Uniswap reached a structural milestone recently, but market sentiment has been more cautious rather than euphoric since.
On 26 December 2025, Uniswap’s UNIfication proposal passed with approximately 125 million UNI voting in favor. Only 742 UNI opposed the proposal, reflecting strong governance consensus.
Following a two-day timelock, Uniswap Labs is set to burn 100 million UNI tokens. The proposal also activated protocol fees across Uniswap v2 and v3 on the Ethereum mainnet, alongside fee capture linked to Unichain activity.
Hence, the question – Did this governance victory immediately translate into market confidence?
UNIfication strengthens protocol fundamentals
The proposal reinforced Uniswap’s governance maturity and long-term economic design.
Large delegates dominated voting participation, highlighting coordinated institutional alignment. Updated service agreements and refreshed pool data further reduced operational uncertainty.
Most importantly, the activation of protocol fees marked a shift towards sustainable value capture. This change is in line with Uniswap’s growth with recurring economic flows, rather than pure volume expansion.
Are UNI supply dynamics turning deflationary?
The immediate burn of 100 million UNI materially reduced circulating supply.
Beyond the one-time burn, the proposal introduced ongoing fee-driven burns tied to protocol usage. This added a structural deflationary component to UNI’s tokenomics.
However, markets appeared to price these changes cautiously. Traders may be awaiting clearer confirmation of how fee revenues ultimately benefit UNI holders.
Uniswap maintains DEX volume leadership
Despite price hesitation, Uniswap’s dominance across decentralized exchanges has remained intact.
In fact, data revealed that Uniswap recorded $60.7 billion in monthly volume, leading all competitors by a wide margin. PancakeSwap and Curve followed at significantly lower levels.
High activity and liquidity reinforced Uniswap’s position as Ethereum’s primary DEX. Fundamentally, the protocol’s competitive standing highlighted sustained resilience.
Is UNI building momentum or completing a long-term top?
UNI peaked near the $19-zone, before entering a prolonged distribution phase on the price charts.
Since the June 2023 bottom, UNI has spent nearly two years forming a multi-year head and shoulders pattern. Historically, breaks above $8.4 have produced strong rallies. However, recent failures hinted at exhaustion.
On the charts, the RSI hovered near neutral levels and weakened sharply during previous breakdowns. The MACD’s momentum appeared subdued, reflecting a lack of sustained bullish conviction.
Liquidity clusters hint at downside risk
Finally, liquidation heatmaps highlighted dense clusters around the $5.1-level.
These zones have often acted as price magnets during periods of heightened fear. A decisive move into that zone could open the door towards deeper downside, especially if broader market weakness persists.
Final Thoughts
- Governance and changes in tokenomics improved Uniswap’s long-term outlook, but price response has stayed restrained.
- Technical structure and liquidity positioning have continued to shape UNI’s short-term risk profile.
