Uniswap News Today: Uniswap Votes to Activate Fee Burn, Fueling UNI Surge

Uniswap (UNI) is making waves as the community prepares to vote on a landmark proposal that could reshape the token's value model. The proposal, known as "UNIfication," aims to activate protocol fees for the first time and establish a permanent mechanism to burn UNI tokens. If approved, the proposal will redirect swap fees into the token's burn mechanism, tying UNI's supply reduction to protocol usage.

The vote, set to conclude on December 26, has already garnered nearly 100% support in initial voting trends. Uniswap founder Hayden Adams has urged token holders to vote ahead of the Christmas holiday deadline, highlighting the importance of aligning the protocol's long-term strategy with governance. The proposal also consolidates operational responsibilities under Uniswap Labs and eliminates fees on the protocol's interface, wallet, and API products.

Uniswap's native token has been on a sharp upward trajectory, with UNI surging over 10% in the past week alone. The price reached $6.21 as of December 21, fueled by growing optimism around the proposal and accumulating positions by major whale investors. A prominent whale has opened a $1.18 million leveraged long position at $4.99, signaling bullish sentiment ahead of the vote.

Why the Standoff Happened

For years, Uniswap operated without collecting protocol fees, a move that left liquidity providers bearing the full cost of swap fees. The absence of a fee switch was partly attributed to regulatory uncertainty and legal challenges, especially under former SEC Chair Gary Gensler's administration. However, with the regulatory landscape evolving, the community is now poised to unlock a new value mechanism that could boost UNI's scarcity and price.

Under the proposal, a retroactive burn of 100 million UNI tokens would be executed if the vote passes. This action would reduce the circulating supply from 629 million to 529 million tokens, marking a significant economic shift for the protocol. The burn is meant to reflect fees that could have been captured had the mechanism been in place since Uniswap's launch.

How Markets Reacted

Market participants are closely watching the outcome of the vote, which could influence both short-term volatility and long-term token economics. Whale accumulation and short-position reversals have already reshaped UNI's risk profile. The largest UNI short exposure held by the Shanzhai Short Army Vanguard has dropped by over 30%, with unrealized gains exceeding 410% as of late December 20. The shifting sentiment indicates a potential bullish bias as the vote nears.

In addition, Uniswap's governance proposal has sparked optimism across the DeFi space. The protocol has been one of the best-performing decentralized exchanges in 2025, generating nearly $100 million in monthly fees and over $1 billion in total fees year-to-date. The activation of the fee switch is expected to formalize a sustainable funding model for protocol development, supported by ongoing UNI burns and growth budgets.

What Analysts Are Watching

Analysts are paying close attention to how the new token economics interact with broader market conditions. UNI's price has remained below key moving averages, including the 50-day and 200-day Exponential Moving Averages, which point to an ongoing bearish trend. However, the Moving Average Convergence Divergence (MACD) indicator has shown signs of a potential reversal, with the blue MACD line nearing the red signal line.

If the MACD line crosses above the signal line and the Relative Strength Index (RSI) breaks above 50, it could indicate a turning point for UNI. A close above the 50-day EMA at $6.10 might signal a stronger uptrend toward the 200-day EMA at $7.38. These technical indicators, combined with the governance vote outcome, could determine the token's near-term direction.

Meanwhile, Uniswap's structural reorganization is also drawing attention. The shift of operational responsibilities from the Uniswap Foundation to Uniswap Labs under a legally binding services agreement aims to ensure that protocol growth remains the primary focus. This move is supported by a 20 million UNI annual growth budget, to be distributed starting in 2026.

As the community finalizes its vote, the financial world is watching to see if Uniswap will redefine how decentralized protocols generate and distribute value.