The Uniswap token: From governance rights to value booster thanks to UNI burning

The Uniswap (UNI) token is undergoing a transformation. Originally, this type of token was intended to give users a say in the protocol, but now it also has direct economic value. This is happening because the platform has decided to use a portion of its fees to remove tokens from circulation. This is big news for anyone who understands what a token actually does in the DeFi ecosystem.

Massive support for the UNI burn initiative

The decentralized exchange platform Uniswap recently submitted a groundbreaking proposal called “UNIfication.” This proposal received overwhelming support: over 125 million votes in favor, compared to just 742 against, over a period of five days. This voting result shows how united the Uniswap community is behind this change.

The proposal includes two significant elements. First, protocol fees are activated — Uniswap will now retain a portion of the trading fees paid by investors. Second, the platform will use these earnings to buy back and burn UNI tokens, meaning these tokens will be permanently removed from the supply.

Why is this token burn plan so important?

To date, Uniswap has already been a huge trading platform. The platform processes an average of about $2 billion in trading volume per day and generates approximately $600 million in fees per year. This money has always gone directly to liquidity providers — the investors who supply the funds that others can exchange.

With the new proposal, this model changes fundamentally. A portion of these fees will now go to a mechanism that will burn Uniswap tokens. This creates a direct link: the more transactions that occur on Uniswap, the more tokens are burned, reducing the total supply and potentially increasing the value per remaining token.

Moreover, Uniswap announced that it will burn a full 100 million UNI from the treasury retroactively — as if it had been collecting these fees for years since its founding in 2018. This represents revenues worth over ( dollars at current prices.

Market reaction and current token value

In the immediate aftermath of this announcement, the UNI token showed volatility. The current price of UNI is $3.92, down 4.88 percent in the past 24 hours. This deviates from previous levels, demonstrating how dynamically the market reacts to fundamental changes in tokenomics.

What is more significant is the bigger picture: Uniswap is transforming from a purely governance mechanism into a token that directly benefits from the success of the protocol. This means that anyone holding UNI tokens is now effectively a shareholder in a profitable trading platform, rather than just having voting rights.

For those wondering what a token actually entails in this context: a token is a digital asset that represents ownership, voting rights, or claims to value. In the case of UNI, this is now much clearer: the token promises future value as Uniswap generates more trading volume.