Uniswap Reduces Token Supply by $596M Following Fee Switch Approval

TLDR

• Uniswap burns 100 million UNI tokens worth $596M after successful governance vote.
• UNI token supply reduced to 730 million after Uniswap executes a major burn.
• Uniswap’s fee switch proposal passed with nearly 99.9% support from stakeholders.
• The Uniswap Foundation sets aside 20 million UNI tokens for ecosystem growth.

On December 28, 2025, Uniswap executed a major token burn, permanently removing 100 million UNI tokens from circulation, valued at around $596 million. This move follows the approval of the “UNIfication” fee switch proposal, which passed with overwhelming support from Uniswap’s governance community. The implementation of this decision marks a significant event in the protocol’s history, as it directly impacts the circulating supply of UNI tokens.

The proposal, which garnered nearly 99.9% support from UNI token holders, activated fees across Uniswap’s v2 and certain v3 pools on the Ethereum mainnet. In addition, interface fees charged by Uniswap Labs were set to zero, reflecting a move towards lowering the cost burden on users. Fees generated on Unichain will also contribute to future UNI burns, after covering operational costs.

Uniswap’s Successful Fee Switch Proposal

The “UNIfication” proposal was approved after gaining broad support from the Uniswap community. A total of more than 125 million UNI tokens were cast in favor of the proposal, with only 742 tokens voting against it. This consensus reflected the alignment of major stakeholders within the ecosystem. Key figures in the crypto space, including Jesse Waldren from Variant and Kain Warwick from Synthetix, supported the proposal, ensuring its successful passage.

Uniswap Labs confirmed the token burn and the activation of the fee switch, marking the first large-scale implementation of the governance decision. The removal of 100 million UNI tokens has permanently reduced the circulating supply, decreasing it to approximately 730 million UNI out of a total supply of 1 billion.

Impact of UNI Burn on Token Value

Following the burn, UNI’s price saw an increase of over 5%. This price jump reflects positive market sentiment surrounding the successful execution of the burn and the fee switch. According to data from CoinMarketCap, UNI’s market capitalization and trading volume also rose significantly in the 24 hours after the burn. The reduced token supply is likely seen as a deflationary action, potentially benefiting long-term token holders by increasing the scarcity of UNI.

The token burn also aligns with Uniswap’s ongoing strategy to make the token more valuable by reducing its total supply. By removing 100 million UNI tokens from circulation, Uniswap aims to increase the scarcity of UNI, which could have a lasting impact on its market performance.

Uniswap Foundation’s Growth Budget

In addition to the UNI burn, the Uniswap Foundation announced plans to allocate 20 million UNI tokens to create a new Growth Budget. This budget will support further development and expansion within the Uniswap ecosystem. The allocation of these tokens underscores the foundation’s commitment to funding ecosystem growth while maintaining its focus on supporting developers.

The Uniswap Foundation reiterated its ongoing efforts to back protocol development and ensure that the ecosystem continues to grow and innovate. The move reflects the foundation’s strategy to strengthen its position within the decentralized finance space.

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