Uniswap’s governance vote to approve $165.5 million in funding has sparked renewed investor confidence, sending the UNI token price soaring over 10% in the last 24 hours. At the time of writing, UNI is trading at $7.01, with a trading volume of approximately $292 million. The surge reflects optimism surrounding Uniswap’s long-anticipated “fee switch” initiative, which is now closer to implementation. Additionally, open interest in UNI derivatives has risen by 17.69%, reaching $196.96 million, signaling increased market activity.
Uniswap Foundation Secures Major Funding for Ecosystem Growth
The Uniswap community recently approved two governance proposals allocating $165.5 million in funding to strengthen the protocol’s ecosystem. The funds will support the development of Uniswap v4 and the Unichain Layer 2 network, which aims to enhance scalability and reduce transaction costs.
Breakdown of the funding allocation:
- $95.4 million for the Uniswap Foundation’s grants program.
- $45 million for liquidity incentives.
- $25.1 million for operational expenses over the next two years.
The Uniswap Foundation, an independent non-profit, is spearheading this initiative to transition Uniswap from a decentralized exchange into a robust platform catering to developers and liquidity providers.
We're thrilled to announce that last night, both UF governance proposals passed quorum.
— Uniswap Foundation (@UniswapFND) March 19, 2025
This marks the beginning of our community's next era: one that unlocks new opportunities to build, grow and to create and capture value.
→https://t.co/h1NnLUFskL
→https://t.co/kchEqv2PDH pic.twitter.com/udvUgdA3TR
Liquidity Incentives to Boost Uniswap v4 and Unichain Adoption
Part of the allocated funds will establish liquidity incentives to support the adoption of Uniswap v4 and Unichain. These incentives will be managed by Gauntlet, a Web3 risk management protocol, to attract new users and sustain network growth.
Uniswap v4, which launched in January 2025, introduced “hooks” that allow developers to customize pools, swaps, and fees. Meanwhile, Unichain, built on the Optimism tech stack, enhances Uniswap’s scalability by reducing transaction costs and increasing throughput.
Fee Switch Activation Moves Closer to Reality
A key highlight of the governance decision is the movement toward activating the long-discussed “fee switch.” This change would redirect a portion of Uniswap’s protocol fees—currently earned by liquidity providers—toward UNI token holders.
With Uniswap generating over $1 billion in annualized fees, the fee switch could significantly increase UNI’s utility and attract further investment. The Uniswap Foundation is now taking legal steps to finalize its activation, marking a pivotal moment in the protocol’s evolution.
Also Read: Uniswap Under Fire: Unichain Sparks Governance Concerns
As Uniswap strengthens its ecosystem, the governance decision underscores the platform’s long-term vision to enhance decentralization while creating new revenue streams for token holders.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
