Uniswap Burns $596M in UNI as Fee Switch Goes Live and Supply Shock Hits

• Uniswap activates fee switch and removes $596M UNI from circulation
• Governance-backed burn tightens UNI supply and boosts market activity
• Fee-generated revenue now fuels ongoing UNI token destruction

Uniswap has confirmed a massive reduction in its token supply after executing a long-awaited governance decision. According to onchain analyst EmberCN, the protocol burned 100,000,000 UNI worth about $596,000,000. The transaction marked the first major outcome of Uniswap’s approved fee burning framework. Onchain data shows the burn was finalized around 4.30 am UTC, according to EmberCN.

This supply reduction immediately altered UNI’s market dynamics. Consequently, traders responded with increased activity across major exchanges. Governance records reveal overwhelming backing for the proposal. Over 125,000,000 UNI supported the measure, while just 742 UNI opposed it. Such a voting margin highlighted strong alignment among token holders. The approval rate reached 99.9%, reinforcing confidence in the protocol’s direction.

Several influential crypto figures supported the initiative. Backers included Jesse Waldren of Variant, Kain Warwick of Infinex and Synthetix, and former Uniswap Labs engineer Ian Lapham. Uniswap Labs later confirmed the execution publicly. In a post on X, the team stated that UNIfication had officially gone live onchain. Besides the burn, the update introduced major fee adjustments. Interface fees charged by Uniswap Labs were reduced to zero.

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However, protocol fees were activated on Uniswap v2 and selected v3 pools on Ethereum. These fees now contribute directly to UNI’s supply reduction mechanism. Additionally, Unichain-generated fees will support future UNI burns. These allocations apply after Optimism and Layer-1 data costs are covered. Market data reflected swift investor response following confirmation. UNI rose more than 5% within 24 hours, supported by higher trading volume. Market capitalization also increased as supply tightened. The circulating supply now stands near 730,000,000 UNI from a capped total of 1,000,000,000.

Fee switch ignites renewed focus on UNI supply pressure

The activation of protocol fees reshaped UNI’s long-term value structure. Hence, token economics now tie more closely to network usage. Each qualifying transaction may contribute to ongoing supply reduction. This design links Uniswap’s growth directly to UNI scarcity. The scale of the burn placed Uniswap among leading DeFi protocols using deflationary mechanics. According to EmberCN, few decentralized platforms have executed burns of similar magnitude.

Concerns about development funding surfaced during governance discussions where Uniswap Foundation addressed these concerns before voting concluded. It confirmed continued support for builders and grant programs. Developer funding remains a core priority despite the shift in fee distribution. Moreover, the foundation committed 20,000,000 UNI toward ecosystem growth initiatives. This allocation aims to sustain innovation across Uniswap’s expanding infrastructure.

The execution signaled a turning point for UNI holders. Supply dynamics now depend more heavily on protocol performance rather than emissions. As fee flows stabilize, market participants are watching burn consistency. Attention has shifted toward how frequently fees convert into token destruction. The burn underscores the growing influence of onchain governance. Uniswap’s latest move reflects how token holders continue shaping DeFi economics in practice.

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