Uniswap Introduces “UNIfication” Proposal to Activate Protocol Fees & Burn UNI

Uniswap Labs has introduced the UNIfication Proposal, a transformative governance plan that activates long-awaited protocol fees, establishes a UNI burn mechanism, and merges the efforts of Uniswap Labs & Foundation under a unified growth model. The proposal aims to realign incentives across the ecosystem, ensuring that traders, liquidity providers, and token holders all benefit from the protocol’s continued success.

• About the UNIfication Proposal
• Protocol Fee Activation & UNI Burn
• Ecosystem Realignment & Growth Fund

About the UNIfication Proposal

Proposed by Hayden Adams, Devin Walsh, and Ken Ng, the UNIfication proposal represents a major milestone for Uniswap transitioning it from a regulatory-constrained project to a fully decentralized, self-sustaining protocol. After years of legal battles & governance limitations, the changing regulatory landscape now allows Uniswap Labs to directly participate in governance and redirect focus toward community-aligned development.

Uniswap has powered more than $4 trillion in cumulative volume, serving as the backbone of decentralized trading. The proposal sets the stage for Uniswap to become the default global exchange for tokenized value, optimizing fee distribution, liquidity efficiency, and protocol sustainability.

Protocol Fee Activation & UNI Burn

A central element of the proposal is activating protocol fees, a long discussed “fee switch” within Uniswap’s smart contracts. Once enabled, a portion of swap fees across v2 and v3 pools will be redirected to an onchain burn contract, reducing UNI supply over time and directly linking protocol usage with token value.

The proposal also includes:

• Redirecting Unichain sequencer fees into the burn mechanism.
• Implementing aggregator hooks in Uniswap v4, enabling fee collection from external liquidity sources & transforming the protocol into an onchain aggregator.
• Conducting a retroactive burn of 100M UNI from the treasury to represent unclaimed historical fees.

Together, these mechanisms ensure UNI’s deflationary model evolves in tandem with Uniswap’s network growth.

A proposal for the next chapter of 🦄

UNIfication is a joint proposal from Uniswap Labs and the Uniswap Foundation that turns on protocol fees and aligns incentives across the Uniswap ecosystem

Positioning the Uniswap protocol to win as the default decentralized exchange https://t.co/ra0Y7TKpYk

— Uniswap Labs 🦄 (@Uniswap) November 10, 2025

Ecosystem Realignment & Growth Fund

The UNIfication proposal consolidates Uniswap Labs and the Uniswap Foundation into a single operational entity focused solely on protocol expansion. Foundation employees will transition to Labs, ensuring unified goals & eliminating redundant structures.

Labs will also cease collecting fees from its interface, wallet, & API, a bold step designed to maximize adoption & support open source development. Instead, a 20M UNI annual growth budget, distributed quarterly beginning in 2026, will fund ecosystem grants, developer support, and strategic initiatives through a transparent, onchain process.

This governance backed growth fund ties Labs’ success to the health of the Uniswap ecosystem, reinforcing decentralized accountability & innovation. In a nostalgic move, Uniswap governance will migrate and burn the original Unisocks v1 liquidity position, an early symbol of DeFi culture launched in 2019.

By transferring it to Uniswap v4 on Unichain and sending it to a burn address, the team will permanently lock the token’s supply curve. This symbolic act celebrates Uniswap’s playful beginnings while cementing its long term vision, bridging DeFi’s culture with enduring onchain permanence.

The UNIfication Proposal marks a new era for Uniswap: one of aligned incentives, sustainable growth, and transparent governance. By combining fee activation, deflationary UNI mechanics, and a unified development structure, Uniswap positions itself as the decentralized trading layer for the tokenized world.

If you find any issues in this blog or notice any missing information, please feel free to reach out at yash@etherworld.co for clarifications or updates.

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