TLDR
- Uniswap community approved $165.5 million in funding to boost ecosystem growth
- The funding includes $95.4M for grants, $45M for liquidity incentives, and $25.1M for operational costs
- UNI token price jumped about 10% following the announcement
- The “fee switch” plan is moving forward, which would allow UNI token holders to earn a share of protocol fees
- Open interest in UNI derivatives rose 17.69% to $196.96 million, showing increased investor optimism
The Uniswap (UNI) token price has jumped by approximately 10% following the approval of $165.5 million in funding by the community. This major funding decision, approved through two governance proposals, marks a key moment for the protocol as it works to grow its ecosystem after the recent launches of Uniswap v4 and the Unichain Layer 2 network.
The UNI token was trading at $7.01 at the time of reporting, with a trading volume of around $292 million. The price increase comes as the long-awaited “fee switch” plan moves closer to activation.
The $165.5 million funding package is divided into three main parts. The largest portion, $95.4 million, will go to the Uniswap Foundation’s grants budget to support ecosystem development.
Another $45 million has been set aside for liquidity incentives. These incentives will help attract users and liquidity providers to the newly launched Uniswap v4 and Unichain platforms.
The remaining $25.1 million will cover the Uniswap Foundation’s operational costs for the next two years. The Foundation is an independent non-profit organization that oversees the growth of the protocol.
The open interest in UNI derivatives has also seen a 17.69% increase, reaching $196.96 million. This rise shows growing optimism among investors about the token’s future performance.
Fee switch plan
One of the most important aspects of the governance decision is the advancement of the “fee switch” plan. This would direct some of the protocol fees toward UNI token holders.
Currently, these fees go entirely to liquidity providers. The change would allow token holders to earn a share of the revenue. The Uniswap protocol has generated over $1 billion in annualized fees.
The Uniswap Foundation has stated it will now move forward with the legal steps needed to activate this switch. This has been a major topic of discussion in the community for some time.
“The beginning of our community’s next era”
The approved funding is part of the “Uniswap Unleashed” initiative announced on February 14. In a post on X (formerly Twitter), the Uniswap Foundation celebrated the approval as “the beginning of our community’s next era.”
Gauntlet, a Web3 risk management protocol, will manage the liquidity incentives. Their goal is to draw in new users and maintain growth across both the Uniswap v4 and Unichain networks.
Uniswap v4, which launched in mid-January 2025, introduced “hooks” or contracts that allow developers to customize interactions within pools, swaps, and fees. This feature aims to make the platform more flexible for developers.
The Unichain network, built on the Optimism tech stack, enhances Uniswap’s scalability. It provides a Layer 2 solution that can support more transactions at lower fees.
The funding proposal outlines four key areas for Uniswap’s growth strategy. These include scaling network supply, scaling network demand, strengthening governance, and establishing a Core Contributor Program.
The Aera platform will be used to ensure full governance control over the funds. This setup allows Uniswap Governance to recall unused funds if needed. Gauntlet has already set up an Aera vault on the Ethereum mainnet to handle the 7,588,532 UNI tokens that will fund the liquidity incentives.
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