Overview
- The proposal would activate protocol fees across v2 and v3, routing a defined share of trading fees to buy and burn UNI, with v2 set at 0.25% to LPs and 0.05% to the protocol and v3 directing one‑fourth or one‑sixth of LP fees to the protocol.
- A retroactive burn of 100 million UNI from the treasury is included, cutting the circulating supply by about 16% from roughly 625 million to about 525 million.
- New mechanisms such as Protocol Fee Discount Auctions and Uniswap v4 “aggregator hooks” aim to internalize MEV and collect fees from external liquidity, with Unichain sequencer fees also funneled to the burn.
- Operationally, Uniswap Labs and the Uniswap Foundation would consolidate under a five‑member board, Labs would set interface, wallet and API fees to zero, and a 20 million UNI annual growth budget is slated to begin in 2026.
- UNI rallied sharply on heavy volume following the announcement, while analyst estimates range from around $38 million per month to roughly $500 million per year in potential buybacks, and on‑chain trackers flagged large holder deposits to exchanges during the surge.