In this issue of State of the Network, Tanay Ved breaks down Uniswap’s post–fee switch token economics, assesses burn and fee dynamics and valuation implications for UNI and explores what this shift means for the broader DeFi sector.
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Uniswap’s fee switch links the UNI token to protocol usage through supply burns. Protocol fees now flow into UNI supply reduction, shifting UNI from governance-only to direct value accrual.
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Early data implies ~$26M annualized protocol fees and a ~207x revenue multiple. Ongoing burns of ~4M UNI per year embed high growth expectations into UNI’s $5.4B valuation.
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DeFi is shifting toward fee-linked token models. Burns, staker distributions, and ve-style locking are all attempts to better align tokenholders with protocol economics, shaping how the sector is valued.
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