Uniswap UNI Surges 19% as Governance Vote on Fees and Token Burn Begins

Uniswap’s UNI token recorded a strong rally of about 19% in the past 24 hours, driven by the start of on-chain voting for a major governance proposal that could significantly reshape the protocol’s token economics. The price increase began shortly after voting opened at 03:50 UTC on Dec. 20, according to Uniswap governance data, signaling heightened investor interest tied to potential value accrual for UNI holders.

TradingView data shows UNI breaking out from the $5.40–$5.50 range during the early phase of the voting window, followed by steady gains and increasing trading volume throughout the day. By around 19:30 UTC, UNI was trading near $6.27, clearly outperforming the broader crypto market. During the same period, bitcoin hovered around $88,300, ether slipped slightly to about $2,976, and total crypto market capitalization rose roughly 1%, highlighting UNI’s relative strength.

The rally centers on a sweeping governance proposal known as “Unification,” which aims to align Uniswap’s economic incentives, governance model, and development roadmap. If approved, the proposal would activate protocol fees on Uniswap v2 and select v3 pools and route those fees into an automated UNI burn mechanism. This long-discussed change is seen as a potential catalyst for sustainable token value by directly linking Uniswap’s trading activity to UNI supply reduction.

A key component of the proposal is a retroactive burn of 100 million UNI from the treasury, designed to approximate the amount that might have been burned if protocol fees had been active since Uniswap’s early years. Additional measures include directing Unichain sequencer fees into the same burn process and introducing auction-based systems to internalize MEV while potentially improving liquidity provider returns.

The proposal also formalizes closer coordination between Uniswap Labs, the Uniswap Foundation, and on-chain governance. Under this framework, Uniswap Labs would focus on protocol development and growth while removing fees from its interface, wallet, and API. Ecosystem growth and development would instead be funded through a governance-approved budget.

Although similar fee activation efforts have stalled in the past due to regulatory concerns and incentive disagreements, early voting data shows strong support. The vote remains open until Dec. 25, but UNI’s price action suggests the market is already pricing in the potential impact of this governance milestone and the prospect of long-term value accrual for UNI holders.