TL;DR

  • A proposal would enable fees on all version 3 pools and eight additional blockchains.
  • UNIfication facilitates quicker governance via direct Snapshot votes.
  • Cross-chain fees are routed to Ethereum for automatic UNI token burns.
  • A new tiered adapter imposes fees across pools without requiring extra votes.

Uniswap’s governance body is evaluating a proposal aimed at expanding the protocol’s fee structure to eight more blockchains and turning on fees for all remaining version 3 liquidity pools on Ethereum. The proposal is up for a vote under the decentralized exchange’s UNIfication governance framework. This process lets fee-related decisions move faster through community review while still maintaining organized on-chain execution.

The suggested expansion would enable protocol fees on Arbitrum, Base, Celo, OP Mainnet, Soneium, X Layer, Worldchain, and Zora. These networks already handle significant activity within the decentralized finance space. As a result, the expansion would create a more consistent fee model across all supported deployments.

The update also introduces a new tier-based protocol fee adapter that automatically assigns fee rates to pools based on the current liquidity provider fee tier. This structure eliminates the need for governance votes on each individual pool and lessens the operational load on UNI holders. In turn, this change simplifies the activation of fees across all version 3 deployments.

Uniswap Governance Shifts Under UNIfication Model

The UNIfication framework is a significant revamp that changed how Uniswap handles fee-related proposals. The system permits proposals involving fee parameters to skip the traditional request-for-comment phase and go straight to a Snapshot vote. This vote runs for five days, and if a measure is approved, it moves to a binding on-chain vote. Once the proposal is accepted, execution is still governed by an on-chain timelock.

The current proposal marks the first wide-ranging test of the UNIfication model. Governance contributors have stated that the new system was created to allow quicker adjustments while preserving safeguards for protocol supervision. They noted that fast governance cycles are necessary as market conditions change and adoption grows across multiple blockchains.

Hayden Adams, founder of Uniswap Labs, mentioned that the team tracked earlier fee activations on version 2 and select version 3 pools. Adams stated that those systems performed as anticipated, and expanding the fee model fits with the protocol’s long-term development strategy.

Cross-Chain Revenue Routing Back to Ethereum

The proposal establishes a formal cross-chain revenue path. Under the updated model, fees collected on non-Ethereum blockchains would be sent to chain-specific TokenJar contracts. These contracts would then bridge the funds back to Ethereum. Once on Ethereum, the funds would be used to purchase UNI tokens, which are then sent to a burn contract.

For Ethereum itself, a contract called the Firepit would manage fees from local pools. This setup supports the protocol’s usage-based burn mechanism, which cuts the supply of UNI as activity rises. Protocol contributors noted that the burn system has already worked with multiple tokens collected during the initial fee activation.

Unichain sequencer revenue already uses a similar route to send value back to Ethereum for burns. The new proposal extends this structure to more assets and networks. The design intends to merge cross-chain activity into a single economic system focused on Ethereum.

Market Effects and Structural Changes for v3 Pools

If approved, the proposal would impose protocol fees on all version 3 pools across all supported networks. This represents a structural change from the previous model, where activating fees needed separate governance votes for each pool. With the new method, all pools follow the same rules, and the tiered adapter sets fee parameters automatically.

This change could widen Uniswap’s capacity to capture value across multichain ecosystems. Governance contributors have highlighted the increase in market-adjusted total value locked on Ethereum since the first fee activation. They stated this provides early proof that the system can work at scale.

Uniswap has kept expanding its institutional presence while rolling out new features like continuous clearing auctions and support for direct trading of tokenized funds. The updated fee model would extend the protocol’s monetization structure to more users and networks.

Voting on the proposal via Snapshot ends on February 23. If it passes, two simultaneous on-chain proposals would be filed because of contract size restrictions. These proposals would divide the fee activation across networks and pools. Execution would adhere to the timelock schedule once both measures are approved on-chain.

Despite Uniswap’s announcements, the UNI token has experienced a bearish trend in the wake of the recent crypto market downturn. At the time of writing, UNI was trading at $3.36, down 1.17% from its 24-hour high.