Uniswap Considers Move To Reward Token Holders With Fee Switch

Twitter icon  •  Published 10ヶ月前  •  Nikolas Sargeant

If fees were introduced on the pools, the Uniswap protocol could increase its treasury and offer rewards to holders of the native token, Uniswap (UNI)

Uniswap is considering implementing fees for some of its liquidity pools. This aims to direct funds toward the protocol's treasury and token holders.

The community members of DEX Uniswap are discussing a proposal to activate fees for most of its liquidity pools. The proposal is part of a discussion on Uniswap's protocol fees and finances.

If fees were introduced on the pools, the Uniswap protocol could increase its treasury and offer rewards to holders of the native token, Uniswap (UNI). This would be a way of incentivizing users and providing benefits to stakeholders.

Uniswap has decided to start charging fees on a significant portion of its v3 liquidity pools and all of its v2 pools. This move could potentially pave the way for other DeFi platforms to do the same. Uniswap currently holds approximately 70% of the DeFi market share.

In a recent interview with CoinDesk, Getty Hill, the co-founder of GFX Labs, spoke on the proposal “If Uniswap can monetize and bring in all these dollars by building a really great open-source protocol that gets usage then that will incentivize other folks to do this too,” he went on to say that “I’m hopeful that this kind of changes some of those industry norms.”

According to DefiLlama data, Uniswap v2 has accumulated almost $1.2 billion in total value locked, with a daily volume averaging around $367 million on Ethereum in the past week. Uniswap v3, on the other hand, is deployed on several networks like SushiSwap, Curve, Balance, and PancakeSwap, and has a total value locked of approximately $2.9 billion.

The procedure for collecting fees, the allocation of those fees, and the projects that the tokens would support are all subjects of debate. Hill stated that the community would discuss and finalize these details before the proposal goes to a formal vote. Activating fee switches for Uniswap liquidity pools is not a new concept for community members. In the past, a proposal to enable fees caused friction among the Uniswap community. However, it ultimately didn't gain the necessary support due to concerns that the move could have significant tax implications.

Author

Nikolas Sargeant

Nik is a content and public relations specialist with an ever-growing interest in Crypto. He has been published on several leading Crypto and blockchain based news sites. He is currently based in Spain, but hails from the Pacific Northwest in the US.