Uniswap’s $165M Funding: A Vote for the Ages! 🎉

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What to know:

  • The Uniswap community, in a fit of collective wisdom, has approved two governance proposals aimed at expanding the Unichain network and Uniswap V4 protocol, including a shiny new grants program and liquidity incentives. 🤑
  • These proposals, which received a resounding 80% approval from UNI token holders (who apparently have nothing better to do), could initiate a ‘fee switch’ that would redirect some protocol revenue from liquidity providers to UNI holders. Because why not? đź’¸
  • The Uniswap Foundation, a non-profit that supports Uniswap (and probably has a very nice coffee machine), may become a legal entity as part of these changes, potentially paving the way for a governance proposal for delegators to earn protocol revenue. Legal entities, because who doesn’t love paperwork? đź“ś

The Uniswap community has greenlit two governance proposals to propel the growth of the Unichain network and Uniswap V4 protocol. Yes, they actually did that.

The initiatives, dubbed “Uniswap Unleashed” (because everything sounds cooler with ‘unleashed’ in the title), introduced a new grants program and liquidity incentives while hinting at initial steps for a “fee switch.” This long-contested protocol vote would pay out a portion of trading fees to holders of Uniswap’s UNI. Hold on to your hats, folks! 🎩

Relevant governance posts have not directly mentioned a fee switch but noted plans to “activate revenue.” Activating revenue sounds like a superhero move, doesn’t it?

The foundation requested a staggering $95.4 million for its grants budget and $25.1 million for operations over two years, plus $45 million for liquidity incentives to attract users and fuel ecosystem growth through developer campaigns. Because who doesn’t love a good budget? 💰

Both proposals passed with more than 80% of UNI token holders in favor, governance data shows. Apparently, they all agreed on something for once!

The passage could now put into motion the fee-switch, a longtime community goal that would shift some protocol revenue — currently over $1 billion annually — from liquidity providers to UNI holders. Its activation, delayed by past failed votes, hinges on legal preparations by the foundation. Legal preparations, the bane of every good idea!

The proposal was initially proposed in July 2021 to pilot the switch for a small set of Uniswap protocol pools. The switch will not increase fees for users but will retain a small portion of what is currently paid out to liquidity providers (LP), or users who lock up their tokens on Uniswap in exchange for fee rewards. So, no worries there!

However, it could mean lesser fee earnings for Uniswap’s LPs and more rewards for holders of Uniswap’s native token UNI, which accrues value for UNI holders — leaving the proposal hanging for the past few years. One such vote failed to pass in 2023 after being voted against by influential token holders. Ah, the drama!

Part of the steps toward sharing revenue would be to make the Uniswap Foundation — a non-profit that helps develop and maintain Uniswap — a legal entity, giving it clarity on legal status and the ability to contract with other protocols. Because clarity is key, right?

“If our vetting is successful and we believe the creation of a legal entity for Uniswap Governance is in its best interest, we would propose to Governance to implement a legal entity structure,” the proposal said. Sounds like a plan!

“If adopted, this step would pave the way for the potential introduction (or re-introduction) of a governance proposal for delegators to earn Protocol revenue,” it noted. And there you have it, folks!

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2025-03-20 14:46