This time, UNI will completely reconstruct its valuation system, transforming from a purely governance voting tool to an income-generating asset supported by real cash flow. With the self-built Layer 2 chain Unichain to realize income return, this set of 'destruction + repurchase + ecological closed loop' combo is making UNI a 'value perpetual motion machine' in the decentralized finance field.
1. The destruction of 100 million coins is not a show, but a repayment for 'issuing too many coins' over the past five years.
The project party has directly destroyed 100 million UNI this time, which is about 600 million US dollars at the current price. It is not to pull a K-line, but to positively correct an old problem - the supply structure has been too loose over the past five years.
UNI was launched in 2020 under very urgent circumstances; the core goal at that time was only one: speed, to quickly spread governance rights and incentives to stabilize the situation. Therefore, token release and incentive design were relatively loose. Over these five years, the tokens have continuously flowed into the market, but the question is—what to do with UNI?
No dividends, no fee income, essentially just voting rights + expectations.
This time’s burn is essentially a cleanup. It permanently deletes 10% from the total supply, not a lock-up, not a delay, but a disappearance at the ledger level. The signal conveyed by this step is very clear: the previous phase of relying on continuously releasing tokens to maintain the ecosystem has ended.
Scarcity is not something that is declared; it is created in an irreversible way.
Second, the fee switch + automatic buyback is equivalent to adding a buyer in the market who never rests.
What truly changes UNI's fate is not the burn, but the mechanism after the fee switch is turned on.
The protocol takes 10%–25% of the fee income and directly uses it to buy UNI on-chain and then burns it.
Automatic, on-chain, not influenced by sentiment.
This is equivalent to putting a 'super buyer' in the market, who does not panic, does not chase highs, does not crash the market; as long as there are trades on Uniswap, it buys. Buys on the rise, buys on the fall.
The biggest contradiction of Uniswap in the past was:
The largest trading volume in the world, but the protocol makes not a single cent; all fees go to LP, and UNI is completely decoupled from business scale.
Now it’s different. Trading volume = protocol income = buyback strength = continuous supply reduction.
The more prosperous the business, the scarcer the token; this is a complete business closed loop.
Third, Unichain: previously paying Gas was a cost, now it directly becomes income.
Looking at Unichain, this step is underestimated by many.
In the past on the Ethereum mainnet, every transaction's Gas was essentially 'working for others'.
Now that we have our own L2, this portion of Gas no longer flows out but stays within the Uniswap system.
Originally a cost item, it has become an income item.
And these revenues will ultimately return to UNI through buybacks, burns, and ecological reinvestment.
Looking deeper, Unichain allows Uniswap to no longer be constrained by the mainnet's performance and Gas volatility; it can set its own pace, control the experience, and expand the ecosystem.
Whoever owns the chain has long-term initiative.
Fourth, UNI's valuation model has completely transformed from 'air' to 'cash flow'.
This step is actually the most crucial.
Previously, UNI's biggest problem was: it couldn't be valued.
What do you say UNI is worth to institutions? You can only discuss narratives, status, and the future.
Now it’s different.
With real income, continuous buybacks, and predictable cash flow paths, UNI can now be evaluated using traditional financial models.
Based on the current trading volume, UNI's implied P/E ratio is approximately between 12–24 times.
In traditional tech assets, what level is this? Almost the floor price.
This logic is fundamentally the same as Apple's long-term stock buyback, but it happens on-chain and is executed automatically without relying on management's will.
UNI is no longer just a governance token; it is transforming into an income-generating asset.
Fifth, why wait until now to do this? Because in 2020, it was a lifesaver, not a layout.
The last question that many people are puzzled about:
With such a good mechanism, why not open it earlier?
The answer is simple: in 2020, there were no conditions for this.
UNI was rushed out under the Sushi vampire attack; at that time, the primary goal was to survive, not to design a long-term business model. Although the fee switch is written in the code, the regulatory risks are too high; once touching protocol income, it can easily attract SEC scrutiny.
In these years, not acting was not due to a lack of thought, but a lack of courage.
Now it’s different:
Regulatory boundaries are becoming clearer; Uniswap is already industry-level infrastructure, and competitors have mostly opened fee-sharing; not acting is a strategic mistake.
More importantly, this time it was not the team's whim, but 97% overwhelming support from the community, with nearly 70 million UNI participating in the vote. This level of consensus itself is a moat.
UNI has evolved from a 'emergency defense tool' in 2020 to a 'value reconstructing asset' today; this is not the end, but the real beginning of the next phase.
The reasonable valuation for UNI in the next bull market is $50 billion; it is highly likely that UNI will enter the top five by market cap in the next bull market.
