the interests of UNI holders. The initiative is aimed at enhancing competitiveness and driving higher-quality volume and integrations, which, according to the team, will benefit liquidity providers and the overall Uniswap ecosystem.
As a further initiative, the proposal calls for the establishment of an annual growth budget of 20 million UNI from Uniswap’s governance, starting in 2026, with funds distributed quarterly.
If adopted, UNIfication is poised to become the most significant change in Uniswap’s governance and economic structure since the token’s launch in 2020, marking a pivotal moment for the protocol and its stakeholders.
