Uniswap’s governance community has overwhelmingly approved the UNIfication proposal, a move that reshapes the protocol’s economic model and puts the UNI token on a clearly deflationary path.
The vote closed on Thursday with 99.9% support, according to Uniswap founder Hayden Adams. More than 125 million UNI tokens were cast in favor of the proposal, compared to just 742 tokens against it, highlighting near-total consensus among voters.
What UNIfication changes
At the heart of the proposal is the long-awaited protocol fee switch, first introduced by Uniswap Labs and the Uniswap Foundation in November. Until now, all trading fees on Uniswap went directly to liquidity providers. Under the new system, a portion of those fees will be redirected to the protocol itself.
Those fees will be used to continuously burn UNI tokens, gradually reducing the total supply. On top of that, net sequencer fees from Unichain will also feed into the same burn mechanism.
The result is a direct link between Uniswap’s activity and UNI’s supply: as trading volume grows, more tokens are removed from circulation.
More than just fees
UNIfication also simplifies Uniswap’s internal structure. The proposal moves responsibilities from the Uniswap Foundation into Uniswap Labs, removes fees from Labs’ interface, wallet, and API services, and introduces a recurring growth budget funded in UNI. That budget is aimed at long-term development and ecosystem expansion rather than short-term incentives.
Following approval, the proposal enters a two-day timelock. After that, Uniswap will carry out a one-time burn of 100 million UNI, representing an estimate of how much would have been burned if the fee switch had been active since UNI’s launch.
The governance package also introduces a Protocol Fee Discount Auctions system, designed to improve returns for liquidity providers while aligning Uniswap Labs, the Uniswap Foundation, and on-chain governance under a single legal structure using Wyoming’s DUNA framework.
Broad backing from DeFi leaders
The proposal received support from several prominent figures in decentralized finance, including Variant founder Jesse Walden, Synthetix and Infinex founder Kain Warwick, and former Uniswap Labs engineer Ian Lapham, all of whom hold significant voting power.
A changing regulatory backdrop
Uniswap framed the move as a response to a shifting regulatory environment. After years of pressure on DeFi under former SEC chair Gary Gensler, the protocol argues that the space has matured and gained wider acceptance, making protocol-level value capture more viable.
“I believe Uniswap can be the primary place where tokens are traded,” Adams said, adding that the proposal “sets the stage for the next decade of growth.”
As of late Thursday, UNI was trading at $5.92, up nearly 19% over the past week. Uniswap has already generated over $1.05 billion in fees this year, underlining the scale of activity now feeding into its updated economic model.
