Recent news confirms that the Uniswap community has endorsed two key governance proposals, facilitating a $165.5 million funding boost to the newly introduced Unichain Layer 2 and Uniswap v4 protocols. This decision is crucial in setting the stage for the much-anticipated ‘fee switch’.
The two proposals, integral to the ‘Uniswap Unleashed’ strategy, are aimed at advancing the Uniswap ecosystem. These proposals signify a new era in our community by opening up new opportunities for growth, development, and value creation and capture, as stated by the Uniswap Foundation on X, a social media platform.
These proposals were developed in partnership with the Uniswap Foundation and Gauntlet, a web3 risk management protocol. The proposed liquidity incentives are designed to attract new users and sustain ecosystem expansion via developer-centric campaigns. The foundation has requested $95.4 million for its grants budget and an additional $25.1 million to fund operations over the next two years. In a separate proposal, the foundation solicited a $45 million budget to support liquidity incentives.
Gauntlet has deployed and configured an Aera vault for the Uniswap Foundation on the mainnet, which will be seeded with more than 7.5 million UNI tokens, valued at approximately $52 million at the time of writing. The UNI token has surged over 10%, according to data from The Block.
As for the much-debated fee switch, it will be implemented after the Uniswap Foundation completes the necessary legal steps to distribute protocol fee revenue to its governance members, paving the way for a potential introduction of a governance proposal for delegators to earn protocol revenue.
This fee switch will channel a part of the protocol revenues currently captured by liquidity providers to UNI token holders. This delayed activation has been a point of concern within the community, especially after previous votes did not yield results. Uniswap has amassed over $1 billion in annualized fees.
The Uniswap Foundation, an independent non-profit entity, manages the growth of the Uniswap protocol, community, and ecosystem. It was established to lay the groundwork for a fee switch. Uniswap v4 was launched in mid-January, transforming the decentralized exchange into a developer protocol. Uniswap Labs, the firm behind the Uniswap ecosystem, also introduced the Layer 2 network Unichain powered by the Optimism tech stack, as previously reported by The Block.
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