Uniswap Activates Fee Switch, Burns 100 Million UNI Tokens

Uniswap Labs, led by founder Hayden Adams, officially reduced all app and API fees to zero, commencing a 100 million UNI token burn following governance approval.

The move strengthens Uniswap’s deflationary model and aligns token utility with protocol economic growth, significantly impacting market dynamics and liquidity provider strategies.

Uniswap Nullifies Interface Fees, Bolsters UNI Value

Uniswap set all app and API interface fees to zero after the successful passage of the “Fee Switch Activation Proposal”. Governance activation confirmed that all protocol fees on Uniswap v2 and v3 would be ignited. A total of 100 million UNI tokens from the treasury were burned.

Interface fees are now zero, confirmed in official documentation. Uniswap Governance activated protocol fees for specific pools, integrating them with the Unichain mainnet. This move is designed to enhance liquidity provider revenue via a discount auction system.

Hayden Adams shared that the governance proposal passed with overwhelming approval. The community showed significant support with ~125 million “YES” votes. Adams emphasizes Uniswap’s potential for becoming a primary venue for token trading. As Adams stated, “I believe the Uniswap protocol can become the primary venue for token trading. This proposal lays the foundation for its growth over the next decade.”

UNI’s Market Dynamics and Deflationary Trends

Did you know? In Uniswap’s history, the fee switch was only a concept until 2025, markedly shifting UNI’s economics, much like prior DeFi protocols like MakerDAO.

According to CoinMarketCap, Uniswap (UNI) trades at $6.44, boasting a market cap of “4.71 billion” and a trading volume increase of 82.22%. UNI’s value experienced an 8.46% uplift over 24 hours but remains 17.16% lower over 90 days.

The Coincu research team highlights potential for heightened UNI token deflation post-switch. Increased regulatory scrutiny might arise, but the protocol’s deflationary mechanics echo successful models like those seen in MakerDAO and Aave.