Uniswap Labs and Uniswap Foundation Propose “UNIfication” to Overhaul Ecosystem Governance and Tokenomics. Source: Photo by Tara Winstead
Uniswap Labs and the Uniswap Foundation, two leading organizations behind the Uniswap protocol, have unveiled a groundbreaking governance proposal called “UNIfication.” This initiative seeks to realign incentives across the Uniswap ecosystem, streamline operations, and strengthen Uniswap’s position as the leading decentralized exchange for tokenized assets.
The proposal outlines a comprehensive restructuring that includes activating protocol fees, introducing a UNI token burn mechanism, and consolidating the ecosystem’s key teams under a unified growth strategy. According to a blog post published on November 11, UNIfication would redirect a portion of trading fees toward burning UNI tokens, while fees generated from Uniswap’s layer-2 network, Unichain, would also contribute to the burn.
Another feature, Protocol Fee Discount Auctions (PFDA), would allow traders to bid for reduced fees, capturing maximal extractable value (MEV) and further enhancing the token burn process. The upcoming Uniswap v4 would also evolve into an onchain aggregator, earning fees from external liquidity sources through new “hooks.”
In a major move, Uniswap Labs proposed a retroactive burn of 100 million UNI tokens from the treasury—an amount estimated to represent what could have been burned if protocol fees were active since Uniswap’s inception.
Under UNIfication, Uniswap Labs will absorb the Uniswap Foundation’s ecosystem teams, forming a unified leadership board consisting of co-founders Hayden Adams, Devin Walsh, Ken Ng, Callil Capuozzo, and Hart Lambur. The company will also eliminate product fees on its interface, wallet, and API to focus entirely on protocol growth and benefit UNI holders.
Additionally, Uniswap governance would establish an annual growth budget of 20 million UNI starting in 2026, distributed quarterly. If approved, UNIfication will mark the most transformative shift in Uniswap’s governance and economics since its 2020 UNI token launch, potentially redefining decentralized finance’s most influential exchange.