Uniswap has rolled out a bold proposal that could reshape how value circulates within its ecosystem. The plan, informally called “UNIfication,” looks to activate on-chain protocol fees, permanently reduce UNI’s total supply, and bring all branches of the project under one coordinated framework.
Reducing UNI Supply Through Fees and Burns
For the first time, Uniswap is considering turning on protocol fees, a long-awaited feature since its token launch in 2020. Under the new model, a share of these fees would be automatically redirected to a continuous UNI burn, reducing the token’s circulating supply and directly linking UNI’s value to network activity.
The proposal also incorporates Unichain, Uniswap’s upcoming layer-2 network, where sequencer fees would feed into the same burn process. This move aims to strengthen UNI’s long-term value through deflationary mechanisms tied to real protocol usage.
As part of the plan, a one-time burn of 100 million UNI is proposed, representing the amount that might have been burned if this system had existed since Uniswap’s inception. This would lower the circulating supply by roughly 16%, from around 625 million to 525 million tokens.
In addition, traders would be able to bid UNI to receive reduced trading fees, with all tokens used in these auctions permanently removed from circulation. This mechanism reinforces Uniswap’s push toward sustained demand and deflationary pressure.
Streamlining Governance and Operations
Another major aspect of the proposal is a structural merger between Uniswap Labs and the Uniswap Foundation, combining their resources and goals into a single entity focused entirely on protocol growth and ecosystem development. Staff from the Foundation would transition to Labs, eliminating the current separation that formed after UNI’s launch.
Uniswap Labs would also cease collecting revenue from its wallet, API, and interface, signaling a shift away from product-level monetization. Instead, the focus would move toward protocol-level adoption, with a dedicated growth budget from the treasury funding ecosystem incentives and developer support beginning in 2026.
This reorganization comes as U.S. regulatory conditions have eased, allowing Uniswap to explore new governance structures without prior legal uncertainty.
Market Reaction
Following the announcement, UNI’s price surged more than 40% within hours, reflecting renewed optimism among investors about the token’s deflationary trajectory and the strengthened alignment between Uniswap’s governance and its economic model.
In summary, the “UNIfication” proposal represents one of Uniswap’s most ambitious updates yet, aiming to reduce supply, unify governance, and ensure UNI’s value more closely mirrors the platform’s usage and growth.
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