The world’s largest so-called decentralized exchange, Uniswap, has introduced a 0.15% fee on its most popular trading pairs — a move that will not benefit UNI tokenholders. Incredibly, Uniswap Labs founder Hayden Adams claims that this new fee is separate from Uniswap Protocol’s fee switch function, which UNI token holders govern.
Aggravating UNI holders with this decision continues a long history of overlooking Uniswap’s curious coin offering.
Indeed, the price of UNI has declined 91% since its all-time high. Worse, Uniswap functioned for two years without the need for any governance token. Coinciding with a generous allocation to Adams and a group of early insiders, Uniswap oddly bolted its UNI token onto its otherwise well-functioning ecosystem on September 16, 2020.
With $3 billion in total value locked (TVL) and a #1 ranking on DEX volume leaderboards, Uniswap.org is by far the world’s most popular website to swap digital assets in a non-custodial manner. It has processed trillions of dollars worth of transactions since its inception.
How Uniswap’s voting system is unfairly favoring the richest token holders
Uniswap charges extra 0.15% on website, wallet
The new fee will impact trading pairs that include two of the following tokens: ETH, USDC, WETH, USDT, DAI, WBTC, agEUR, GUSD, LUSD, EUROC, and XSGD.
Swaps between stablecoins or between ether and wrapped ether will not be charged the additional fee. Furthermore, a Uniswap spokesperson told CoinDesk that she “just wanted to clarify that both the input and output tokens need to be on the list for the fee to apply (not just on one end).”
In any case, Adams’ new 0.15% fee only affects users of Uniswap’s website and wallet (API and other on-chain users can avoid it). Developers say the new fee will help sustainably fund the protocol.
He also boasted that the 0.15% fee is among the lowest for digital asset exchanges and should not reduce accessibility to Uniswap, and reassured UNI holders that the fee will fund future Uniswap-related development.
Of course, the proceeds of the UNI token sale were supposed to fund Uniswap-related development. However, people who bought and voted with that token, despite their years of contribution, will not benefit from Adams’ new 0.15% rate.
I work in crypto because of the immense positive impact I believe it can have on the world, removing gatekeepers and increasing access to value and ownership.
I’m proud of the ways @Uniswap Labs has contributed to that effort and want to make sure we’re creating sustainable…
— hayden.eth
(@haydenzadams) October 16, 2023
More money for the team, not UNI holders
There were many criticisms of Uniswap’s new UNI-excluding fee with several frustrated users replying directly to Adams’ announcement.
Not sure I see the value for the users or the holders.
Sounds like a new tax to me. Just how to extract more money from the users to the team.
— Crypto JAW (@jaw_crypto) October 16, 2023
Adam Cochran joked that UNI has become so neglected that Uniswap has basically relegated it to a meme coin: UNI in name only.
So after today can we just get CoinGecko to move $UNI to the Memecoin section?
— Adam Cochran (adamscochran.eth) (@adamscochran) October 17, 2023
A long history of ignoring UNI holders
The Uniswap team has previously shown little regard for the results of UNI governance votes. For example, it took an extended amount of time to implement a fee switch protocol that had passed with a supermajority in every round of voting. After unexplained delays, it eventually blamed regulators.
remember uniswap fee switch proposal?
it has passed the discussion, the temperature check, the consensus check with 100% in favor, and then… crickets.
the community got fucked again lmao
— banteg (@bantg) August 15, 2022
Uniswap once ignored a ‘governance’ vote that passed with 100% approval.
Read more: Uniswap founder trolled for asking devs to contribute to DeFi protocol update
It doesn’t help that the voting system favors parties that can afford to snap up millions in UNI tokens, even temporarily. Binance, of course, denied using customers’ UNI holdings to vote on proposals even though it likely benefited from a vote to launch Uniswap on BNB Chain.
Although the Uniswap team will likely benefit from the new 0.15% fee on some trading pairs, UNI token holders will not see any benefits. As usual, Uniswap made a unilateral decision without asking its governance token holders first.
