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Uniswap Labs and the Foundation have proposed initiating a protocol fee and burning 100 million UNI tokens.
2025-11-11 00:00

According to an article by Uniswap founder Hayden Adams, he, along with team members Devin Walsh and Kenneth Ng, submitted a new proposal to Uniswap governance, planning to officially launch a protocol fee mechanism and use the fees for UNI burning, in order to unify the incentives for the protocol and token holders.

The main contents of the proposal include:

1: Enable protocol fees and use the revenue for UNI destruction;

2: Incorporate Unichain sequencer fees into the UNI burning mechanism;

3: A one-time destruction of 100 million UNI tokens from the national treasury to represent the amount due for the period of unactivated protocol fees since the token's issuance;

4. Introduce a "discounted auction of agreement fees" mechanism to optimize LP returns and internalize MEV;

5: Introducing an aggregator hook, enabling Uniswap v4 to aggregate external liquidity on-chain and collect protocol fees;

6: By contractually restricting Labs to focus solely on growth initiatives that align with the interests of community governance, and by ceasing to charge fees in the interface, wallet, and API;

7: Transfer foundation staff to Labs and establish a growth fund to accelerate protocol expansion;

8: Migrate the Unisocks liquidity held by governance to v4 on Unichain and destroy the LP position.

Hayden Adams stated that this proposal marks a new phase of growth for Uniswap, aiming to make the protocol a leading global trading venue for tokenized assets and to reshape the long-term value loop through UNI burning and incentive mechanisms.