Uniswap eyes governance shift with new fee switch proposal

In an X post, Uniswap CEO Hayden Adams announced the plan was jointly proposed by Uniswap Labs and the Uniswap Foundation to turn on protocol fees and align incentives across the Uniswap ecosystem. 

The proposal includes a one-time retroactive burn of 100 million UNI tokens from the Uniswap treasury, which represents the protocol fees that could have been burned if fees were turned on at token launch. 

Hayden noted that the proposal aims to drive protocol growth and adoption, while pursuing e initiatives that align with Uniswap governance interests. “As part of this, Labs will stop collecting fees on its interface, wallet, and API to supercharge distribution and adoption of the Uniswap protocol,” Hayden noted. 

The proposal moves the Uniswap DAO’s Unisocks liquidity pool (currently on an older version, likely v2/v3 on Ethereum) to a new v4 pool on Unichain, Uniswap’s L2, to capitalize on its efficiency and volume. Uniswap’s v4 upgrade went live in January 2025 with new features and capabilities. 

Under the rollout described by Uniswap, v2 pools would move from a 0.30% liquidity-provider fee to 0.25% for LPs plus a 0.05% protocol fee once activated, applied across all v2 pools. For v3 on Ethereum mainnet, protocol fees would initially be set per pool: one-quarter of LP fees for 0.01% and 0.05% tiers, and one-sixth for 0.30% and 1% tiers, with future votes able to adjust parameters. Governance votes on fee settings would skip the usual request-for-comment step and go straight to Snapshot and then on-chain voting.

Uniswap’s native token UNI rose after the proposal. At the time of writing, UNI trades at $9.18, up 37% in the last 24 hours, with a market cap of over $5.7 billion.