Uniswap founder Adams: Enabling protocol fees to destroy UNI

Author: Hayden Adams, Founder of Uniswap; Translated by: Jinse Finance

Today, I am thrilled to represent Uniswap, together with Devin Walsh (Executive Director and Co-founder of the Uniswap Foundation) and Ken Ng (Head of Research and Co-founder of the Uniswap Foundation), to submit my first proposal to the Uniswap governance team.

This proposal will enable protocol fees and align all incentives within the Uniswap ecosystem.

For the past eight years, Uniswap has been a cause to which I have poured all my passion and energy.

What began as a small side project has grown into a global financial infrastructure, powering thousands of applications and handling $1.8 trillion in annual transactions. Launched in 2020, UNI has seen Uniswap Labs unable to truly participate in Uniswap governance and severely limited in creating value for the Uniswap community for the past five years. This is changing today! This limitation was largely due to a poor regulatory environment, costing thousands of hours and tens of millions of dollars in legal fees. Fortunately, the regulatory environment has changed. This proposal stems from a strong desire to see the Uniswap protocol finally become a global decentralized tokenized value exchange. Overall, the proposal: Enables protocol fees and uses them to burn UNI tokens; Sends Unichain sequencer fees to the UNI burn address; Burns 100 million UNI tokens from the vault, representing protocol fees that would have been burned if the fee mechanism had been enabled at token issuance; Introduces a protocol fee discount auction, a new way to improve liquidity provider (LP) returns and internalize the maximum extractable value (MEV); Introducing an "aggregator hook" to transform Uniswap v4 into an on-chain aggregator for collecting protocol fees from external liquidity sources; Labs is committed to driving protocol growth and adoption, including signing a contract promising to only undertake projects aligned with Uniswap governance interests. As part of this, Labs will cease charging fees for its interface, wallet, and API to significantly promote the distribution and adoption of the Uniswap protocol; Transferring foundation staff to Labs to jointly accelerate protocol development, funded by foundation grants; Transferring governance-held Unisocks liquidity to Unichain v4 and burning LP positions. I believe the Uniswap protocol can become a major platform for token trading. This proposal lays the foundation for its development over the next decade. Over the next few years, Uniswap will continue to release new features and provide strong support for developers, LPs, and traders building on its foundation. I am very grateful to the community that made all of this possible and I am excited about the future.

Translator's Note: On November 11th, Devin Walsh, Executive Director and Co-founder of the Uniswap Foundation, announced that he and Uniswap founder Hayden Adams had jointly proposed a governance proposal to launch protocol fees and unify incentive mechanisms across the entire Uniswap ecosystem. After the proposal was announced, UNI briefly broke through $9, reaching $9.27 at one point, a 24-hour increase of over 37%.