Uniswap fee switch will bring in $14.6M a year, but there’s a catch

The fee switch proposal, originally published in July, would impose a small fee on certain Uniswap liquidity pools. However, community members prefer to spend more time and do more research before making a decision on such a sensitive topic, here’s why.

Self-sustainment was the original goal behind the aforementioned protocol charges. The feature will include the exact percentage amounts hardcoded into the core contracts, which remain non-upgradeable.

In the successful case, the entire agreement would bring in nearly $15 million per year at current values, or a profit of 314 times current valuations. Additionally, profits from fee conversions send funds to the protocol even though no staking mechanism is implemented.

The excess funds that would be generated if the proposal passes have not yet been allocated, although the consensus is that they will be used for the further development of the project.

However, industry experts don’t think the $15 million annual increase will have a significant impact on the growth of the industry-leading on-chain exchange protocol. Even a direct pool incentive of $15 million won’t change the TVL among the largest pools.

All things considered, Adam Cochran does not think the vote will succeed and could even trigger a “dump the news” event once people finally find out that the agreement will bring insufficient value.

Over the past few days, the protocol’s token, UNI, has been showing solid price performance despite falling trading volumes and an overall bearish market. UNI has gained over 17% in value since November 28 and is currently trading at $6.1.

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