UNI price forecast: Uniswap fee conversion proposal boosts trading volume by 600%, is an $11 target within reach?

On November 11, the Uniswap development team proposed a governance proposal to switch the settlement currency for trading fees from ETH to UNI, and plans to implement a retroactive burn mechanism of 100 million UNI tokens (approximately $800 million). Following the announcement, UNI’s price surged 23% within 24 hours, trading volume exploded by 600%, and the monthly trading volume surpassed $123 billion, reaching a new high for the year.

Technical analysis shows UNI has broken through the descending triangle resistance and successfully moved above the 200-day exponential moving average. If the proposal passes and triggers a supply shock, the short-term target could reach $11, with a medium-term challenge to the high of $19. The regulatory easing environment brought about by leadership changes at the U.S. Securities and Exchange Commission (SEC) provides an important window for DeFi protocol innovation.

Details of the Uniswap Proposal and Market Reaction Analysis

The fee conversion plan proposed by the Uniswap Foundation includes three core elements: First, changing the settlement asset for trading fees in v2 and v3 from ETH to UNI, which account for over 80% of liquidity provider fees across these versions; second, establishing a real-time burn mechanism where 0.05% of each transaction fee is permanently removed from circulation; third, executing a one-time burn of 100 million UNI tokens, representing 10% of the total supply. This design directly addresses the community’s long-standing concern over insufficient token value capture, transforming UNI from a governance token into a productive asset.

Market reactions exceeded expectations. In addition to price and trading volume indicators, on-chain data also confirms capital inflows: UNI addresses added 37,000 new holders within 24 hours, whale transactions (single transactions over $100,000) increased by 240%, and UNI collateralized borrowing rates on decentralized lending platforms soared to 18%. This frenzy partly draws historical parallels—during similar proposal discussions in 2023, UNI once surged 70% in a week but was ultimately shelved due to regulatory pressures. Uniswap co-founder Hayden Adams openly stated on social media: “For the past five years, the team has struggled to participate substantively in governance. This proposal will re-activate the protocol’s value accumulation mechanism.”

Regulatory Environment Shift and Uniswap Protocol Evolution Path

Following the departure of former SEC Chairman Gary Gensler, Acting Chair Hester Peirce’s “regulatory innovation” policy has loosened restrictions on decentralized protocols. Key changes include applying a “full decentralization” exemption principle for token distribution, recognizing the non-security status of automated market makers (AMMs), and allowing protocol fees to directly empower native tokens. This regulatory clarity enables Uniswap Labs to formally propose economic model reforms for the first time, moving beyond the community-only discussions seen in 2022.

From a protocol development perspective, this reform is a prelude to Uniswap v4 upgrades. Version 4 will introduce “Hook” contracts, allowing liquidity pools to customize trading logic, with the fee conversion mechanism providing a value distribution channel for these new features. Data shows that from August to October, Uniswap’s fee revenue exceeded $100 million for three consecutive months, with v3 accounting for 68%, providing a solid cash flow foundation for token burns. In comparison, competitors like SushiSwap, which implemented fee sharing as early as 2021, have struggled with accumulated technical debt, and UNI’s subsequent rise could reshape the DEX competitive landscape.

UNI Technical Structure and Price Target Estimation

Daily charts show UNI has completed key breakouts. After testing the $5 support level four times, the price successfully broke free from the descending triangle, accompanied by increased volume surpassing the 200-day EMA. The Relative Strength Index (RSI) rose to 68, approaching overbought territory but without typical bearish divergence signals, indicating upward momentum remains intact. In derivatives markets, perpetual contract funding rates for UNI stay at a mild 0.01%, with no signs of excessive leverage, leaving room for further gains.

Based on supply dynamics, two scenarios are projected: if the proposal passes and the burn mechanism is activated immediately, reducing circulating supply by 10% could push the price to $11 (a 45% increase); if trading volume also increases to an average monthly level of $150 billion, network effects could lift the price to $19 (a 150% increase). These estimates are based on a reconstructed core valuation formula involving TVL, circulating market cap, and token flow value, with the ratio of total value locked (TVL) to market cap improving from 0.38 to 0.52. Risks include strong resistance around $10, corresponding to historical consolidation zones in May 2023 and January 2024.

( UNI Key Data Indicators

Market Data

• Current Price: $7.6
• 24-Hour Increase: 23%
• Trading Volume Growth: 600%
• Monthly Trading Volume: $123 billion

Proposal Impact

• Tokens to Burn: 100 million UNI
• Burn Percentage: 10% of total supply
• Implementation Phases: prioritize v2/v3
• Fee Conversion Rate: 0.05% real-time burn

DeFi Governance Evolution and Cross-Chain Ecosystem Competition

The governance paradigm shift triggered by the Uniswap proposal warrants in-depth discussion. Traditional DeFi governance suffers from a vicious cycle of “low proposal approval rates and poor voting participation,” with an average approval rate of only 12%. UNI’s approach of tying governance rights to economic incentives directly links voting power with financial benefits, a model adopted by protocols like Compound and Aave. The deeper implication is that it sets a precedent for “regulatory-friendly token economics”—using fee burns instead of dividends to avoid securities classification risks, providing a compliant pathway for traditional financial institutions to participate in DeFi.

From a cross-chain ecosystem perspective, this reform could accelerate reshuffling within Ethereum Layer 2 networks. Currently, Uniswap’s trading volume on Arbitrum and Base accounts for 42%, and fee conversion could further increase asset accumulation on these Layer 2s. Competitors such as PancakeSwap (BNB Chain) and Trader Joe (Avalanche) have convened emergency governance meetings to discuss similar mechanisms. Investors should monitor the linkage opportunities with Layer 2 native tokens (like ARB, OP) and the development of decentralized governance infrastructure (such as Snapshot, Tally).

Operational Strategies and Risk Management

Participants with different investment preferences are advised to adopt tailored strategies: short-term traders can focus on rebound opportunities around the $6.8–$7.2 support zone, setting a stop-loss at $6.5; medium- to long-term investors should gradually build positions during the proposal voting period (November 15–20), allocating 30% of their holdings to UNI spot and 20% to related governance tokens; DeFi farmers can provide liquidity in v3 pools for ETH/UNI pairs to capture annualized yields of 40–80%, but should be aware of impermanent loss risks.

Risk management should focus on three aspects: regulatory (the SEC’s new leadership’s stance remains uncertain; tightening policies could halt the proposal), technical (smart contract upgrades carry vulnerability risks; waiting at least two weeks for security audits is recommended), and market (the overall crypto beta remains high at 1.8; if Bitcoin falls below the critical support of $100,000, UNI could retest $5.5). Using options for hedging, such as buying 10% of the position in $6 put options, is suggested to protect against tail risks.

Conclusion

The Uniswap fee conversion proposal is not only an upgrade of the token economic model but also a key milestone in the protocol’s transition from infrastructure to a value-carrying asset. By directly linking protocol revenue with token value, UNI could pioneer a new category of “decentralized cash flow assets.” Despite ongoing regulatory and technical challenges, the market’s enthusiastic response demonstrates that community-driven financial innovation still holds the potential to reshape traditional financial structures.