Uniswap weighs protocol burns as its 2025 fee haul approaches $1 billion

Last week, Uniswap Labs and the Uniswap Foundation unveiled a joint "UNIfication" proposal to activate protocol fees, introduce a UNI burn component, including a retroactive burn, as well as streamline governance. Under an earlier 2024 concept, protocol fees would have accrued to staked-and-delegated UNI.

UNIfication instead emphasizes burning the fees generated by the protocol (and ending Labs’ front-end fees), with exact routing subject to a governance vote.

Uniswap has generated over $985 million in fees year-to-date, averaging close to $93 million per month from January to October. After experiencing a weak first quarter where monthly generated fees declined by an average of approximately 24% month over month, the protocol recovered notably.

Since the beginning of the second quarter, monthly fees generated by Uniswap grew by 17% on average, with October’s total of over $132 million being just shy of its yearly high from January.

All in all, 2025 has been a fairly positive year so far for the Uniswap protocol, as it is currently on pace to generate more fees this year compared to the year prior.

If governance activates the Uniswap v3 fee switch, the protocol could capture 10-25% of LP fees, implying eight- to low-nine-figure annualized protocol economics at today’s run-rate. For context, the "10-25%" figure was derived from Uniswap v3's built-in protocol fee options, which allow governance to divert either 1/10th, 1/6th, or 1/4th of LP swap fees to the protocol.

Under UNIfication, this would ultimately be routed to a burn system unless governance amends it. This burn-first design would benefit UNI token holders via supply reduction.

Evidently, within two hours of the initial governance proposal, the UNI token rose by over 35%, adding over $1.6 billion to its market cap.

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