Decentralized exchange Uniswap is approaching a pivotal moment as the community prepares to vote on a proposal to enable protocol fees for the first time since the launch of Uniswap V3.
On Friday, May 31, Uniswap token holders will begin the on-chain voting process to decide whether or not to enable the fee change in Uniswap V3 pools.
This would allow the protocol to begin collecting a portion of the trading fees generated on the platform, which could then be used to reward UNI token holders who staked or delegated their rights. governance tokens.
Uniswap Foundation prepares for decisive vote on governance
Ahead of the vote, the Uniswap Foundation shared financial information revealing that it currently holds $41.41 million in fiat and stablecoin, as well as 730,000 UNI tokens. According to unleashedthe foundation plans to disburse $25.77 million of these funds in grants and operating expenses over the next two years..
The decentralized finance (DeFi) community has long planned to enable the fee mechanism in Uniswap V3, as it would transform the platform’s economics.
All trading fees are directed to liquidity providers who place their assets in Uniswap. liquidity pools. Once the fee change is activated, a portion of this revenue would accrue to UNI token holders, further incentivizing users to participate in the governance of the protocol.
However, previous attempts to activate the fee system have been met with resistance, with some community members saying it could negatively impact the liquidity of the exchange. Unchained’s report notes that the proposal’s most recent temperature check vote failed to garner enough support to proceed to a final on-chain vote.
Pricing mechanism deployment plan
If the upcoming vote on May 31 is successful, the Uniswap team indicated that the fee mechanism will not be implemented immediately. Instead they offer extra upgrade to streamline the process of setting fee parameters, providing more control and flexibility to the community.
With $3.6 billion in historical value data trading fees generated on Uniswap, the activation of the protocol’s fee switch represents a crucial moment that could reshape the economic and governance dynamics of one of DeFi’s most influential decentralized exchanges.
It is also worth noting that amid the United States Securities and Exchange Commission’s (SEC) increasing regulatory actions against the cryptocurrency industry, Uniswap Labs recently received a Wells opinion from the SEC.
The Wells Notice is a formal communication issued by the SEC to individuals or entities indicating that the SEC staff has completed its investigation and is considering recommending coercive measure against the individual or company.
At press time, the platform’s native token, UNI, saw a slight price drop of 1.4%, bringing its current value to $11.16. However, UNI has gained over 58% in just the past two weeks after hitting a low of $6.8 on May 15.
Featured image from Shutterstock, chart from TradingView.com
