Uniswap proposes UNIfication burn extension to v4 pools across 11 chains

Uniswap Labs asked UNI token holders to approve protocol fees on a portion of v4 pools, extending the UNIfication burn program that already runs on 11 chains.

The proposal, published on Uniswap's governance forum, asks token holders to authorize fee collection on a subset of v4 liquidity pools, according to the proposal text. The UNIfication program collects protocol fees from select pools and uses the proceeds to buy back and burn UNI tokens on Ethereum.

Expanding the mechanism to v4 pools would increase the volume of tokens removed from circulation. The UNIfication program, activated in 2025, currently applies to swaps on 11 chains including Ethereum, Arbitrum, Optimism, Polygon, and Base, according to Uniswap's published documentation. Adding v4 pools would capture a larger share of the protocol's growing trading volume on the newest architecture.

If approved, the move would increase deflationary pressure on UNI's supply, potentially supporting token holder returns. The proposal must pass through Uniswap's governance process, which includes a temperature check on the forum, a formal on-chain vote using UNI tokens, and a seven-day timelock before implementation. A vote date has not yet been set, though governance participants typically allow at least seven days for community discussion before moving to a formal vote.

The proposal comes as DeFi protocols increasingly compete on tokenomics design. Curve Finance and Aave have also implemented fee-switch mechanisms that direct revenue to token holders, creating a competitive landscape for value accrual. Uniswap v4, launched earlier this year, introduced "hooks" that allow customizable pool logic, making it the most flexible version of the protocol to date.

Uniswap remains the largest decentralized exchange by trading volume, processing billions of dollars in swaps daily across Ethereum and its layer-2 networks. The UNI token, which trades on Ethereum, serves as the governance token for the protocol with a total supply of 1 billion tokens. The burn program has removed thousands of UNI from circulation since its launch, though the exact amount varies with trading volume and fee collection rates.

For UNI holders, the expansion represents a direct link between protocol usage and token value. If v4 pools generate significant fee revenue, the resulting buyback-and-burn mechanism could reduce circulating supply over time, benefiting long-term holders. The proposal also signals Uniswap Labs' commitment to aligning protocol incentives with token holder interests, a key consideration for DeFi governance participants evaluating the protocol's long-term value proposition.

This article is for informational purposes only and does not constitute investment advice.