- Uniswap Labs will release an Ethereum rollup before the end of the year.
- The accumulation will be based on UNI tokens put into play.
- UNI jumped more than 10% on Thursday.
Uniswap’s UNI token rose 10% on Thursday after parent company Uniswap Labs announced it would launch its own Ethereum-based blockchain, also known as rollup.
Importantly, this blockchain, Unichain, will share its revenue with people who choose to lock or “stake” their UNI tokens.
Uniswap was the seventh-largest decentralized finance protocol as of Thursday, with nearly $4.5 billion in user deposits, according to data from DefiLlama. It has collected more than $3.8 billion in fees since its launch nearly six years ago.
UNI is the protocol’s governance token, allowing holders limited control over its functionality and development. Nearly 400,000 crypto wallets held UNI as of Thursday, according to Etherscan.
UNI holders have long called for a reduction in Uniswap revenue.
Supporters of enabling Uniswap’s so-called fee shift have argued that it would be a boon for UNI investors, creating a way for them to share in the protocol’s success.
For years, the proposals fell through, largely out of concern that they would run afoul of U.S. securities laws.
A recent proposal to enable the fee shift would have diverted a portion of Uniswap’s revenue to UNI holders who “delegated” their tokens for use in the protocol’s governance. Delegation occurs when users lend the voting rights attached to their governance tokens, usually to subject matter experts.
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However, in May, the Uniswap Foundation, a nonprofit organization responsible for supporting the Uniswap protocol, canceled a planned vote on the fee change on the day voting was scheduled to begin.
Erin Koen, the foundation’s head of governance, said an anonymous stakeholder raised an issue that required “additional due diligence on our part” but did not specify what it was.
The Uniswap Foundation has since remained silent on the subject. Executive Director Devin Walsh did not immediately return DL News‘request for comment Thursday.
Like Ethereum itself, Unichain will rely on a distributed network of computers called “validators” to process transactions.
In order to serve as a validator, users will need to stake their UNI in exchange for rewards.
But staking won’t replace the fee change, according to Uniswap delegates who spoke with DL News.
“Unichain is a positive step forward for Uniswap and the DeFi ecosystem,” said Alice Corsini, governance analyst at Karpatkey, Uniswap delegate.
“While we are still diving into its mechanics, we view Unchain’s model as an effort focused on rewarding an active set of validators, while the fee change discussion targeted the community in its together.”
Uniswap researcher and delegate Atis Elsts agrees.
“I’m happy to see that the UNI token is finally finding some utility outside of governance itself,” Elsts said.
But that doesn’t replace the fee change, he added.
“Unless the DAO votes to permanently disable the fee shift on certain deployments, this option will remain there forever, because blockchain contracts are immutable.”
Unichain went live on an Ethereum testnet on Thursday. A final version will be deployed on Ethereum mainnet before the end of the year, according to the Uniswap Foundation.
Aleks Gilbert is DL News‘ DeFi correspondent based in New York. You can reach him at aleks@dlnews.com.
