Uniswap Foundation Unveils Holding Amid New Fee Update

Uniswap Foundation has proposed to utilize a new fee mechanism which would still be required to pass through on-chain voting on May 31st. Before the voting and final launch of the fee mechanism, the protocol thought it wise to disclose its asset holdings. 

$41M And 730K UNI Token in Uniswap Holdings

In its publication, Uniswap revealed that as of March 31st, it held $41.41 million in fiat and stablecoins and 730,000 of the network’s native token UNI. Uniswap’s fiat cash and stables are designated for making grants and offsetting other operating activities. 

On the other hand, the UNI tokens are reserved for employee token awards. With respect to this, the Foundation stated that it committed $4.34 million in new grants during this period and disbursed $2.79 million in previously committed grants. As a response to the current activity in its ecosystem, UNI price has jumped significantly by 6.3% in the last 24 hours and it currently trades at $11.38, per CoinMarketCap data. 

Uniswap Foundation Push for Participant Incentivization With New Proposal 

Back in February, Uniswap unveiled a fee reward mechanism for UNI token holders to boost governance participation. The response that was received from its community suggested strong support for the mechanism. This was around the time when the Decentralized Finance (DeFi) protocol was faced with potential legal challenges from the US Securities and Exchange Commission (SEC). 

On a traditional basis, fees generated by Uniswap went to those liquidity providers (LPs) who supplied assets to the platform. With the new proposal, Uniswap Foundation is now planning to distribute protocol fees among staked and delegated UNI token holders. This will contribute significantly to incentivizing active participation within its ecosystem.

Meanwhile, Uniswap Labs, the developer behind the decentralized exchange has pushed back against the SEC in response to the Wells Notice that suggested potential enforcement action.

Autonomous Fee Mechanism in Uniswap V3 pools

For the new proposal, Uniswap Foundation is suggesting the utilization of autonomous fee collection and distribution in Uniswap V3 pools. 

Once the fee mechanism proposal passes the required threshold, the ownership and control of the mainnet UniswapV3Factory will experience a pivot. Precisely, it will be transferred to a newly deployed instance of V3FactoryOwner. 

It is worth noting that the current on-chain voting for the proposal is not the same one that will propel the activation of the fees. This will come at a later date.