The introduction of a fee switch mechanism could set new industry benchmarks in revenue sharing, inspiring others, such as dYdX—who have previously hinted at a fee-sharing mechanism—to follow suit.
The Uniswap Foundation’s proposal sheds light on a significant issue: governance apathy, with less than 10% of circulating $UNI participants on a given proposal. While introducing a fee-sharing mechanism via staking and delegation might increase participation, it is unlikely to ignite a broader interest in governance.
However, this initiative could complicate liquidity provisioning on Uniswap, making it far more suited for sophisticated participants. As highlighted in Gauntlet’s report, the introduction of a one-tenth fee could lead to a reduction in liquidity and trading volumes.
The imposition of a front-end fee without engaging the community, alongside a perceived decline in their involvement in decision-making, with less than 10% of $UNI being used to vote, raises questions about Uniswap’s dedication to decentralised governance.
The primary aim of activating the fee switch, as highlighted in the Uniswap Foundation proposal, is to enhance governance participation, an ambition Keyrock has always vocally supported.
This is why our firm commitment to healthy governance practices hasn’t gone unnoticed, leading us to be one of the seven delegates to receive increased UNI delegation.Therefore, we can only be supportive of such a proposal.
However, we advocate for a phased, iterative approach, initially targeting a few select pools rather than implementing a drastic, global change. Drawing on insights from analyses like Gauntlet’s, we aim to make informed decisions that serve the best interests of Uniswap as a protocol, LPs in the pools, and traders—acknowledging each as a crucial actor of the ecosystem.
To have an overview of our voting and governance participation, check out our0xkeyrock.ethwallet’s activity.
Stay informed about DEXs and fee collection by following Keyrock onXandLinkedIn.
