The native token behind Uniswap rose more than 38% after the Uniswap Foundation and Uniswap Labs presented a proposal to make holding the token more attractive to investors.
Potential changes outlined in the “UNIfication” proposal include enabling a protocol-level fee mechanism to burn Uniswap (UNI) tokens and creating a discounted protocol fee auction system to increase returns for liquidity providers, the Uniswap Foundation said in a joint proposal with Uniswap Labs on Monday.
They also plan to burn 100 million UNI – approximately 16% of the circulating supply of UNI – from the treasury, which could further improve the supply and demand dynamics of UNI, the governance token behind the decentralized exchange Uniswap.
Fees on Uniswap’s Ethereum Layer 2, Unichain – which has generated $7.5 million in annualized fees since its launch nine months ago – will also be sent to the same UNI burn mechanism.
“We believe this proposal positions the Uniswap protocol to win as the default decentralized exchange for tokenized value,” the Uniswap Foundation said.
UNI token rises by almost 40%
UNI surged about 38.5% on the news to $9.70, giving the governance token a much-needed boost after lagging Bitcoin (BTC) and BNB (BNB). Solana (SOL) and several other top tokens this cycle.
UNI’s market capitalization has surpassed $6 billion on the news and is now the 34th largest cryptocurrency.
Uniswap is by far the largest DEX, processing approximately $4 trillion in cumulative volume since its launch in November 2018.
Uniswap will prioritize protocol development
While the Uniswap Foundation has called UNification the “next era” of the protocol, providing grants to enhance the development and growth of the protocol and support decentralized finance builders will continue to be a priority, it said.
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To achieve this, it plans to create a growth budget, which would involve the distribution of 20 million UNI tokens.
The UNIfication proposal also introduces a Uniswap Growth Budget to fund additional growth of the protocol and ecosystem for industry builders each quarter.
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