The Uniswap token has seen a notable increase of over 38% owing to a new proposal from the Uniswap Foundation and Uniswap Labs focusing on a protocol fee switch and burning mechanism aimed at enhancing the value of UNI.

The proposed “UNIfication” includes incentives such as activating a protocol-level fee to burn UNI tokens and establishing a Protocol Fee Discount Auctions system to improve returns for liquidity providers, according to a joint statement released on Monday. They intend to burn 100 million UNI, equating to approximately 16% of the current circulating supply, which could have a positive effect on the supply and demand dynamics for UNI, a governance token for the Uniswap decentralized exchange.

The fees accrued from Uniswap’s Ethereum layer 2, Unichain, which has generated $7.5 million in fees in its first nine months, will also contribute to the UNI burn mechanism.

“We believe this proposal positions the Uniswap Protocol to win as the default decentralized exchange for tokenized value,” stated the Uniswap Foundation.

UNI Token Sees a Boost of Nearly 40%

The price of UNI soared by approximately 38.5% to $9.70 following this announcement, providing a necessary boost compared to other cryptocurrencies like Bitcoin and BNB. As of now, UNI’s market capitalization has surpassed $6 billion, placing it as the 34th largest cryptocurrency.

Uniswap is the leading decentralized exchange, having processed around $4 trillion in total trading volume since its launch in November 2018.

Uniswap’s Focus on Protocol Development

The Uniswap Foundation describes the UNIfication initiative as the beginning of a new phase for the protocol, emphasizing ongoing support for decentralized finance builders and plans to distribute 20 million UNI tokens as part of a Growth Budget to channel further growth and development in the ecosystem each quarter.

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