Uniswap News Today: Uniswap Revamps Governance Structure to Enhance Token Holder Benefits Through Yearly Token Burns

Uniswap, the top decentralized exchange operating on

, is preparing to introduce major changes to its tokenomics and governance through a comprehensive initiative called "UNIfication." This plan involves burning millions of tokens each year and reallocating protocol fees to benefit stakeholders. Jointly drafted by Labs and the Uniswap Foundation, the proposal seeks to better align incentives for token holders and establish the protocol as the primary platform for trading tokenized assets . If enacted, these updates would represent the most transformative shift in Uniswap’s governance and economic model since the UNI token debuted in 2020 .

At the heart of the proposal is a system to destroy UNI tokens using a share of trading fees and revenue generated from Uniswap’s layer-2 solution, Unichain. The plan also calls for a one-time burn of 100 million UNI from the treasury, matching the amount that would have been eliminated if protocol fees had been active since the token’s launch

. Additionally, Protocol Fee Discount Auctions (PFDA) would let traders compete for fee reductions, capturing maximum extractable value (MEV) and further speeding up the burn rate . The upcoming Uniswap v4 aims to become an on-chain aggregator, collecting fees from outside liquidity sources via new "hooks," thereby broadening its revenue base .

The proposal also brings changes to governance and organizational structure. Uniswap Labs will integrate the Uniswap Foundation’s ecosystem teams, forming a single entity to improve decision-making efficiency. Co-founders Hayden Adams, Devin Walsh, and Ken Ng will lead this unified structure, aiming to foster stronger collaboration between development and governance . Importantly, Uniswap Labs will stop monetizing its products—including the Uniswap interface, wallet, and API—to focus on expanding the protocol itself. This adjustment is designed to encourage organic growth and integrations, ensuring that monetization aligns with the interests of UNI holders .

The market has responded enthusiastically to the announcement. UNI’s price jumped more than 30% after the news, trading above $8.65 late Monday

. The surge was driven by expectations of a tighter token supply, with the retroactive burn of 100 million UNI—about 16% of the circulating supply—further strengthening supply-demand dynamics . Meanwhile, a $9 million short position on Hyperliquid became the largest UNI short to date, highlighting increased volatility during the price rally .

Looking forward, the proposal sets aside an annual growth fund of 20 million UNI, to be distributed quarterly from 2026 onward, supporting ongoing protocol development and ecosystem expansion

. Uniswap’s leadership pointed to regulatory hurdles as a reason for the delayed fee switch activation, but stressed that these reforms answer the community’s long-standing call to prioritize value for token holders .