The price of the native token of leading decentralized cryptocurrency exchange Uniswap ($UNI) has surged by nearly 50% over the last 24-hour period over a recently filed proposal to “strengthen and invigorate” Uniswap’s governance and reward UNI token holders.
The proposal, submitted by the Uniswap Foundation’s governance lead Erin Koen, would reward UNI token holders who have staked and delegated their tokens in a bid to improve Uniswap governance’s “resilience and decentralization.”
Explaining the proposal Koen noted that Uniswap Protocol is “immensely useful” after it processed trillions of dollars’ worth of token swaps since launch, while being “governance minimized.” As a result, he said, the protocol “built a market share lead with a very low level of Governance activity.”
Maintaining its lead, Koen added, is only going to get harder as liquidity is fragmenting over multiple blockchains as competition grows. As such, he said “Uniswap Governance needs to use its reputational, financial & technical capital for good.
🧵 Biggest week in Uniswap Protocol Governance… ever?I just proposed a large-scale upgrade to the system. Specifically, I believe we should upgrade the protocol so that its fee mechanism rewards UNI token holders that have staked and delegated their tokens. 🦄
— Erin Koen (@eek637) February 23, 2024
Koen’s proposal for Uniswap represents a notable shift in the platform’s approach to fees and differs from an earlier initiative, launched last June, which sought to incentivize token holders by distributing accumulated protocol fees.
In a decisive vote, the Uniswap community ultimately rejected that proposal, which would have activated fees across numerous liquidity pools and directed a portion of the revenue to token holders. However, October saw a different approach implemented, with the exchange introducing a 0.15% fee on crypto swaps involving specific tokens, including ETH and USDC.
If Koen’s proposal is approved by Uniswap’s community, it would enable a permissionless collection of protocol fee $BTC
