TLDR
Uniswap community approved $165.5 million funding allocation for ecosystem growth
UNI price jumped 7-10% following the funding approval news
Fee switch initiative moving forward will allow token holders to earn protocol revenue
Open interest in UNI derivatives rose 17.69% to $196.96 million
Funding includes $95.4M for grants and $45M for liquidity incentives for Uniswap v4 and Unichain
The Uniswap community has voted to approve a $165.5 million funding package, causing the UNI token price to jump by 7-10% in the past 24 hours. The price increase reflects growing investor optimism as the protocol moves forward with major growth initiatives.
The token was trading at approximately $6.80-$7.01 at press time. Trading volume has seen a sharp rise of over 200% during this period.
The approved funding will support the growth of the Uniswap ecosystem following the recent launch of Uniswap v4 and the Unichain Layer 2 network. These platforms were introduced earlier in 2025.
Uniswap Price on CoinGecko
The funding package allocates $95.4 million for the Uniswap Foundation’s grants budget. This will help expand development activities across the ecosystem.
Another $45 million has been set aside for liquidity incentives. These incentives will be managed by Gauntlet, a Web3 risk management protocol.
The remaining $25.1 million will cover operational costs for the Uniswap Foundation over the next two years. The foundation is an independent non-profit organization that oversees the growth of the protocol.
One of the most important developments is the advancement of the “fee switch” initiative. This long-awaited feature would direct a portion of protocol fees to UNI token holders.
Currently, all protocol fees go to liquidity providers. The fee switch would change this model, allowing token holders to earn a share of the revenue.
The Uniswap protocol has generated over $1 billion in annualized fees. Activating the fee switch would allow token holders to capture some of this revenue stream.
The Uniswap Foundation has stated it will proceed with the necessary legal steps to activate the fee switch. Previous proposals to implement this feature were unsuccessful.
Fee Switch Initiative Drives Market Optimism
The newly approved funding is part of the “Uniswap Unleashed” initiative announced on February 14. This initiative aims to create new opportunities for growth within the ecosystem.
The foundation’s strategic priorities for 2025 include scaling network supply and demand. This involves optimizing liquidity across active Ethereum Virtual Machine chains.
Uniswap v4, launched in mid-January 2025, introduced “hooks” or contracts. These allow developers to customize interactions within pools, swaps, and fees.
The launch of Unichain, built on the Optimism tech stack, enhances Uniswap’s scalability. It provides a Layer 2 network supporting more transactions at lower fees.
Technical indicators for UNI show bullish signals. The Moving Average Convergence Divergence (MACD) has crossed above the signal line, suggesting increasing buying pressure.
The token is approaching its 100-day Simple Moving Average. This level often acts as a crucial support or resistance zone for future price movements.
If UNI breaks above this moving average with strong volume, it could target the $6.7 resistance level. A move past this point could set the token on track for a continued uptrend.
However, if the token faces rejection at the moving average, it might retreat to the $5.5 support level. This technical boundary will be key to watch in coming trading sessions.
Open interest in UNI derivatives has seen a rise of 17.69%, reaching $196.96 million. This increase reflects growing investor confidence in the token’s future performance.
The Aera platform will be used to ensure governance control over the liquidity incentive funds. This allows Uniswap Governance to recall unused funds if necessary.
Gauntlet has already set up an Aera vault on the Ethereum mainnet. With the proposal’s approval, the vault will be resumed with 7,588,532 UNI tokens deposited.
In addition to liquidity incentives, the funding will support developer-focused campaigns. These aim to sustain ecosystem expansion and encourage broader community participation.
The Uniswap Foundation’s Core Contributor Program will create incentive-aligned development teams. These teams will work to advance the protocol and ecosystem.
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