Uniswap Vote to Broaden Fee Switch Sends UNI Higher

Proposed fee switch upgrade may raise UNI burn revenue to nearly $60M annually if trading volumes remain stable.

Uniswap’s governance process has reignited interest in UNI after months of weak price action. A new proposal to expand protocol fee capture across multiple networks has shifted focus back to token economics. Traders reacted quickly, pushing UNI sharply higher in the past day.

Uniswap Governance Vote Aims to Broaden Fee Switch to More Networks

Uniswap announced a governance vote to expand its fee switch to additional layer-2 chains. If approved, the proposal would activate protocol fees across eight additional networks and replace the pool-by-pool model with a tier-based v3 structure.

Under the current setup, governance has to manually enable fees for individual pools. With the new system, fees would automatically apply to all v3 pools based on their fee tier. That removes the need to approve pools one by one.

A fee switch means a small portion of trading fees, which usually go to liquidity providers, is redirected to Uniswap’s treasury. Captured revenue funds UNI buybacks and token burns, linking platform trading activity directly to UNI supply reduction.

Since Uniswap turned the fee switch back on last year, it has burned over $5.5 million worth of UNI. At the current pace, that amounts to about $34 million per year spent buying back and burning UNI.

Estimates suggest the proposed expansion could add roughly $27 million more per year. That would bring total annual fee income close to $60 million if trading volumes hold steady.

Uniswap’s proposal is divided into two on-chain votes because of transaction size limits. Part of the change involves updating smart contract ownership. The V3 Factory would be controlled by a new adapter contract.

On the other hand, V2 trading fees would be sent to a specific treasury address called the TokenJar. Ownership of key contracts across v2, v3, and v4 would also be moved to a CrossChainAccount that manages them across different networks.

If approved, protocol fees would automatically apply to all new v3 pools. Governance would no longer need to manually turn fees on for each pool. That makes the system more automatic and easier to manage.

UNI Token Rallies 15% Following Announcement

In Q1 2026, Uniswap reported a gross profit of about $3.12 million, according to DeFiLlama data. Earlier periods generated high trading volumes but almost no retained profit. Since reactivating the fee switch, part of trading activity is now being converted into treasury income and UNI token burns.

UNI’s price rose because investors are responding to the prospect of more revenue being shared through token burns. Before this news, UNI had been falling along with the wider crypto market.

After the governance vote was announced, the token jumped more than 15% in one day. Market recovery also helped, as Bitcoin rose about 5% and Ether gained around 8%.

Traders are now watching the $4.80 level as the next key resistance. If buying pressure continues, some expect a move toward $6. In the short term, price will depend on continued demand and overall market strength.

For years, Uniswap handled large trading volumes but did not generate real income for UNI holders. Most fees went only to liquidity providers. Now, Uniswap is starting to keep part of those fees.

If the governance vote passes, the protocol will collect fees across multiple blockchains. That means UNI burns would be tied to total trading activity across all supported networks.