Uniswap’s “Activate Uniswap Protocol Governance” proposal has received overwhelming support on Snapshot, with 100% approval. The proposal aims to allocate protocol fees to UNI token stakers, which has resulted in a rapid surge of over 20% in the UNI token price, breaking the $17 mark. The on-chain voting for this proposal will officially begin tomorrow.
Background:
Why did UNI skyrocket? Uniswap generates $2 million in daily fees, with estimated staking rewards of 5% in the future.
Summary:
– “Activate Uniswap Protocol Governance” proposal overwhelmingly passed.
– UNI surged over 20%, surpassing $17.
– Proposal content: Allocate protocol fees to UNI stakers.
– Estimated annual return rate is between 1.8% and 4.4%.
– Uniswap Foundation Governance Lead, Erin Koen, initiated the proposal on February 23.
– The community poll for the proposal was conducted on the Snapshot platform on March 1, and the results were announced today, with 100% approval from 2,485 voters, representing 55 million UNI. This voting has been Uniswap’s most active one recently.
– The on-chain voting for the proposal will officially begin on March 8.
Encouraged by this information, Binance Spot data shows that UNI surged over 20% last night, reaching a high of $17.05, the highest since January 2022. It has slightly retraced to $14.918 at the time of writing, an increase of 8.79% in the past 24 hours and a 38.4% increase in the past 7 days.
Earlier reports mentioned that the “Activate Uniswap Protocol Governance” proposal’s main vision is to distribute “protocol fees” to UNI token holders who have staked or delegated their UNI tokens. The proposed changes include:
– Upgrading Uniswap Protocol Governance to enable permissionless and programmatic collection of protocol fees.
– Distributing any protocol fees proportionally to UNI token holders who have staked or delegated their voting rights.
– Continuing to control core parameters: which pools require fees and the fee amounts.
According to the proposal, “protocol fees” refer to a portion of the fees collected from liquidity providers (LP), with the ratio set at 0, 1/4, 1/5, 1/6, 1/7, 1/8, 1/9, or 1/10. Currently, the ratio is set at 0, meaning all fees generated by Uniswap are fully allocated to liquidity providers. The adjustment of this ratio can be decided through community governance.
A rough estimate of the annualized return for staking UNI is provided. According to the latest data from Token Terminal, Uniswap generates approximately $1 billion in annual fees. Assuming the proposal passes and 1/10 to 1/4 of the LP fees are allocated as protocol fees to UNI stakers, UNI stakers can receive an annual dividend of approximately $100 million to $250 million. Currently, UNI’s market capitalization is around $11.3 billion. Assuming half of the market value of UNI is staked, the staking scale would be $5.65 billion, resulting in an annualized return rate ranging from 1.77% to 4.42%.
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