Uniswap ‘Fee Switch’ Pilot Likely To Go Ahead

The pilot’s test parameters will be locked in at 1/10 or 10% of select pools

August 5, 2022 03:14 pm

Source: DALL·E

The pilot will run for 120 days if the vote passes
At the time of writing, 3 million UNI token votes have been cast in favor of implementing the pilot

A proposal to switch up fees imposed by decentralized crypto exchange Uniswap passed with overwhelming support from Uniswap’s community governance.

Meanwhile, a voting period for a so-called consensus check to launch a pilot version of the fee implementation has begun.

The pilot proposes the test parameters will be locked in at 1/10 or 10% of select liquidity pools — meaning a 10% fee would be applied to that percentage of the selected pool, the lowest portion the code permits.

Pools chosen for the pilot include 0.05% of DAI-ETH, 0.3% of ETH-USDT and 1% of USDC-ETH.

Newsletter

Subscribe to The Breakdown

Any value accrued from the pilot will remain in the protocol until the Uniswap governance agrees on where these funds should be allocated — details on the revenue’s distribution have not yet been provided.

Voting on the pilot’s implementation started on Aug. 4 and will end on Aug. 9 at 6 pm ET. As of publication, three million UNI token votes have been cast in favor of the pilot, with only 46 UNI votes against.

If passed, the public test would run for 120 days before being turned off.

Although the majority of voters favor the pilot, not all community governance members are sold on the proposal’s timing.

Brian Park, a community member that goes by BJP3333, told Blockworks that implementing the fee switch could potentially hurt Uniswap’s position in the current highly competitive DEX market.

“Despite Uniswap having this lead right now, it could very well change the next year or so,” Park said. “Curve v2, Sushi Trident, Quickswap and Shell Protocol are all developing their own concentrated liquidity AMMs [automated market makers].”

And monetizing fees right now could be a little early.

“Let’s not get so complacent with this lead where you’re now going to look to monetize fees at the expense of liquidity providers,” he said. “Dipping into their profit margin which could potentially cause them to leave at the time when the DEX [decentralized exchange] space is very competitive.”

Get the news in your inbox. Explore Blockworks newsletters:

The Breakdown: Decoding crypto and the markets. Daily.
0xResearch: Alpha in your inbox. Think like an analyst.

Tags

Newsletter

The Breakdown

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Digital Asset Summit 2026

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

buy tickets learn more

recent research

Research

Kinetiq Protocol: From LST Infrastructure to HIP-3 Deployer

Kinetiq has established itself as Hyperliquid's dominant liquid staking protocol, holding 82.5% of LST market share with $610M in TVL. The protocol is now expanding beyond its kHYPE staking core into higher take-rate verticals: iHYPE for institutional custody rails, Launch for HIP-3 capital formation, and Markets for builder-deployed perpetuals. We view Markets, launching Jan. 12, as the highest-potential product line given its mechanically scalable, activity-linked unit economics. Near-term revenue remains anchored by kHYPE's KIP-2 fee schedule (~$1.6M annualized), while Markets provides embedded optionality if HIP-3 economics normalize post-Growth Mode. KNTQ's setup is relatively clean: zero insider unlocks until November 2026, 6.2% buyback yield from staking revenue, and cleared airdrop overhang. Risks center on unproven Markets execution, declining kHYPE TVL despite ongoing incentives, and competition from Hyperliquid's native initiatives.

by Shaunda Devens