Uniswap Proposal “Activating Uniswap Protocol Governance” Receives 100% Approval on Snapshot, Triggering a 20% Surge in UNI Token Price, Breaking $17. The on-chain voting for the proposal will officially begin tomorrow.
(Background: Why did UNI surge? Uniswap daily transaction fees reach $2 million, estimated staking rewards at 5%.)
Summary:
– Uniswap Foundation governance lead Erin Koen initiated the governance proposal “Activating Uniswap Protocol Governance” on February 23. The proposal aims to distribute protocol fees to UNI token stakers, resulting in a rapid 53% surge in UNI token price and an overall increase in the DeFi sector.
– On March 1, the proposal conducted a community sentiment survey on the off-chain governance platform Snapshot. The results, announced early this morning, showed an overwhelming 100% approval with 2,485 voters participating, and the supporting votes reaching 55 million UNI tokens. This was the most active voting event for Uniswap recently.
– Subsequently, the on-chain voting for the proposal will commence on March 8.
Motivated by this news, Binance spot data shows that UNI surged over 20% last night, reaching a high of $17.05, the highest since January 2022. Prior to the deadline, it slightly retraced to $14.918, representing an 8.79% increase in the past 24 hours and a 38.4% increase in the past 7 days.
Earlier reports stated that the “Activating Uniswap Protocol Governance” proposal’s main vision for protocol upgrades is to distribute “protocol fees” to UNI token holders who stake and delegate their UNI tokens. The proposed changes include:
– Upgrading Uniswap protocol governance to enable permissionless and programmatic collection of protocol fees.
– Proportionally distributing any protocol fees to UNI token holders who stake and delegate their voting power.
– Maintaining control over core parameters: which pools require fees and the fee size.
According to the proposal explanation, “protocol fees” refer to a portion of the fees generated from liquidity providers (LP). The distribution ratio can be set at 0, 1/4, 1/5, 1/6, 1/7, 1/8, 1/9, or 1/10, with the current ratio set at 0. Adjustments to this ratio can be determined through community governance.
A simple estimation of the staked UNI’s annualized return rate can be made. Based on Token Terminal’s latest data, Uniswap’s annualized fees amount to around $1 billion. Assuming the proposal passes and 1/10 to 1/4 of LP fees are allocated as protocol fees to UNI stakers, UNI stakers can receive approximately $100 million to $250 million in annual dividends. With UNI’s current market cap of around $11.3 billion and assuming half of the market cap is staked, the staking scale would be $5.65 billion, resulting in an estimated annualized return rate between 1.77% and 4.42%.
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