UniSwap Added 0.15% Interface Fees

Uniswap is one of the most popular and mostly used Decentralized Finance platforms. The platform has its own native coin named UNI and it is the leading DeFi project which adds brand new products to the ecosystem. Once something new is shared on UniSwap, the team holds 1-year patent rights before the other DeFi projects integrate it.

Oveer the last 2 years, the concentrated liquidity pools were among the hottest DeFi services. With the update of v3, UniSwap changed the dynamics of liquidity providing and made the investment into crypto a great source for traders, investors and passive income fans. Eventually, the concentrated liquidity pools are working perfectly fine for their investors as long as there is a sustainable logic behind the positions.

Though Uniswap is a well-reputed and respected project in the DeFi ecosystem, the community is not happy with the recent announcement of additional fees for the coins.

0.15% Additional Fees

This move has been made to generate another source of income for the DAO of the project. It can be seen as a case study for the other platforms that always copy the steps of Uniswap.

The new fee mechanism was put into action by the leading developer team without the consensus of the community members who are shareholders of the projects by hodling UNI native token.

The interesting point in this move is that they are adding the fee integration to the swaps that are conducted only on the official website of Uniswap Labs! Basically, this action has a pretty limited scope in the crypto as there are lots of other User Interfaces for any liquidity pool to invest in.

Coindesk

The first coins that will have extra fees on are majorly stablecoins.

The new "interface fee" impacts trades in which one of the tokens is ETH, USDC, WETH, USDT, DAI, WBTC, agEUR, GUSD, LUSD, EUROC or XSGD, according to an FAQ. Stablecoin swaps will not be taxed and neither will traded between ether and wrapped ether.

We can clearly see that the rise of ETH Layer 2 projects and the relatively cheap transactions on ETH are the first targets of the DAO.

The limitation of fees being imposed on the protocol's own website sounds rather interesting. Though they know the negative impact that the decision will create, the team chose to follow such a way.

Preparations for Regulations?

The problem Uniswap faces is that there is no certain classification of UNI token whether it is a security or not. In the case that UNI is seen as a real security, then investigations and furher implementations on the platform might be extremely tiring. As a precaution, some believe that the project implemented such an action to grow the capital owned by DAO and a prepare against a negative consequence of a decision by the SEC.

As expected, many people will move from Uniswap UI to another website where they are not going to be affected by the limitations of the UniSwap Labs. For the v3 enthusiasts, it is the time to find a new DEX interface that is utilizing the pools of UniSwap.

For UNI token hodlers, the focus on DAO's capital may end up very well. If the team collects a certain amount of tokens, they may decide to make buy-back and lower the amount of UNI in the circulation.

The Strength of UNI

The token does not have a serious threat on itself like APT, SUI or Ethereum Layer 2 projects have. Almost all UNI tokens have been unlocked and there is enough liquidity in the pools.

The team has been trying to add value to the native token with a use case in addition to using it for governance voting. The integration of a buy-back program, coin burn mechanism or another form of liquidity will be much better for the well-being of the ecosystem rather than insisting on a new fee criteria that will not be in favor of the community members.

How do you find the step taken by the Uniswap Team?
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Posted Using InLeo Alpha