James Richardson
The Uniswap community has recently approved two crucial governance proposals aimed at accelerating the growth of both the Unichain Layer 2 and Uniswap v4 protocols. These proposals are part of the โUniswap Unleashedโ plan, which introduces a new grants program and various liquidity incentives to further develop the Uniswap ecosystem. Notably, these decisions also lay the foundation for the long-anticipated “fee switch” feature.
According to the Uniswap Foundation on the social media platform X, these initiatives mark the start of a new chapter for the community, unlocking fresh opportunities for building, expanding, and creating value.
In collaboration with Gauntlet, a web3 risk management protocol, the liquidity incentives are designed to attract new users and maintain growth by targeting developer-focused campaigns. The foundation has requested a $95.4 million budget to fund its grants program, alongside an additional $25.1 million to support operations over the next two years. A separate proposal for $45 million will fund liquidity incentives.
The Uniswap Foundation has also introduced an Aera vault on the mainnet, seeded with more than 7.5 million UNI tokensโcurrently valued at approximately $52 million. UNI tokens have seen a 10% increase in value recently.
The proposal acknowledges the scale of the request, emphasizing that it represents a significant investment into the future success of the Uniswap protocol and Unichain, ultimately benefiting the Uniswap community.
Fee Switch Activation and Its Potential Impact
The long-awaited fee switch is set to activate after the Uniswap Foundation completes the required legal steps to begin distributing protocol fee revenues to governance members. If adopted, this would pave the way for a governance proposal allowing delegators to earn protocol revenues.
The fee switch is expected to redirect a portion of the protocolโs revenuesโcurrently collected by liquidity providersโto UNI token holders. This delayed feature has been a point of frustration for the community, particularly after several past votes failed to bring it to fruition. Uniswap has generated over $1 billion in annualized fees, further highlighting the significance of this potential change.
Uniswap v4 and Unichain: Key Updates for Developers
Launched in mid-January, Uniswap v4 is designed to transform the decentralized exchange into a developer-friendly protocol. The introduction of “hooks”, or contracts, allows developers to enhance interactions within pools, swaps, fees, and more.
Alongside Uniswap v4, the foundation also launched Unichain, a Layer 2 network built on the Optimism tech stack, further strengthening the Uniswap ecosystem and its scalability.
In summary, with the approval of these governance proposals, Uniswap is setting the stage for significant protocol expansion, including the activation of the fee switch and the further development of its Layer 2 solution.
