Uniswap Labs and Uniswap Foundation, two of the main firms that help steer the Uniswap protocol, are joining forces to propose a new sweeping governance proposal that would completely change the way the ecosystem works today.
The proposal, called “UNIfication,” aims to align incentives across the Uniswap ecosystem and position the protocol as the default exchange for tokenized assets. It would do this by activating protocol fees, burning millions of UNI tokens and consolidating the project’s key teams under a single growth strategy, according to a blog post dated November 11 but briefly published on November 10.
Under the proposal, which DAO members will vote on, the protocol would redirect a portion of trading fees to a UNI burn mechanism and fees from Uniswap’s layer-2 network, Unichain, would also flow into the burn.
Other features like Protocol Fee Discount Auctions (PFDA) would allow traders to bid for fee discounts, internalizing MEV (maximal extractable value) and further fueling the burn process, the team claims. In addition, Uniswap v4 would evolve into an onchain aggregator, collecting fees from external liquidity sources through new “hooks.”
Uniswap Labs also proposed a retroactive burn of 100 million UNI from the treasury, which the team claims would equal the amount that might have been burned if protocol fees had been active since launch.
The changes related to Uniswap’s tokenomics are not the only restructuring happening to the ecosystem. Uniswap Labs, which is the main developer firm that supports the Uniswap protocol, will absorb into the Uniswap Foundation’s ecosystem teams. Co-founders Hayden Adams, Devin Walsh and Ken Ng, along with Callil Capuozzo and Hart Lambur, will sit on a five-member board overseeing the new structure, the proposal said.
Uniswap Labs will also pivot away from monetizing its products, including the Uniswap interface, wallet and API, and instead focus exclusively on protocol growth. Fees on these products will be set to zero, with all future monetization tied directly to UNI holders’ interests.
“These products already drive significant organic volume for the protocol. Removing fees makes them even more competitive and brings in more high quality volume and integrations, leading to better outcomes for LPs and the entire Uniswap ecosystem,” the teams wrote in their press release.
Furthermore, the team proposes that Uniswap’s governance creates an annual growth budget of 20 million UNI, starting in 2026, distributed quarterly.
If passed, UNIfication would mark the most significant evolution of Uniswap’s governance and economics since its token launch in 2020.
Read more: Uniswap Labs Officially Launches Layer-2 ‘Unichain’
