Uniswap Burns $596M in UNI After Near-Unanimous Governance Vote

• Uniswap executed a massive burn of 100 million UNI tokens worth nearly $600 million following a nearly unanimous governance vote to overhaul the protocol’s economic model.
• The “UNIfication” proposal activates a fee switch for Uniswap v2 and v3 on the Ethereum mainnet which redirects a portion of trading fees toward permanent token burns.
• This shift transitions UNI from a pure governance asset into a deflationary token where ongoing supply reductions are directly linked to trading volume and protocol revenue.

Leading decentralised exchange Uniswap has burned 100 million UNI tokens worth about US$596 million (AU$911.8 million) after token holders approved its fee-burning proposal, known as “UNIfication.”

The move activates Uniswap’s protocol fee switch, setting interface fees to zero while enabling fees on Uniswap v2 and select v3 pools on Ethereum mainnet, with future Unichain fees also earmarked for UNI burns after covering network and data costs.

On-chain records from EmberCN show the burn was executed around 4:30 am UTC on Dec. 28, with the tokens sent to an unrecoverable address.

Related: Franklin Templeton’s XRP ETF Breaks 100M Tokens, Marking a Major Institutional Milestone

Proposal Passes with Overwhelming Support 

Token holders approved the UNIfication plan on Thursday with 99.9% support over five days of voting. More than 125 million UNI voted in favour, versus 742 UNI against. 

Uniswap is one of the largest DeFi trading venues by activity, averaging about US$2 billion (AU$3.06 billion) in daily volume and generating roughly US$600 million (AU$918 million) in annualised fees, based on DeFiLlama data. 

Yet UNI has so far functioned mainly as a governance token because the protocol’s fee flow has been designed to pass through to liquidity providers rather than creating a direct economic loop back to the token itself.

That is now changing under the new setup as a portion of protocol fees will be routed to an on-chain burn mechanism, tying Uniswap usage to reductions in UNI supply. 

The logic is straightforward: if trading activity holds up, fees continue to accrue, and more tokens can be removed from circulation over time, creating a more explicit connection between protocol performance and the token’s supply dynamics.

Read more: Analyst Says Forget the Four-Year Cycle, Crypto’s New Reality Is the Ten-Year Grind

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