The Uniswap community has voted in favor of two governance proposals aimed at driving the growth of the recently launched Unichain Layer 2 and Uniswap v4 protocols. These initiatives include a new grants program and additional liquidity incentives. Notably, the decision also lays the groundwork for activating the long-anticipated “fee switch.”
Both proposals, part of the “Uniswap Unleashed” plan, seek to expand the Uniswap ecosystem and mark “the beginning of a new era” by unlocking “new opportunities to build, grow, and create value,” the Uniswap Foundation stated on the X platform.
Developed in collaboration with the Uniswap Foundation and Web3 risk management protocol Gauntlet, the liquidity incentives are designed to attract new users and sustain ecosystem growth through developer-focused initiatives. The foundation has requested a $95.4 million investment for its grants budget and an additional $25.1 million to fund operations over the next two years. In a separate proposal, the foundation requested a $45 million budget to support liquidity incentives.
Gauntlet has deployed and configured an Aera vault on the mainnet for the Uniswap Foundation, seeded with over 7.5 million UNI tokens, valued at approximately $52 million at the time of the announcement. UNI’s price has surged more than 10%, according to data from Tapchibitcoin.io
“We recognize and appreciate the scale of this request. It represents an investment in the success of the Uniswap Protocol, Unichain, and long-term value for the Uniswap community,” the proposal stated.
Regarding the fee switch, the Uniswap Foundation will undertake the necessary legal steps to allocate protocol fee revenue to governance members. “If approved, this step would pave the way for the potential introduction (or reintroduction) of a governance proposal enabling delegators to earn protocol revenue,” the proposal noted.
The fee switch would redirect a portion of protocol revenues—currently collected by liquidity providers—to UNI token holders. Its delayed activation has been a long-standing concern among community members, especially following unsuccessful votes in the past. Uniswap has generated over $1 billion in annualized fees.
The Uniswap Foundation is an independent non-profit organization overseeing the growth of the Uniswap protocol, community, and ecosystem. One of its key objectives has been to establish the groundwork for the fee switch.
Uniswap v4 launched in mid-January, transforming the decentralized exchange into a developer-driven protocol through the implementation of “hooks”—contracts that allow developers to extend functionalities related to pools, swaps, fees, and more. Uniswap Labs, the entity developing the Uniswap ecosystem, also launched the Layer 2 network Unichain using the Optimism tech stack.