Uniswap Labs has permanently burned 100 million UNI tokens valued at roughly $600 million, marking a major shift in the protocol’s economic design.
The burn was executed on December 27 as part of the on-chain implementation of the UNIfication governance proposal.
The initiative formally links Uniswap’s protocol revenue to the value of the UNI token through a buy-and-burn mechanism.
UNIfication was introduced in November 2025 and received overwhelming approval from governance voters on December 25.
Under the new structure, a portion of protocol fees will be used to repurchase and permanently remove UNI from circulation.
The change represents a move toward a deflationary token model rather than pure governance utility.
On Uniswap v2, liquidity providers continue to earn 0.25% per trade, with 0.05% now directed to the protocol.
On Uniswap v3, liquidity providers route either one-quarter or one-sixth of fees to the protocol, depending on the fee tier selected.
Supporters argue that repeated fee-funded burns could steadily reduce circulating supply over time.
Reduced supply, they say, may increase scarcity and align long-term incentives between users, liquidity providers and token holders.
The governance proposal also restructures parts of Uniswap’s organisational framework.
Employees of the Uniswap Foundation are transitioning into Uniswap Labs as part of the consolidation.
Funding for the transition will come from the protocol’s treasury growth fund.
Uniswap Labs said the move is intended to streamline development and operational execution.
The firm framed the restructuring as necessary to support the protocol’s expanding ecosystem.
Uniswap Labs also indicated that additional revenue mechanisms could be proposed in future governance votes.
Potential sources include protocol fees on layer-two networks and upcoming products.
These may include Uniswap v4, UniswapX, PFDA and aggregator hooks.
Market reaction to the burn and governance execution was immediate.
UNI rose more than 6% following confirmation of the burn.
The token reached a multi-week high of approximately $6.38 at the time of reporting.
Analysts said the price move reflected renewed confidence in UNI’s evolving economic model.
Uniswap remains the largest decentralised exchange in the crypto sector by trading activity.
The protocol operates across more than 40 blockchain networks globally.
Data shows Uniswap processed over $60 billion in trading volume during the past month.
At the time of reporting, Uniswap price was $6.19.