Uniswap Price Rises Following Approval of UNI Fee Switch Plan
UNI traded near $5.90 as voters approved protocol fees and a large retroactive token burn.
Uniswap’s fee switch ties trading volume to UNI supply cuts via an on-chain burn model.
UNI price consolidated below $6.00 while futures open interest held above $377 million.
UNI traded near $5.90–$5.92 on Dec. 26 after a 2.5% rise in the past 24 hours, as Uniswap voters backed a protocol fee switch and a large UNI token burn. The UNIfication proposal passed with more than 125 million votes in favor and 742 against, setting up a plan to route part of protocol revenues into an on-chain burn mechanism.
UNI Price Trades Near $5.90 After a One-Week Rally
UNI gained 13.84% over the past week, while the price swung between clear weekly extremes. The token printed a weekly low near $5.2009 on Dec. 20 and reached a peak around $6.25 on Dec. 21. After that push, the price cooled and moved into a tighter band near the $6 handle.
However, the recent structure shows consolidation rather than a straight continuation move. Price held a base in the $5.75–$5.80 area during Dec. 24–26, while sellers defended overhead levels. As a result, UNI has traded below the prior $6.20–$6.25 rejection zone.
Intraday action on Dec. 26 kept the same range tone. UNI posted an intraday high near $6.00–$6.02 and an intraday low near $5.74–$5.76, then rebounded toward $5.91. Moreover, price repeatedly stalled near $6.00, which kept that level in focus as near-term resistance.
Derivatives activity has remained active during the current range. UNI futures open interest stood at $377.62 million on Dec. 25, while UNI traded near $5.80 in the same period. Earlier cycles saw open interest climb into the $600–$800 million range, so the market has cooled from peak leverage.
Source:
CoinGlass
Price action also leaves clear technical markers for the next move. A sustained push above $6.00 would place $6.10 and the prior $6.25 high back on the radar. Conversely, a move under $5.88–$5.90 would turn focus toward $5.80, with $5.75 as the next line that traders often track.
UNIfication Vote Backs the Fee Switch and UNI Token Burn
Uniswap Labs and the Uniswap Foundation advanced the UNIfication proposal after a decisive governance vote. Uniswap founder Hayden Adams announced that the vote closed with 99.9% approval. The proposal aims to turn UNI from a governance-only token into an asset tied to protocol economics through fees and supply reduction.
The measure activates the “fee switch,” which redirects a portion of trading fees to the protocol. Until now, Uniswap routed fees to liquidity providers, while UNI holders received governance rights only. Under the new framework, the protocol sends part of the fee stream to an on-chain mechanism designed to burn UNI.
Additionally, the plan adds revenue from the Unichain sequencer to the burn flow after deducting L1 costs and Optimism allocations. The proposal also enters a two-day waiting period before execution steps begin. After that window, Uniswap plans to burn 100 million UNI from the treasury, worth over $590 million at current prices.Related: WLFI Slides Toward $0.11 Support as Bears Dominate: Bounce Ahead?
Uniswap Fees, Daily Volume, and Supply Reduction Mechanics
Uniswap averages about $2 billion in daily trading volume and generates roughly $600 million in annualized fees, according to DeFiLlama data. That scale has kept Uniswap at the top of decentralized exchange activity. At the same time, UNI’s value link to those fees remained indirect before the fee switch.
Consequently, the new structure connects usage and fee generation to UNI supply changes. Higher protocol activity can increase the amount routed into the burn mechanism, while the circulating supply falls as burns occur. The proposal frames that link as a core feature of the updated token design.
The package also reorganizes operations around Uniswap Labs. The plan moves Uniswap Foundation responsibilities to Uniswap Labs and ends interface fees. It also sets an annual development budget for wallets and API services funded by UNI tokens.
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Aave Community Pushes Back on Brand Control Proposal
The Aave DAO and community recently voted against a proposal to transfer brand ownership from Aave Labs to the decentralized autonomous organization (DAO) governing the leading DeFi protocol. Prominent leaders like Aave Labs founder and CEO Stani and Marc Zeller, founder of the Aavechan Initiative, commented on the outcome, noting that voting achieved a record turnout.
What Did Aave Users Vote Against?
According to on-chain data, Coinspeaker retrieved from Snapshot, the “[ARFC] $AAVE token alignment. Phase 1 – Ownership” proposal closed on December 25. The Christmas vote saw a record 1.8 million AAVE users participate. 994,800 AAVE (55.29%) voted “NAY”, 741,600 AAVE (41.21%) chose to abstain, and only 63,000 (3.5%) voted in favor of the proposal.
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“[ARFC] $AAVE token alignment. Phase 1 – Ownership” proposal | Source: Snapshot
Essentially, the proposal suggested that AAVE token holders should seek to take control of Aave’s brand assets. In this case, domains, social media accounts, and naming rights would be placed under a DAO‑controlled structure to be defined later, with safeguards to prevent misuse or takeover. It called on whoever currently controls those assets to transfer them in both principle and practice, regardless of their identity.
Many investors criticized the proposal for being made “in a rush” during ongoing discussions about Aave Labs’ actions and communication strategy, close to popular international holidays. This governance dispute has now consolidated as one of the most significant for a DeFi protocol, offering long-term lessons and setting relevant precedents for DAO voting going forward.
Notably, the proposal stemmed from escalating tensions over revenue distribution and control of AAVE $155.0 24h volatility: 2.1% Market cap: $2.35 B Vol. 24h: $310.78 M off-chain assets. The controversy ignited earlier in December when governance delegates discovered that Aave Labs’ integration of CoW Swap into the official app.aave.com frontend had redirected swap fees (estimated at up to $10 million annually) from the DAO treasury to a wallet controlled by Aave Labs.
Previously, the ParaSwap integration shared such revenues with the DAO, fueling accusations of “stealth privatization” and misalignment between the private development entity and token holders.
Aave-Related Leaderships Comment on Recent DAO Record Vote
As the vote wrapped up, Aave Labs founder and CEO Stani Kulechov commented on it on X. He said it was “a productive discussion that’s essential for the long-term health of Aave.” In the post, Stani pledged commitment to making the economic alignment between Aave Labs and $AAVE token holders clearer.
Additionally, he expanded on his recently disclosed $15 million AAVE purchase, as Coinspeaker reported pre-holidays. He explained the amount was not used for this recent vote. “This is my life’s work,” Stani said, “I am putting my own capital behind my conviction.”
Stani was the leader behind this proposal and a “YES” advocate.
The recent DAO vote has wrapped up, and it has raised important questions about the relationship between Aave Labs and $AAVE token holders. This is a productive discussion that’s essential for the long-term health of Aave.
While it's been a bit hectic, debate and disagreement…
— Stani.eth (@StaniKulechov) December 26, 2025
Aavechan Initiative founder Marc “Billy” Zeller was one of the leading advocates for “ABSTAIN” votes in public discussions. He suggested that token holders abstain because the conditions were not ideal for making such an essential decision while discussions were still ongoing. He pointed out “a compressed timeline, a holiday period, and a debate that was still actively evolving.”
Yet, in an X article published just a few minutes before Stani’s post above, Zeller highlighted the “massive” turnout of 1.8 million AAVE used by voters, claiming “DeFi will win.”
“Despite an unfair timeline and every practical disadvantage stacked against the DAO, participation broke records, with 1,8M total voting power expressed. That is not a defeat for decentralization. It is the opposite of apathy, and that is exactly what a healthy DAO should look like,” he said.
https://t.co/yKegmUERIn
— Marc ”七十 Billy” Zeller (@Marczeller) December 26, 2025
Another prominent figure who commented on this governance proposal was Wintermute’s co-founder and CEO, Evgeny Gaevoy, a disclosed AAVE investor. Gaevoy highlighted “a clear expectation mismatch between AAVE Labs and a significant number of AAVE token holders” in many areas.
Also, he disagreed with the forum proposal “as it stands now,” explaining it requires further elaboration to become feasible. Therefore, Wintermute and Evgeny Gaevoy voted and advocated for “NO,” the winning outcome.
“It makes no sense to commit to a course of action without knowing the specifics. It’s far from obvious how the entity owning the front end and brand would be governed, whether it would be for profit or not, and whether it would actually guarantee value accrual to token holders.”
Disclosures first (as should be customary). Wintermute (ventures) has been an investor in AAVE since 2022. We also have participated in governance and it is a decent part of our venture portfolio. I personally hold AAVE as well. Neither me personally, nor Wintermute have exposure…
— wishful_cynic (@EvgenyGaevoy) December 25, 2025
Interestingly, on the same day of this reported proposal being refused, another relevant Ethereum DeFi protocol, Uniswap, approved a long-awaited governance proposal. On Dec. 25, the DAO voted in favor of the UNIfication overhaul, approving 100 million UNI Burn and activating the fee switch.
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Vini Barbosa has covered the crypto industry professionally since 2020, summing up to over 10,000 hours of research, writing, and editing related content for media outlets and key industry players. Vini is an active commentator and a heavy user of the technology, truly believing in its revolutionary potential. Topics of interest include blockchain, open-source software, decentralized finance, and real-world utility.
Vini Barbosa on X
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Uniswap Implements UNIfication for a Deflationary Future
Uniswap’s governance has embraced a significant transformation by overwhelmingly approving the “UNIfication” proposal, marking a shift towards a deflation-focused economic model. Uniswap founder Hayden Adams announced on X that the approval has garnered a staggering 99.9% support. This decision introduces the “fee switch” mechanism to redirect part of the transaction fees from liquidity providers back to the protocol, thereby reducing the supply of UNI coins through burning. Moreover, the ruling encompasses the redirection of net sequencer fees from Unichain into this burning system.
Contents
Deflationary Focus in Fee Flow with UNIfication
Upcoming Burn of 100 Million UNI Coins
Deflationary Focus in Fee Flow with UNIfication
The UNIfication proposal reimagines the fee distribution within the Uniswap protocol. Previously, all transaction fees went to liquidity providers, but now a portion is redirected to the protocol’s treasury, continuously used for burning UNI coins. Additionally, net sequencer fees from Unichain will be transferred to the burning mechanism. As the protocol’s usage increases, the amount of UNI burned will rise, thus decreasing the altcoin‘s circulating supply over time.
The voting results highlighted the strong consensus in governance. According to Adams’s data, over 125 million coins voted “yes,” while only 742 coins opposed. Both Uniswap Labs and the Uniswap Foundation jointly proposed this in November.
The regulatory challenges from the SEC during Gary Gensler’s period brought significant changes for Uniswap, making DeFi a crucial bridge to mainstream adoption. Adams envisions that the Uniswap protocol can be the “primary address” for coin transactions, viewing this approach as laying the groundwork for growth in the upcoming decade.
Upcoming Burn of 100 Million UNI Coins
Following the approval, a two-day timelock will be initiated. After this period ends, the protocol will burn 100 million UNI. The burn amount aligns with the estimated volume that could have been achieved if the “fee switch” had been active since the coin launch. This new model makes the initially projected deflationary concept retroactively visible.
The proposal goes beyond just fee flow and burning, aiming for operational consolidation too. It plans the transfer of Uniswap Foundation teams and responsibilities to Uniswap Labs. Fees from Uniswap Labs’s interface, wallet, and API services will be abolished. Additionally, a UNI-financed annual growth budget for protocol development and ecosystem expansion is included in the package.