Uniswap surges to a two-year high after governance upgrade proposal

The Uniswap Foundation has proposed an upgrade to enable the distribution of protocol fees to UNI token holders who have actively staked and delegated their voting rights.

Uniswap’s governance announced the proposal by governance lead Erin Koen earlier today, and a snapshot vote on this proposal will occur on Mar. 1, with on-chain voting commencing on Mar. 8.

Following this, UNI surged by over 15%, marking a 50% spike in the last 24 hours. The token peaked at $12.19 today, its highest since January 2022. 

The proposal is designed to enhance and rejuvenate the governance structure of Uniswap. If approved, it will mark a pivotal moment for the leading DEX regarding trading volume, indicating a shift from previous efforts to compensate token holders with accumulated fees. 

A previous proposal, rejected by the Uniswap community last June, would have activated fees across several of the exchange’s liquidity pools and allocated a portion of this revenue to token holders. The exchange implemented a 0.15% fee on transactions involving major cryptocurrencies such as ETH and USDC through its platform in October.

If the community approves the proposed governance overhaul next week, it will facilitate the automatic and unrestricted collection of protocol fees. Fees will then be distributed proportionately to UNI token holders who have staked and delegated their voting rights, marking a significant evolution in how the platform operates and rewards its community.