New proposal will not bring enough funds for significant change
The fee switch proposal was initially posted back in July, which would levy small fees on some Uniswap liquidity pools. However, community members preferred to take more time and do more research before making such a decision. Sensitive topic, and here’s why.
Self-sustainability was the initial goal behind the aforementioned protocol charge. The feature would include the exact percentage amount hardcoded into core contracts, which remain non-upgradable.
In case of success, at current prices, the entire protocol would bring in approximately $15 million per year, which at current valuations, is a 314x return. Additionally, the profit from the fee switch sends money to the protocol, even if no staking mechanics are implemented.
The excessive funds that would be generated if the proposal goes through have not been assigned yet, even though the consensus is to spend them on further growth of the project.
However, industry experts do not see a significant impact on the development of the industry-leading on-chain swap protocol for the $15 million added annually. Even a direct $15 million pool incentive will not change the TVL in the largest pool.
Considering all the factors, Adam Cochran believes the vote will not be successful and may even cause a “sell the news” event once people finally discover the lack of value the protocol would bring.
Over the past few days, the protocol’s token UNI has been showing a solid price performance despite the decreasing volume and the overall bearish condition of the market. Since November 28, UNI has increased its value by over 17% and is now trading at the $6.1 price level.
