Uniswap News Today: Uniswap's 100 Million UNI Token Burn Sparks 38% Rally as Deflationary Changes Transform DeFi

Uniswap's

token jumped almost 38% after the introduction of the "UNIfication" governance reform, a comprehensive plan designed to reshape the decentralized exchange’s governance and economic framework. This proposal, unveiled collaboratively by the Foundation and Uniswap Labs on November 10–11, implements protocol fees, launches a token-burning system, and brings essential teams together under a unified growth vision. The move marks a strategic pivot to increase UNI’s utility and scarcity, aligning incentives throughout the ecosystem .

This proposal reroutes trading fees from Uniswap’s

layer-2 solution, Unichain, into a UNI-burning protocol. Since Unichain’s debut nine months ago, annualized fees have already reached $7.5 million. The plan also calls for a one-time burn of 100 million UNI—about 16% of the current supply—to account for fees that would have been burned if protocol fees had been active since UNI’s 2020 inception. This deflationary measure is set to decrease UNI’s supply, which could drive up its price as demand for the governance token rises .

The proposal sets aside a 20 million UNI Growth Budget, to be distributed quarterly from 2026, supporting DeFi innovation and ecosystem growth. This budget, managed through a service provider agreement between Uniswap Labs and DUNA, ensures future projects are in line with token holder interests. Additionally, the plan migrates the original Uniswap v1 liquidity for governance-owned "Unisocks" to Uniswap v4 on Unichain and burns the LP position, permanently fixing the supply curve .

A key feature of the proposal is the launch of Protocol Fee Discount Auctions (PFDA), which lets traders compete for fee discounts while channeling maximum extractable value (MEV) into the burn process. Preliminary data indicates this could raise liquidity provider earnings by $0.06–$0.26 for every $10,000 traded—a notable improvement in a market where similar trades typically yield between -$1.00 and $1.00

. Uniswap v4 will also become an on-chain aggregator, collecting fees from outside liquidity pools using "hooks," further broadening the protocol’s revenue sources.

The UNIfication plan also introduces a major organizational change. Uniswap Labs will take over the Uniswap Foundation’s ecosystem teams, concentrating solely on protocol expansion and removing fees from its interface, wallet, and API. This adjustment is intended to boost organic protocol usage, with future revenue streams directly benefiting UNI holders. Oversight will be provided by a five-member board—including co-founders Hayden Adams and Devin Walsh—to ensure alignment with the decentralized Unincorporated Nonprofit Association (DUNA)

.

The market responded strongly, with UNI climbing to $9.70—a 38.5% rise—right after the proposal was revealed. The token’s market cap exceeded $6 billion, making it the 34th largest cryptocurrency by market value. Experts attribute the surge to the proposal’s deflationary features and Uniswap’s leading role as the top decentralized exchange, having processed $4 trillion in total volume since 2018. The burn of 100 million UNI directly addresses concerns about token dilution by targeting supply issues

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Uniswap’s leadership highlighted that the overhaul positions the protocol as the “default decentralized exchange for tokenized value,” leveraging its robust infrastructure and governance to encourage broader adoption. The proposal’s fate depends on approval from the community through a DAO vote, with supporters emphasizing its potential to cement Uniswap’s leadership in tokenized asset trading as DeFi matures

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