- Uniswap secures $165.5M, fueling ecosystem growth and liquidity incentives.
- UNI price jumps 10% as fee switch nears activation for token holder revenue.
- UNI derivatives open interest surges 17.69% to $196.96M, boosting investor confidence.
The recent funding acquisition of $165.5 million by Uniswap resulted in a 10% increase in its UNI token price. The new capital investment will accelerate ecosystem expansion while enhancing liquidity incentives and reinforcing governance structures. The Uniswap community advances toward enabling the much-awaited fee switch that stands to reconfigure token holder revenue distribution.
Uniswap Allocates Funds for Growth and Liquidity Incentives
Two funding proposals totaling $165.5 million received approval from the Uniswap governance community. The Uniswap Foundation will receive a grant allocation of $95.4 million to support its ongoing initiatives. The Uniswap governance community has designated $45 million to provide liquidity incentives to boost market participation. The next two years of operational expenses will be financed by the $25.1 million that remains.
The Uniswap community received new funding after launching Uniswap v4 and the Unichain Layer 2 network. Uniswap v4 enables developers to customize their interactions with pools and swaps through adjustable “hooks”. Unichain operates on the Optimism tech stack to boost scalability through reduced transaction fees and better network performance.
The Web3 risk management protocol Gauntlet will manage liquidity incentives to draw new users while maintaining ongoing user engagement. The incentives are designed to broaden Uniswap’s user base while maintaining consistent growth within its dynamic ecosystem.
Fee Switch Moves Closer to Activation
One of the most notable aspects of this funding decision is its impact on the long-discussed fee switch. If implemented, this feature would enable UNI token holders to earn a share of protocol fees. Currently, all fees generated by Uniswap go to liquidity providers. The proposed shift would redirect a portion of these earnings to governance participants, aligning long-term incentives within the ecosystem.
Previous attempts to activate the fee switch faced regulatory and governance challenges. The recent financial backing enables Uniswap to move forward with essential legal procedures required to complete the transition. The prospective revenue share for UNI owners has sparked positive sentiment among community members as demonstrated by UNI’s price increase of 10%.
The price of UNI jumped to $7.01 after approval of the funding proposals. A daily trading volume of about $292 million demonstrates that investor confidence has been restored. At $196.96 million, the open interest in UNI derivatives increased by 17.69%.
