Uniswap's UNIfication Proposal Sparks 70% Token Surge with Programmatic Burn

The UNI token surged between 35% and 70%, briefly approaching $10, after Uniswap Labs and the Uniswap Foundation jointly proposed the UNIfication initiative, which includes activating protocol fees and implementing a programmatic burn of 100 million UNI tokens, roughly 16% of the circulating supply.

This governance proposal, spearheaded by Hayden Adams, aims to align incentives by redirecting fees to a burn mechanism, similar to Ethereum's EIP-1559 deflationary model, and consolidating the Foundation's operations into Uniswap Labs for streamlined governance.

Financial implications include an estimated $140 million annual growth budget from fee redirection, with 20 million UNI allocated yearly for ecosystem development starting in 2026, while Uniswap Labs will cease charging fees on its wallet and interface products.

Market activity intensified, with Santiment reporting heightened retail FOMO, whale transactions hitting a four-year high, and the creation of the largest number of new UNI wallets in three years, indicating early institutional accumulation according to CryptoQuant data.

The proposal, if approved, marks Uniswap's most significant economic evolution since UNI's launch, potentially reshaping DeFi governance by tying fee revenue to token value and impacting liquidity provider yields and broader altcoin dynamics.