# 🟣 Will Uniswap Trigger the Crypto Supercycle? *The Fee Switch Explained* By [Web3 Academy](https://paragraph.com/@web3academy) · 2024-02-26 cryptocurrency, defi, web3 --- **GM DOers!** 😎 Uniswap has settled a whopping $1.9 trillion in volume since 2020, and generated 3.5 billion in fees for its liquidity providers. ![](https://storage.googleapis.com/papyrus_images/99d1605523d70e37b5f1dc7599badcd1.png) How much did $UNI holders get out of all of this activity? **A big fat $0.** Regulatory concerns have prevented the Uniswap Foundation from activating the fee switch, a feature to share Uniswap's revenue with $UNI token holders. However, this could soon shift, as the Head of Governance at Uniswap Foundation has recently proposed a move to enable this revenue-sharing feature. **Translation?**  Engaging with Uniswap's governance – whether by voting directly with your $UNI tokens or delegating them to someone who does – could now earn you a cut of the protocol's revenues. 💰 We believe this long-awaited revenue-sharing proposal for Uniswap token holders is a game-changer for the industry.  The market seems to agree, as the news caused $UNI to surge 70% within an hour of its announcement. ![](https://storage.googleapis.com/papyrus_images/4008cceef683a93b20701323b8a00743.png) At the same time, many other top DeFi tokens pumped on the speculation that they too would turn on their own fee switches.  [![User Avatar](https://pbs.twimg.com/profile_images/1436307395496587272/xGdXnXdI_normal.jpg)](https://twitter.com/QwQiao) [qw](https://twitter.com/QwQiao) [@QwQiao](https://twitter.com/QwQiao) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/QwQiao/status/1761349405746020859) the market understands how big of a deal the uni fee switch is better than ct does it’s not about discount cash flow and p/e and other midcurve valuation stuff, it’s about the legal audacity to do i in the sec’s face while being based in the us they must know something we don’t… ![](https://pbs.twimg.com/media/GHGQt0VWcAApY04.jpg) [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 1,135](https://twitter.com/QwQiao/status/1761349405746020859)[ 16:46 • 24 Feb 2024 ](https://twitter.com/QwQiao/status/1761349405746020859) DeFi is once again the meta in crypto, and the opportunities are huge. Let’s talk about: * The Uniswap fee switch proposal ✍ * How much revenue $UNI holders will get 📊 * What this means for the industry 🤔 _At the end, I give my theory on when the crypto supercycle will begin!_ Vamos! ⏬ ✍ **The Uniswap Fee Switch Proposal** ------------------------------------- First, let’s be clear that this is just a proposal, not yet a sure thing. There have been many other similar proposals that have not gone through in the past.  The reason this one is getting more hype is because it was proposed by Erin Koen, the Governance Lead at Uniswap Foundation. **The TL;DR of this proposal:**  **Rewarding Participation:** If you hold $UNI, voting or delegating your vote earns you a share of Uniswap's trading fees. **Think of it as a "thank-you" bonus** for your input. **Technical Upgrades:** Uniswap plans to roll out two new smart contracts to **automate fee collection and distribution** to active participants. **Encouraging Active Delegation:** This setup aims to **discourage passive delegation** by rewarding active and thoughtful participation, ensuring voters are engaged. **Implementation Steps:** A vote on this proposal is imminent, with a Snapshot vote scheduled for March 1st, and an onchain vote on March 8th.  If the majority votes **yes** (which is probably most likely), then Uniswap will move to finally turn on the fee switch after many years of waiting.  The question now is… How much will $UNI holders get by staking their tokens?  📊 **Key Uniswap Stats + How Much Will $UNI Holders Earn?** ----------------------------------------------------------- Since its inception, Uniswap has settled over 300 million trades… ![](https://storage.googleapis.com/papyrus_images/7d5caf3bd0bdcb82cff4328131c222d6.png) … which have compounded to almost $1.9 trillion in volumes (this is an insane number). 🤯 ![](https://storage.googleapis.com/papyrus_images/ceefc6a7afd0179272bb6b6eb335357c.png) From all of this activity, the Ethereum network earned $3.5 billion, while different L2s earned up to $10 million.  (This revenue came from users paying gas fees when transacting on Uniswap). ![](https://storage.googleapis.com/papyrus_images/908e76189d1a0a7ed74e053b2ed1028d.png) At the same time, liquidity providers on Uniswap earned a total of $3.5 billion across all chains. ![](https://storage.googleapis.com/papyrus_images/8f6ce658d0b10a7b20580fe2006831f4.png) We wrote [a full Uniswap value accrual report](https://paragraph.xyz/@web3academy/uniswap-onchain-value-flow) in the past, showing how much each party made. We summarized it in this infographic. ![](https://storage.googleapis.com/papyrus_images/487e2614026c51b527239393e1ad6793.png) **The main takeaway? –** That $UNI holders never got a dime, despite their critical role in the protocol, given their votes significantly impact its future. So how much will $UNI holders get if this proposal goes through? While we don’t know exactly how much of the revenue will accrue to holders versus LPs, we can make some assumptions. Since October 2023, LPs have earned a total $309 million. [Source](https://dune.com/web3academypro/uniswap-value-accrual) Here's how the earnings for $UNI holders would break down based on different percentages of the $309 million earned by LPs: * **50%:** $154.5 million / year * **25%:** $77.25 million / year * **15%:** $46.35 million / year * **10%:** $30.9 million / year * **5%:** $15.45 million / year Better than nothing, amirite?  🤔 **What Does This Mean for the Industry?** -------------------------------------------- Please understand that this is a US-based protocol that has turned its governance token into one that earns revenue for holders.  The reason Uniswap hasn’t done this before is because of regulatory concerns – sharing revenues with your token holders is similar to how stocks share dividends with shareholders.  For this reason, crypto protocols have always hesitated to share revenues, as they never wanted to be categorized as securities by the SEC.  With this proposal, Uniswap is basically telling the SEC “f\*ck off, you can’t touch me”. 😂 [![User Avatar](https://pbs.twimg.com/profile_images/1745355827761025024/09OxXngw_normal.jpg)](https://twitter.com/TheCryptoDog) [The Crypto Dog 📈](https://twitter.com/TheCryptoDog) [@TheCryptoDog](https://twitter.com/TheCryptoDog) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/TheCryptoDog/status/1761528912855925037) Uniswap fee switch ushering in a new era. SEC has lost its bite. I'm impressed, very bullish for defi, US based/US compliant builders, and the broader crypto market. Watch it pricing in now across the markets. [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 725](https://twitter.com/TheCryptoDog/status/1761528912855925037)[ 4:39 • 25 Feb 2024 ](https://twitter.com/TheCryptoDog/status/1761528912855925037) We predicted this to happen back in July 2023, when [XRP won its lawsuit against the SEC](https://paragraph.xyz/@web3academy/the-sec-says-xrp-is-not-a-security) about it being a security.  ![](https://storage.googleapis.com/papyrus_images/5fd90d5acfe87030cba051a253e14eb5.png) We wrote that when $UNI was $5 – if you added it to your portfolio, congrats! If not, don’t worry. I think the opportunity is just getting started.  I think this sets a **precedent for all DeFi tokens**, who now must **turn on their own fee switch or get left behind.**   Frax Finance is already asking their community if they should do this. [![User Avatar](https://pbs.twimg.com/profile_images/1345677460747108352/JjqQ9ROz_normal.jpg)](https://twitter.com/fraxfinance) [Frax Finance ¤⛓️¤](https://twitter.com/fraxfinance) [@fraxfinance](https://twitter.com/fraxfinance) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/fraxfinance/status/1761102567667548277) Should veFXS holders vote to distribute Frax Protocol revenue back to veFXS stakers again? Frax Finance makes 8 figures of annual revenue & growing, mostly being conserved in the treasury now. Time to turn it back on? ![👀](https://twemoji.maxcdn.com/v/14.0.2/72x72/1f440.png) [![User Avatar](https://pbs.twimg.com/profile_images/1572199012790603778/GF4NXSKr_normal.jpg)](https://twitter.com/DefiIgnas) [Ignas | DeFi Research](https://twitter.com/DefiIgnas) [@DefiIgnas](https://twitter.com/DefiIgnas) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/DefiIgnas/status/1761040556891963756) $UNI is up by 40% on the proposal to introduce a fee to reward UNI holders who stake and delegate their tokens. It's not the first time the proposal has been suggested, but this time it's [@eek637](https://twitter.com/eek637) who is a Gov Lead at @uniswapfnd. ![](https://pbs.twimg.com/media/GHB5DW8aMAAKyg8.jpg) [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 390](https://twitter.com/fraxfinance/status/1761102567667548277)[ 0:25 • 24 Feb 2024 ](https://twitter.com/fraxfinance/status/1761102567667548277) Going even deeper, I think this sets precedent for all governance tokens in crypto. **Being just a governance token won’t cut it anymore.** For any protocol, not just in DeFi, it's crucial for your token to gain value for holders; otherwise, there's little incentive for people to buy it. I said this multiple times before, but I think that the so-called crypto supercycle comes when profitable protocols figure out how to share value with their token holders. [![User Avatar](https://pbs.twimg.com/profile_images/1580000525478727681/v_hDqBFb_normal.jpg)](https://twitter.com/KyleReidhead) [Kyle Reidhead](https://twitter.com/KyleReidhead) [@KyleReidhead](https://twitter.com/KyleReidhead) [![Twitter Logo](https://paragraph.xyz/editor/twitter/logo.png)](https://twitter.com/KyleReidhead/status/1747607993397411904) The crypto supercycle comes when profitable protocols figure out how to share value with their token holders $ETH has already done this But when Uniswap, Maker, L2s, etc. all figure this out at scale That’s when the supercycle begins Not one day before this moment. [![Like Icon](https://paragraph.xyz/editor/twitter/heart.png) 5](https://twitter.com/KyleReidhead/status/1747607993397411904)[ 18:43 • 17 Jan 2024 ](https://twitter.com/KyleReidhead/status/1747607993397411904) Ethereum has done this. Uniswap is about to.  Next up, expect Maker, Lido, Rocketpool, L2s like Arbitrum, other DEXs like Frax, protocols like ENS or even marketplaces like BLUR to follow suit and start sharing revenues with their token holders.  When all of these protocols/apps figure this out at scale, that’s when the supercycle begins. Not one day before this moment. I think that few understand this… * * * Thanks for reading. And remember, you're strong, you’re powerful, you’re alpha! ❤ ### **How'd you feel about our read today?** * ⭐⭐⭐⭐⭐ [Loved it!](https://bit.ly/five_star_feedback) * ⭐⭐⭐ [Decent!](https://bit.ly/three_stars_feedback) * ⭐ [Kyle, step it up!](https://bit.ly/one_star_feedback) * * * ### **Are You Fairly New to Crypto & Web3?** Let us help you wrap your head around this industry that’s constantly transforming. Take our Free 1-hour Web3 Rabbit Hole Course to learn the foundational components you need to start building and investing successfully. 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