Uniswap Community Greenlights Two Governance Proposals to Propel Unichain Network and Uniswap V4 Protocol Growth

The initiatives, dubbed "Uniswap Unleashed," introduced a new grants program and liquidity incentives

The Uniswap community has approved two crucial governance proposals, setting the stage for the next chapter of the Unichain network and Uniswap V4 protocol.

These initiatives, collectively known as "Uniswap Unleashed," aim to introduce a new grants program, provide liquidity incentives, and potentially activate a "fee switch," gradually shifting a portion of trading fees to UNI holders.

The proposals, which ultimately passed with more than 80% of UNI token holders in favor, focused on two key aspects:

1. Grants Budget and Non-Commercial Grant Program:

The foundation requested $95.4 million for its grants budget and $25.1 million for operations over two years. This budget will be used to fund a non-commercial grants program, aiming to integrate new chains and protocols into the Unichain network.

2. Liquidity Incentives and New Chain Integration:

The proposals also included $45 million for liquidity incentives to attract users and fuel ecosystem growth through developer campaigns. These initiatives will be critical in expanding the reach and utility of the Uniswap protocol.

The proposals, which can be viewed in full on the Uniswap governance portal, also hinted at the possibility of a "fee switch," a hotly debated topic within the community.

The foundation's request for a legal entity status is a crucial step towards enabling the switch, which would see a portion of protocol revenue, currently exceeding $1 billion annually, paid out to UNI holders.

This initiative, which began with a proposal in July 2021 to pilot the switch for a small set of Uniswap protocol pools, has been met with mixed reactions. While some, like the DeFi Alliance founders, expressed support, others, like the token holder "Roken", voted against it, ultimately leading to its failure in 2023.

The proposal's passage could now put into motion the long-awaited fee-switch, which would see a small portion of the revenue currently paid out to liquidity providers (LP), or users who lock up their tokens on Uniswap in exchange for fee rewards, go to UNI holders instead.

However, this would come at the cost of smaller fee earnings for LPs and potentially higher gas fees for users due to the activation of a new legal entity.

The foundation stated its intent to use this status to actively seek out and vet proposals for integrating other protocols and chains, a move that could be interpreted as an opening move towards the fee switch.

"If our vetting is successful and we believe the creation of a legal entity for Uniswap Governance is in its best interest, we would propose to Governance to implement a legal entity structure," the proposal elaborated.

"If adopted, this step would pave the way for the potential introduction (or re-introduction) of a governance proposal for delegators to earn Protocol revenue," it concluded.