Despite plans to expand protocol fees and burn tokens, the price of Uniswap’s native token, UNI, has experienced a decline. The governance push to increase protocol fees across various chains and v3 pools has not translated into immediate price gains.
As the broader cryptocurrency market faces a downturn, UNI’s price has been under pressure, with key support at $3.38 and resistance at $4.24.
Uniswap’s Protocol Fee Expansion Proposal
The Uniswap community is currently voting on a proposal to activate protocol fees across all remaining v3 pools on Ethereum mainnet. The plan also includes extending fees to eight other networks, utilizing the updated governance process called UNIfication.
If approved, fees collected will be used to burn UNI tokens, reducing supply and increasing scarcity over time. The proposal also introduces a tier-based system for v3 pools, streamlining governance oversight and enhancing protocol fee revenue.
Market Response
Despite the ambitious plans for protocol fee expansion, UNI’s market performance has been lackluster. The token opened at $3.56 but faced a 4.8% decline, signaling cautious market sentiment. Currently trading around $3.40, UNI’s market cap exceeds $2.15 billion, with total value locked in Uniswap surpassing $3 billion.
Uniswap Price Forecast
While the protocol fee expansion holds promise for long-term value, short-term price action remains volatile. Market analysis indicates that maintaining support at $3.38 is crucial for potential upward movement towards resistances at $4.24, $4.76, and $5.41. Failure to hold above $3.38 could lead to short-term struggles for UNI.
Be the first to comment