‘Vote before Christmas or end up on Santa’s naughty list’: Uniswap founder submits UNIfication proposal for final governance decision

Uniswap founder Hayden Adams has submitted the long-anticipated UNIfication proposal for a final governance vote, setting up a decision window that runs from Dec. 19 through Dec. 25.

In a post on X early Thursday, Adams urged delegates to participate ahead of the holiday deadline. “Vote before Christmas or end up on Santa’s naughty list,” he wrote.

The vote follows a request for comment proposal from Uniswap Labs and the Uniswap Foundation last month and could mark a significant shift for the protocol and its token holders, who have long pushed for a so-called “fee switch” that would divert a portion of trading fees from liquidity providers to the protocol.

The proposal follows years in which the authors said legal battles and a hostile U.S. regulatory environment under former Securities and Exchange Commission Chair Gary Gensler discouraged activating protocol fees, conditions they argue have now changed.

If approved, the proposal would take effect following a two-day timelock and execute a series of onchain actions designed to restructure how value flows through the Uniswap ecosystem.

These include an immediate retroactive burn of 100 million UNI from the treasury (an estimate of what might have been burned if the protocol fee switch had been active at token launch), the activation of protocol fee switches on Uniswap v2 and v3 on Ethereum mainnet, and the routing of Unichain sequencer fees into the same UNI burn mechanism. Fee activation for Uniswap v4 would be addressed through a separate governance proposal, Adams said.

Uniswap has been one of the best-performing DeFi protocols in 2025, generating nearly $100 million in monthly fees on average and over $1 billion year-to-date, according to The Block’s data dashboard.

Fee switch rollout

Protocol fees would be rolled out gradually to minimize disruption, according to the proposal, beginning with Uniswap v2 pools and a selected set of v3 pools that account for 80% to 95% of LP fees on Ethereum mainnet. On v2, activating the fee switch would reduce liquidity provider fees from 0.3% to 0.25%, with the remaining 0.05% directed to the protocol. On v3, protocol fees would be set as fractions of LP fees, initially one-quarter for 0.01% and 0.05% pools and one-sixth for 0.30% and 1% pools, with governance able to adjust the parameters over time. 

Under the proposal, Unichain sequencer fees would also be routed to the UNI burn mechanism after Layer 1 data costs and a 15% allocation to Optimism. Unichain, which launched about nine months ago, is currently processing roughly $100 billion in annualized decentralized exchange volume and about $7.5 million in annualized sequencer fees, the team said.

The rollout could later expand to Layer 2s, other Layer 1s, Uniswap v4, UniswapX, PFDA — which is designed to route certain MEV (maximal extractable value) to the protocol — and aggregator hooks, the authors wrote.

Beyond fee activation, the UNIfication proposal outlines a broader reorganization of the Uniswap ecosystem. This includes contractual agreements intended to align Uniswap Labs with Uniswap governance.

Under the proposal, Uniswap Labs would enter into a services agreement recognized as legally binding in Wyoming under the state’s Decentralized Unincorporated Nonprofit Association (DUNA) framework, alongside indemnification agreements covering members of the independent committee that negotiated the deal. The proposal text states that this structure is intended to ensure Labs’ activities remain aligned with the interests of UNI token holders.

The governance package also would shift operational responsibilities historically handled by the Uniswap Foundation to Uniswap Labs, eliminate Labs’ interface, wallet, and API fees, and establish an annual growth budget of 20 million UNI funded from the treasury starting in 2026. The proposal frames these changes as part of a long-term model in which protocol usage drives UNI burns while Labs focuses on protocol development and growth.

Uniswap’s native token is trading up around 7.5% on Thursday following the proposal’s submission for a final vote, according to The Block’s UNI price page.

© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.