Uniswap Proposes Major ‘UNIfication’ Plan to Activate Protocol Fees, Burn UNI Tokens, and Cut Cir...

Uniswap plans to cut UNI supply by 16% through a new burn and fee activation system.

The proposal merges Uniswap Labs and Foundation into one body to align governance and growth.

UNI price jumps over 40% as traders react to Uniswap’s new token and protocol changes.

Uniswap has introduced a proposal named ‘UNIfication’ to overhaul its token economics and governance. Submitted on November 10, the plan outlines the activation of protocol fees and a new burn mechanism linked to trading activity. The move aims to align UNI’s value with the protocol’s usage and reduce its circulating supply

The plan will involve a one-time 100 million UNI burn of the treasury as an amount of fees that might have been charged since 2020. The circulating supply is likely to decrease by approximately 16%, to approximately $525 million, after the burn, downward of $625 million.

New Burn Mechanisms and Incentive Systems

The proposal introduces auctions where traders can bid UNI tokens for discounted trading fees. The UNI used in these auctions would then be burned, creating a consistent link between trading incentives and token scarcity. Uniswap launched its Layer 2 blockchain called Unichain last year. Revenue from Unichain will also feed into the burn mechanism

This structure aims to strengthen the relationship between network activity and token value. Uniswap will make it possible to have a more sustainable flow of values in its ecosystem by linking fees, burns, and participation.

Governance Restructuring and Organizational Alignment

The other important point of the proposal refers to the integration of Uniswap Labs and the Uniswap Foundation into one entity. The unified entity would oversee both governance and development under one framework. Foundation staff would move to Labs, consolidating leadership and removing duplicate organizational layers

Uniswap Labs would also stop collecting revenue from its front-end interface, wallet, and API. Instead, future growth will rely on protocol-level adoption rather than product-level income. From 2026, a quarterly growth budget from the treasury will fund incentives, development, and community initiatives. Moreover, the Uniswap Foundation recently proposed establishing a new legal entity called DUNI.

Market Reaction and Broader Context

Following the public release of the proposal, UNI’s market price rose sharply, gaining more than 40% within hours. The surge reflects strong investor response to the planned fee activation and supply reduction. Over the past week, UNI’s price has increased by more than 80%, outpacing major cryptocurrencies. Uniswap’s leadership links the timing of the proposal to recent regulatory changes in the United States, which eased previous constraints on protocol-level governance

The protocol has a daily trading volume of more than $650 million and annual fees worth over $1 billion. Under the suggested modifications, Uniswap will seek to place the two revenues directly in the hands of the token holders as it aims at the sustainable development of the ecosystem.