Uniswap's Fee Switch

APR 11, 2023 • 11 Min Read

Jordan Yeakley, CFA + 1 other Andrew Krohn Jordan Yeakley, CFA
The authors have not purchased or sold any token for which the authors had material non-public infor


Uniswap dominates the DEX landscape. Uniswap has a cumulative total of ~$1T volume, often competing with CEXs like Coinbase for volume on major pairs. Uniswap views CEXs as its primary competitor rather than other DEXs. The Uniswap community is sitting on a lever that could enable them to redirect a portion of the protocol’s fee revenue to governance, otherwise known as the fee switch.

For now, 100% of the ~$2B fees accumulated pass through to LPs, with the protocol’s fee switch yet to be activated. Controversial decisions by the Uniswap Foundation and lack of traction from grassroots governance proposals have frustrated many UNI tokenholders. The UNI token has developed a reputation among some as a useless token. If Uniswap were to activate the fee switch, how much would UNI token holders stand to benefit?

Fee Switch High-Level Implications

There has been a dormant protocol charge

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    Jordan Yeakley, CFA + 1 other Andrew Krohn Jordan Yeakley, CFA