Uniswap Token Holders Will Receive Fees From Exchange If Proposal Approved

Key facts:
  • The proposal must go through a system of 3 voting processes.

  • If approved, Uniswap’s liquidity providers would see their profitability reduced.

Uniswap, the largest decentralized exchange (DEX) in the decentralized finance (DeFi) ecosystem, is voting on a proposal to give dividends to holders of its UNI governance token.

The proposal, called an “exchange fee” will take 10% of the commissions generated by liquidity providers in two specific pools: ETH/USDC and USDC/USDT. Those who invest in these instruments charge commissions of 0.05% and 0.01% respectively.

The exchange commission is in the source code of Uniswap since version V2 (currently there is V3) however it was never activated. The proposal It already has more than 3.5 million votes in favor, of which 99% have been issued by a single address. Only 54 votes against have been cast.

One risk of this proposal, which was discussedis if this eliminates incentives for Liquidity providers to remain, taking into account that they will see their profitability reduced by 10%.

It should be noted that Uniswap is the platform that more commissions you receive, in total, within the entire DeFi ecosystembeing its V3 within the main network of Ethereum the most used.

At the moment, the vote is in its first stage. In the Uniswap governance system each proposal must go through 3 stages of voting. The first and second only require a minimum of 25,000 and 50,000 votes in favor to be approved. Each voting process is individual. However, the one that will represent a real challenge will be phase 3, which requires more than 40 million votes for its approval.

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