Uniswap DAO voted to activate its long-awaited fee switch, redirecting a portion of protocol revenue into a buyback-and-burn mechanism that could destroy up to 100M UNI (~$600M), while Uniswap Labs stops interface fees and the Foundation winds down.

"The fee switch will maintain the current swap fees. But it will divert between one quarter and one-sixth of those fees to a smart contract known as the token jar. Anyone who burns UNI tokens — using a smart contract called “fire pit” — would be able to withdraw an equivalent amount of crypto from the token jar. In order to compensate liquidity providers, the DAO approved development of a new feature, the Protocol Fee Discount Auction. That would “add a new source of protocol fees by internalizing MEV that would otherwise go to searchers or validators,” according to the UNIfication proposal."

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More coverage

• Uniswap DAO to activate 'fee switch,' burn almost $600m UNI token (dlnews.com)
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• [RFC] Enable 0.05% Protocol Fee on All Uniswap v3 Pools for One ... (gov.uniswap.org)
• Uniswap Proposal: An Alternative Use-Case for the Fee Switch (gov.uniswap.org)
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