Uniswap's (UNI) landmark governance proposal has cleared the required 40 million vote threshold.
The "UNIfication" proposal will activate the protocol's fee switch and burn 100 million UNI tokens from the treasury.
As of Monday, approximately 62 million votes supported the measure with less than 1,000 against.
Voting closes December 25, followed by a two-day timelock before implementation.
UNI has rallied 25% since voting began on December 20.
The token traded around $6.08, recovering from a month-long decline.
Uniswap's market capitalization stands at approximately $3.8 billion.
What Happened
The governance vote marks the first time Uniswap will directly link protocol revenue to token economics.
The fee switch redirects a portion of trading fees from liquidity providers to protocol-controlled mechanisms.
These fees will fuel a programmatic token burn system.
The immediate burn of 100 million UNI from the treasury aims to compensate holders for years without value accrual.
This reduces circulating supply from 629 million to 529 million tokens.
The proposal also introduces a Protocol Fee Discount Auction system.
Unichain sequencer fees, minus operational costs, will also feed the burn mechanism.
Uniswap Labs will drop frontend fees to zero while governance allocates a 20 million UNI annual growth budget.
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Why It Matters
Since launching in 2018, Uniswap has processed over $4 trillion in trading volume.
Despite this dominance, UNI holders have lacked direct exposure to protocol revenue.
The fee switch debate has persisted for years, stalled by regulatory uncertainty and governance conflicts.
Recent legal reforms and adoption of Wyoming's DUNA framework addressed liability concerns.
Token burns create deflationary pressure by permanently removing supply from circulation.
This mechanism directly ties protocol activity to token scarcity.
The vote represents broader DeFi trends toward sustainable token economics and clearer value capture for holders.
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