Uniswap Incinerates 100 million UNI Tokens

A total of 100 million Uniswap (UNI) has been sent to dead wallets after an approval of the ecosystem’s anticipated fee burning proposal. The estimated value of the burnt UNI stands at approximately $596 million at the current market price.

As per onchain data the burn exercise marks one of the largest deflationary moves by a decentralized finance (DeFi) protocol. The goal is to drastically reduce Uniswap’s circulating supply and maintain price stability in the crypto market.

Governance Support Signals Strong Uniswap Ecosystem Consensus

According to the announcement by Uniswap Labs on X, the move termed “UNIfication” achieved more than just burning 100 million tokens from the treasury. Other significant activities carried out included setting Labs interface fees to zero.

His indicates that Uniswap Labs will no longer charge extra fees on trades made via its official app. Fees are however activated on all v2 pools and selected v3 pools.

Meanwhile, Unichain fees will flow to UNI burn after paying for Optimism (OP) fees and Ethereum Layer-1 data costs. The remaining revenue will be used to buy and burn UNI.

Overall, this could benefit long-term Uniswap holders as the increased scarcity might trigger price surge. Additionally, it signals that Uniswap is moving closer to a “value-accruing governance token” model.

UNIfication Vote Ushers in Major Shift

Notably, the UNIfication gained massive support as over 125 million UNI tokens were cast to approve the proposal. This represents about 99.9% support from the ecosystem.

There were several notable crypto heavyweights with huge voting power in favor of the proposal. Some of these include Ian Lapham, a former engineer at Uniswap Labs, Jesse Waldren, founder at Variant, a crypto-focused venture capital firm.

It is worth mentioning that Uniswap Foundation has pledged to continue funding builders and grant programs meant for protocol development. It maintained that supporting developers remained a primary focus for the foundation.

UNI Price Surges as Market Embraces Deflation Narrative

Following the 100 million burn exercise, Uniswap has registered a spike in price. As of this writing, Uniswap exchanged hands at $6.33, which represents a 6.94% increase in the last 24 hours. The trading volume has also surged by 62.44% to $313.11 million within the same time frame.

Market participants and investors alike are optimistic that this engineered scarcity that triggered price uptick will be sustained so Uniswap can soar.