Uniswap's UNI Fication Proposal: Deflationary Transformation Has Begun

Uniswap's New Deflationary Strategy

Recently, Uniswap aimed to radically change the economic model of the protocol by unanimously accepting the UNI fication proposal. Uniswap founder Hayden Adams announced that the support for the proposal was at 99.9%.

Activation of the Protocol Fee Switch

This proposal, presented by Uniswap Labs and the Uniswap Foundation, aims to activate the protocol's "fee switch," directing a portion of transaction fees directly to the protocol. These fees, which were previously entirely allocated for liquidity providers, will now allow for the continuous burning of UNI tokens. Additionally, net fee revenues obtained from Unichain will also be integrated into the same burning system.

Deflationary Cycle and Burning Process

Thus, with the increasing use of the protocol, the supply of UNI will continuously decrease, creating an effective deflationary cycle. Following the acceptance of the proposal, a two-day time lock will come into effect, after which, according to projections, 100 million UNI is expected to be burned.

Management and Operational Consolidation

Additionally, as part of the proposal, the operations of the Uniswap Foundation will be transferred to Uniswap Labs, and an annual growth budget funded by UNI will be created to support protocol development and ecosystem expansion. This way, the Uniswap team will eliminate fees from protocol interfaces, wallets, and API services, making operations more efficient.

A New Era in the Regulatory Environment

These developments emerged in the context of ongoing legal battles and regulatory scrutiny led by the SEC (Securities and Exchange Commission) under Gary Gensler. Uniswap emphasized that it has reached an important milestone in becoming mainstream in decentralized finance (DeFi).

Thus, Uniswap's UNI fication proposal stands out as a significant step in the DeFi world by combining innovations in the economic model and regulatory developments in the sector.