Uniswap Burns 100 Million UNI Tokens as Fee-Burning Upgrade Goes Live

• Uniswap permanently removed 100M UNI after activating its on-chain fee-burning UNIfication upgrade.
• The UNIfication proposal passed with overwhelming support, securing over 125M votes and minimal opposition.
• UNI rebounded after the burn, with volume surging as traders reacted to the supply reduction.

Uniswap has executed one of the largest token supply reductions in decentralized finance after activating its long-awaited fee-burning upgrade, known as “UNIfication,” on Ethereum mainnet. The rollout resulted in the permanent removal of 100 million UNI tokens from the protocol’s treasury, an event that coincided with renewed volatility in UNI’s market price and trading activity.

On December 28 at approximately 4:30 a.m. UTC, Uniswap carried out the burn transaction, according to records from the Ethereum blockchain explorer Etherscan. The destroyed tokens were valued at about $635 million, marking the first large-scale supply reduction since the protocol’s fee-burning structure was approved through governance.

The UNIfication proposal cleared its governance limits with near-unanimous support. Data from the Uniswap Foundation shows more than 125 million UNI tokens were cast in favor of the upgrade, far exceeding the 40 million vote requirement. Only 742 votes were recorded against the measure, highlighting broad consensus among participating token holders.

Governance Support and Backers

Several well-known figures in decentralized finance backed the proposal, including Jesse Waldren of crypto venture firm Variant, Kain Warwick of Infinex and Synthetix, and former Uniswap Labs engineer Ian Lapham. Their voting support contributed to the major approval that enabled the fee-burning mechanism to go live on-chain.

Related: Uniswap Community Passes UNIfication Proposal With Strong Backing

The activation of UNIfication formalized a shift in how protocol fees are handled, with a portion now directed toward reducing the circulating supply of UNI rather than remaining idle in treasury holdings.

UNI Price Movement and Market Data

Following the burn, UNI recorded a 5.4% gain over a 24-hour period, recovering part of a 12% decline seen over the prior week. CoinMarketCap data shows that the token has increased by about 30% since December 18 and was trading at $6.34 at the time of reporting.

Market capitalization stood at roughly $4.56 billion, while 24-hour trading volume rose more than 43% to approximately $393 million.

Context From Recent Protocol Developments

The burn follows Uniswap’s mid-November partnership with Aztec to introduce Continuous Clearing Auctions, a mechanism intended to streamline token launches on Uniswap v4. Aztec became the first project to debut through the auction framework, which allows developers to define sale parameters while users place bids within predetermined price ranges.

Related: Uniswap’s UNInception: Why the Protocol Is Finally Turning On the Fee Switch