Leading decentralized finance (DeFi) protocol Uniswap has introduced a governance proposal to implement a protocol fee at 1/5th of the pool fee. The proposal in question is anticipated to lead to a whopping $52 million in accumulation in 6 months as the earned fees would be exchanged for a UNI community-designated asset.
The world’s leading on-chain and financial metrics, charts, data, and insights provider for Bitcoin and digital assets, Glassnode, took to Twitter to break the news:
Uniswap, the leading DeFi protocol, introduced a governance proposal to implement a protocol fee. This proposal suggests setting the fee at 1/5th of the pool fee, which is projected to accumulate a substantial $52M in 6 months, where fees earned are exchanged for an asset… pic.twitter.com/EqrNBZkgVj
— glassnode (@glassnode) May 19, 2023
Uniswap also recognized the legal and tax implications of the community. So, a subsequent plan for effective management and distribution of the treasury-generated revenue is also proposed.
At press time, Uniswap’s native UNI token is trading at $5.34, with a market capitalization of $3,087,178,438 and a 24-hour trading volume of $41,186,307, as per CoinMarketCap (CMC).
The protocol fee is proposed to be implemented across all Uniswap v3 pools, whilst turning the fee switch for Uniswap v2 on. The proposal’s scope involved implementing a fee for Uniswap pools, via a system to claim earned fees, and sell the fees earned for an asset designated by the UNI community in a trustless setup. In a suceeding proposal, the UNI community would be able to decide the management, allocation, distribution, or utilization of the treasury-accrued assets.
As per Uniswap, the reason to turn on fees is to prove that the protocol could deliver healthy revenues, as the DEX is now in a better position. Notably, the only major exchange that pays Makers or Liquidity Providers (LP) is Uniswap. After setting the fee, the accrual of the protocol fees would start. Uniswap’s governance page also said that claiming the fees would require the factory owner to call the collectProtocol function(address, amount, amount).
