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

article-image

Source: DALL·E

share

key takeaways

  • 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.

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.”

Read more: The Investor’s Guide to Impermanent Loss


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

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.

recent research

kamino cover.jpg

Research

Kamino has solidified its position as the leading money market on Solana and is emerging as a DeFi bluechip. Although DeFi competition is fierce, Kamino has kept iterating on its product to provide the best-in-class UX, paired with a robust risk management framework and battle-tested infrastructure. Given the rollout of Kamino Lend V2, the protocol may scale aggressively over the coming months, penetrating previously untapped markets in Solana DeFi.

article-image

Why that the bull market might not start until 2025

article-image

August’s annual headline figure came in at 2.3% after an upward revision Thursday, so things are moving in the right direction 

article-image

MSTR’s stock price was roughly $248 at 2 pm ET Thursday

article-image

Ever since rates came off zero and fiscal deficits exploded, markets have started paying close attention to how the government is funding itself

article-image

Solana memecoins are collectively at an all-time high

article-image

Optimistic rollups like Optimism, Arbitrum and Base are seeing rapid adoption relative to zk rollups