- The community governance process that governs Uniswap’s protocol is currently in the process of voting on whether it will operate a “toll desk” for select pools on its platform.
‘Toll Switch’: A new function
In July 2022, Uniswap stuck to a proposal to charge fees on a small portion of Uniswap’s liquidity pools. At the time of the proposal, Uniswap charged a fee of around 0.3% for trading tokens on the platform. The offered fee switch, also known as the protocol fee, will transfer 0.25% of the 0.3% fee to LPs, and the remaining 0.05% will apparently go to UNI token holders.
Follow-up votes for the “temperature check” and “consensus check” mentioned by the DAO were conducted directly and the offer was accepted, but many members of the Uniswap community argued for more time to research and learn about the proposal before the final vote.
Currently, six months after the idea was introduced, the Uniswap community will finally take a binding vote on whether to go ahead with the introduction of the fee change.
The offer, which community members will vote on, shows an option for Uniswap to experiment with the parameters in the respective liquidity pools, yielding 0.5% of DAI-ETH, 0.3% of ETH-USDT and 1% of USDC -ETH to be added.
A percentage fee of 10% will be charged for the percentage of these specific pools, the lowest allowed by the Code. Uniswap basic smart contracts were immutable at the time of deployment.
It is worth noting that turning on the fee switch will not affect users using protocols to trade directly, instead a small portion of what is currently being paid out will be kept to the liquidity providers. There is a high probability that the modest minimum fees will eventually act as a deterrent for those providing liquidity, especially after the fee transition has been implemented.
The vote will go live in the next 14 days after the bid’s technical due diligence has been assessed by its authors. UNI token holders will then have 7 days to cast their vote, after a 2-day time-lock before the inevitable implementation if passed.
At the time of writing, Uniswap is currently trading at $6.22 with a 24-hour trading volume of $169,665,805. It’s also up 3.87% in the last 24 hours. Holding a total market capitalization of $4,741,546,571.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own bank and break away from traditional money exchange systems. She is also fascinated with blockchain technology and how it works.
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