Uniswap community backs $165.5m grants to drive Unichain and V4 development

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Uniswap community backs $165.5m grants to drive Unichain and V4 development

Takeaways

- Uniswap community approved two proposals totaling 165.5 million in funding for ecosystem expansion.

- The new capital will support Unichain, Uniswap v4, and liquidity incentives to boost protocol growth.

- A “fee switch” is now closer to activation, potentially allowing UNI token holders to share in protocol revenue.

- The Uniswap Foundation will oversee grants and partnerships, aiming to drive long-term DeFi innovation.

These measures, described as part of the “Uniswap Unleashed” plan, seek to bolster the recently launched Unichain Layer 2 network and Uniswap v4 protocol while laying the groundwork for a long-anticipated “fee switch.”

Major funding for expansion

Under the plan, the Uniswap Foundation will receive $95.4 million in grants and $25.1 million for operational costs over the next two years. An additional $45 million will support liquidity incentives. In total, over 7.5 million UNI tokens—valued at about $52 million—will be deposited into an Aera vault on Ethereum mainnet. According to the foundation, the sizable budget reflects a long-term commitment to growing the Uniswap ecosystem, fostering liquidity, and encouraging further development of decentralized finance solutions.

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The newly approved incentives will be administered in collaboration with Gauntlet, a web3 risk management protocol that proposed various strategies to bring new users and maintain robust liquidity. By supporting developers, liquidity providers, and other ecosystem participants, Uniswap hopes to solidify its position as a leading decentralized exchange while exploring innovative ways to generate value for UNI token holders.

Fee switch on the horizon

The governance proposals also bring the long-debated fee switch one step closer to reality. Under the switch, a portion of the protocol’s fees—currently directed to liquidity providers—would go to UNI token holders. Previous attempts to enable this revenue-sharing feature had stalled. Now, the foundation is expected to review legal frameworks to distribute protocol fees to governance participants, potentially offering UNI holders a direct financial stake in the platform’s success.

UNI price. Source: CoinGecko.

As Uniswap moves forward with these initiatives, the community’s attention will likely focus on whether the expanded funding and proposed fee switch can drive sustained growth. With over $1 billion in annualized fees and a developer-focused upgrade in Uniswap v4, the protocol aims to remain at the forefront of decentralized finance, offering both liquidity providers and token holders fresh opportunities for engagement and revenue.

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