Uniswap Burns 100 Million UNI Tokens Worth $596 Million Following Governance Approval

TLDR:

• Uniswap burned 100 million UNI tokens worth $596 million from treasury at 4:30 AM following proposal.
• Protocol activated fees on version 2 and select version 3 pools while setting Labs interface fees to zero.
• UNI price increased 7.66% to $6.39 with trading volume reaching $430 million in the past 24 hours.
• Future fee sources from Layer 2 networks and version 4 will require separate governance proposals over time.

Uniswap completed a historic burn of 100 million UNI tokens from its treasury early this morning. The burn, valued at approximately $596 million, took place at 4:30 AM following governance approval. 

This marks the first major token burn in the protocol’s history. The transaction was recorded on Ethereum blockchain and represents a major shift in Uniswap’s tokenomics. 

Labs interface fees have been set to zero while protocol fees are now active on version 2 and select version 3 pools on mainnet.

Protocol Fee Implementation and Burn Mechanism

The burn follows the recent passage of a governance proposal that restructured Uniswap’s fee model. 

Crypto analyst EmberCN reported the milestone event, stating that “100 million UNI ($596 million) was burned from the Uniswap treasury at 4:30 a.m. this morning.” The transaction was verified on Etherscan, providing complete transparency to the community.

Uniswap Labs confirmed the execution through its official account with a detailed announcement. 

The company stated: “UNIfication has officially been executed onchain. Labs interface fees are set to zero. 100M UNI has been burned from the treasury. Fees are on for v2 and a set of v3 pools on mainnet. Unichain fees flow to UNI burn (after OP & L1 data costs).” 

The protocol activated fees on legacy version 2 pools and selected high-volume version 3 pools on Ethereum mainnet.

The company outlined plans for expanding the burn mechanism beyond current implementations. 

Uniswap Labs added that “future fee sources like protocol fees on L2s, v4, UniswapX, PFDA, and aggregator hooks will be proposed over time via separate governance proposals.” 

This gradual approach ensures community oversight of each revenue stream before activation. EmberCN noted that “subsequent fees collected by Uniswap will also be used for UNI burns” according to the approved proposal.

Market Response and Token Metrics

The UNI token traded at $6.39 at the time of reporting, reflecting a 7.66% increase over 24 hours. 

Trading volume reached $430 million in the same period, showing heightened market activity. 

The token also gained 4.25% over the previous seven days as traders responded to the burn news.

CoinGecko data reveals that UNI maintains a circulating supply of 630 million tokens after the burn.

 Market capitalization stands at $4.02 billion, placing the token as the 34th largest cryptocurrency by valuation. Daily trading volume registered at $398.88 million across exchanges.

However, broader market conditions remain challenging for the token. Supply inflation sits at 21.63% while volatility measures 5.96% according to market data. 

The Fear and Greed Index indicates extreme fear among market participants. UNI has declined 53% year-to-date and trades below its 200-day simple moving average. 

The token recorded only 14 profitable days in the past month, reflecting persistent selling pressure despite the burn announcement.

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