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Uniswap Vote Approves 'UNIfication,' Paving Way for 100M UNI Burn and Protocol Fee Capture

A short timelock precedes the start of on-chain mechanisms that will burn UNI using protocol trading and sequencer revenues.

Overview

  • The on-chain vote closed on Dec. 25 with 125,342,017 UNI in favor and 742 against, clearing quorum and moving the changes into an roughly two-day timelock before execution.
  • Once active, Uniswap v2 will direct 0.05% of the standard 0.30% fee to the protocol, while selected v3 tiers will route 16.7%–25% of LP fees to the protocol with parameters adjustable by governance.
  • All protocol fees and net Unichain sequencer revenue will flow to on-chain burn contracts known as TokenJar and Firepit, with Optimism retaining 15% of sequencer revenue under the arrangement.
  • Uniswap Labs will turn off frontend, wallet and API fees, supported by a separate 40 million UNI treasury allocation that vests over two years to fund protocol-focused development.
  • UNI traded roughly in the $5.9–$6.4 range around the decision as some liquidity providers cautioned that protocol fee capture could squeeze LP returns and influence liquidity placement.