UNI Price Outlook: How Uniswap’s 100M Token Burn Could Impact UNI’s Market Value

In December 2025, the Uniswap governance community decisively in favour of the UNIfication proposal. This plan would burn 100 million UNI tokens from the treasury and turn on long-awaited protocol fees, enabling continuous token burns linked to trading activity.

This decision, which got more than 69 million votes, which is more than the 40 million quorum level, marks a significant change in Uniswap’s tokenomics. 

The goal is to more closely link the UNI token to the protocol’s revenue generation and reduce its circulating supply so it can gain value. Uniswap is the largest decentralised platform, with monthly trading volume exceeding $150 billion across more than 30 blockchains. 

Its choice could establish a standard for long-term DeFi economics. Using recent data on governance and market analysis, this study examines the proposal’s components, the immediate market reaction (a 16% price rise), and the possible effects on UNI’s market value, while accounting for the volatility of the crypto market.

This analysis assesses the potential of a deflationary strategy to improve UNI’s long-term sustainability in light of prevailing DeFi trends, integrating information from community votes, management remarks, and economic models.

Information on the UNification Proposal

The , which was officially submitted for governance vote on December 19, 2025, includes changes to Uniswap’s ecosystem, including turning on a fee switch, burning tokens retroactively, and adding incentives for liquidity providers.

The suggestion comes from talks about how to make UNI more useful. It also discusses the fee switch, which has been part of the protocol since the beginning but has never been used due to regulatory concerns and challenges in getting everyone on the identical page. 

Some of the most significant parts are moving operational duties from the Uniswap Foundation to Uniswap Labs, allocating a $20 million growth budget, and removing fees on interfaces, wallets, and to make it easier for people to use.

This revision intends to make the governance system more cohesive. It has the backing of influential figures, including Jesse Waldren, the founder of Variant; Kain Warwick, the founder of Synthetix; and Ian Lapham, a former engineer at whose significant voting power assisted the plan gain traction.

The proposal’s design shows that the community is working together to change UNI from a governance-only token to one with direct economic linkages to the protocol’s performance. This might be similar to how traditional share purchaseback models work in crypto.

Voting for the Governance 

The vote begined on December 19, 2025, at 10:30 PM EST and was supposed to end on December 25. However, it reached quorum in just three days, with over 69 million UNI votes in favour and only 741 against, giving it a near-unanimous approval rate of 99.999%.

This overwhelming support shows that decentralised governance is not always in agreement, but it does show that everyone wants UNI to have a deflationary future. 

Hayden Adams, CEO of Uniswap Labs, that later than the formal closure, there would be a 2-day timelock before the fee switch could be enabled for v2 and v3 pools on the Unichain mainnet.

The vote’s success, which exceeded the 40 million UNI threshold, shows that the community is working well together and makes Uniswap a excellent example of how to evolve a protocol strategically through on-chain decision-making.

The 100M UNI Token Burn System

The main idea is to burn 100 million UNI tokens from the treasury, which are worth about $940 million at current prices. This is meant to mimic burns that would have happened if fees had been in place since launch.

This one-time cut is meant to make supply tighter, like when companies purchase back their own stock, by permanently removing tokens from circulation and addressing past excess supply. 

later than the burn, automated systems will use protocol revenues to do frequent purchasebacks and burns. This will create a deflationary economy in which trade volume directly affects token scarcity. Economic studies show that these burns can increase token value by rebalancing supply and demand, but the results depend on how long the protocol has been in use.

Activation of Fee Switch and Revenue Overhaul

The fee switch will send some of the trade fees that were previously directed only to to protocol-level burning. This will begin on the Unichain mainnet and then move to Layer 2s, additional Layer 1s, Uniswap v4, and UniswapX. 

The Protocol Fee Discount Auctions mechanism will also allow liquidity providers to bid for lower fees, potentially increasing their yields and encouraging them to create deeper liquidity pools.

This revenue model connects UNI’s economics to Uniswap’s $4 trillion in historical trading activity, turning it into an asset tied to cash flow rather than a speculative governance token. Supporters say that this alignment “makes UNI more valuable for holders,” but critics point out that it could lead to lower treasury funds and higher implementation risks.

Immediate Market Reactions and Price Surge

later than the vote, UNI’s price rose 16.27% from $5.30 to $6.16 over just a few days. This shows that the market was hopeful about lower supply and higher revenue.

jump, which put UNI 39th in the world with a market worth of $3.8 billion, shows that investors expect deflationary forces to make things harder to find. In the past, token burning has led to short-term benefits in , but long-term growth requires strong protocol growth.

What Analysts Think About UNI’s Value Effect

Analysts view the burn as a “powerful economic tool” that may “affect supply and demand dynamics,” similar to share purchasebacks that could increase value. Hayden Adams stressed that later than the timelock, “100m UNI will be burned” along with fee activations, putting UNI in a position to capture structural value. 

Supporters, including Kain Warwick, say it “aligns Uniswap’s scale with its token economics,” which could make UNI a stronger asset. But the results depend on how well things are done. Some people say, “The UNI token burn impact in 2025 might look excellent now, but it’s a gamble, not a guarantee.”

later than the timelock ends, the burn and fee switch will turn on. This might further raise UNI’s value due to lower supply and burns tied to revenue. If trading volumes are high, this could assist stay strong in DeFi. This plan could be a model for DeFi tokenomics in the long run, but market volatility and adoption rates will decide how long it lasts.

References

: “Uniswap to burn 100M UNI tokens as community backs “UNIfication” proposal.”