Decision crucial for Uniswap fees – Uniswap, the pioneering decentralized exchange platform ofEthereum, recently held a major vote. This concerned the introduction of a protocol tax. However, the community decided otherwise.
Uniswap: a vote for the creation of a protocol tax
On May 10, GFXLabs submitted a proposal to modify the Uniswap protocol through the governance forum. The proposal concerns the establishment of a protocol tax equivalent at 1/5 pool fees on all Uniswap v3 and Uniswap v2 pools.
Thus, this tax aims to generate revenue for the Uniswap protocolfrom which the treasury would benefit.
Following this proposal, a preliminary vote was submitted to the governance on May 25. The purpose of this vote is to inquire about the opinion of the community vis-à-vis the modification.
Finally, on June 1, proposal to introduce protocol fees on Uniswap failed.
According to the governance site, 45.32% of the votes were against the introduction of this tax, while 42.34% were in favour. In addition, 12.3% were for a lower fee, namely by a tenth, and 0.04% were for a sixth.
Currently, the fees charged by Uniswap range from 0.01% to 1% per exchange. These fees are paid in full to the liquidity providers, with UNI token holders receiving none.
However, the proposition de GFX Labs challenge this system. According to them, Uniswap has matured and no longer needs to offer full discounts to liquidity providers.
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The debates around the proposal
In view of the outcome of the vote, two camps stand out. On one side, the proponents of the proposal argue thatUniswap is position of strength to enable protocol fees. The latter believe that this could generate significant revenue for the protocol.
Opponentson the other hand, fear tax and regulatory complications for UNI token holders. For example, Porter Smith, venture capital partner at A16z, expressed that fees should not be instituted until a legal entity for Uniswap is created, or a decentralized funds flow is established. put in place.
In addition, the current liquidity providers would see their income reduced, because part of the fees which hitherto were due to them would be diverted to the treasury.
However, the idea behind this vote is not innovative. Indeed, the SushiSwap protocol recently faced significant cash flow problems. To remedy this, the DAO decided to redirect part of the fees generated by the protocol to the treasury, at the expense of the liquidity providers. However, this process is supposed to be ephemeral, the time that the cash account sheet returns to balance.
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