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The long-awaited fee change has been launched by Uniswap. However, it fails to provide immediate clarity on how to capture UNI’s long-term value.
The first data on the chain has sparked an intense debate on whether the market draws conclusions too early or reveals structural limitations in the protocol’s burning mechanisms.
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Is Uniswap’s rate change really failing – or is the market reading it wrong?
Initial estimates from on-chain analysts suggest that UniSwap’s newly activated protocol fees can generate solid assets of up to $30,000 per day. This number is well below incentive levels proposed in Government plans The last one.
This first reading raises uncomfortable questions about whether UNI emissions could exceed paid burning, at least in the short term.
books “The analysis at the current levels, the UNI incentives are expected to exceed the rates of combustion from the changing tariffs,” said a user, adding that the data calls for reflection on how different the picture would be if the tariffs were historically active.
The warning came after a detailed analysis by On-Chain Research, which initially estimated around $95,000 in daily revenue for protocols that rely solely on Ethereum in an optimistic scenario.
But after drilling in individual basins, this estimate was repeatedly revised lower. The analyst found that many of the largest fee-generating pools were either illiquid, newly implemented, whitelisted or vulnerable. Dangers of carpeting. This means that a large part of the apparent revenue cannot be realistically spent.
After excluding dubious sources, the analyst concluded that only about $30,000 per day could represent solid and realizable assets. If the annual distribution is generous, this would mean about $22 million in annual protocol revenue. This is even after assuming a strong volume of the day of the week and some expansion of the second layer.
Against the 125 million in incentives proposed by the UNI, the resulting tariff-to-emissions ratio seemed very unfavorable.
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books Mimilord: “The first data does not promise that the changing fees will be close to compensating the proposed incentives”, arguing that the diversification of assets, liquidity limits and risks of arbitrage can cause loss of value during the first stages of implementation.
“Overzealous and misguided”: Hayden Adams responds to initial criticism of the pay change
This conclusion elicited a swift and strong response I’m Hayden Adams, the founder of Uniswap. Adams called the analysis “wrong, overblown and misleading” and argued that the critics were making an incomplete thesis.
““So far only a subset of rate sources have been activated,” he said, emphasizing that many parameters are still subject to modification through future governance proposals.
Adams also refused explanations UNI premature burns. He noted that the protocol’s token jar mechanism has not yet been efficiently arbitrated.
Fees accumulate through thousands of tokens. Meanwhile, burns occur in small batches, making early burn data a poor indicator of steady-state behavior.
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“The first burn doesn’t reveal much about the steady state,” he said.
More generally, Adams rejected comparisons between the growth budget outlined in the union proposal and traditional incentives for liquidity mining.
UniSwap’s CEO stressed that UniSwap is structurally less dependent on liquidity support. He also noted that the growth budget is intended to finance long-term expansion, not to offset purchases for waived fees.
“If the growth laboratories and the budget disappear, the current tariff consumption will continue to be almost the same,” he added.
Other members of the community shared this view, marking a stark contrast to the market’s optimism just weeks ago.
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In November, the proposal of the UniSwap Consortium, which introduced protocol fees, a retroactive burn of 100 million UN, and a structural merger between the laboratories and the foundation, helped … In pushing Uni to its highest level in two months.
At the time, analysts such as CryptoQuant CEO Ki Young Joo speculated that the activation of fees could result in $500 million in annual profits if volume remained high.
For now, the gap between that bullish hypothesis and reality early in the series remains wide. Whether the rate change will mature into a sustainable UNI combustion engine, or prove to be structurally excessive, may depend less on its early days and more on how quickly Uniswap expands activations, adjusts parameters, and turns partial implementations into permanent protocol revenues.
UNI, the powerful token of the Uniswap system, was trading at $6.01, down almost 6% in the last 24 hours.
