Why Uniswap Surged More than 12% This Weekend
Key Points
A governance proposal that could re-shape Uniswap's economics is receiving a lot of love from its core community.
By better aligning the governance forces behind the scenes, the hope is that this project can grow faster and more seamlessly.
Additionally, a token burn mechanism is among the key items investors have wanted for some time, included in this proposal.
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Since 4 p.m. ET on Friday, Uniswap (CRYPTO: UNI) has been one of the best-performing tokens in the market. This decentralized exchange appears to be on the minds of many investors, with an impressive 12.9% surge seen over the past three days.
Let's dive into one key driver of today's move in Uniswap, with the vast majority of this move taking place over the weekend (UNI tokens are currently down nearly 3% over the past 24 hours, as of 4 p.m. ET on Monday).
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Proposal to activate protocol fees driving positive sentiment
Source: Getty Images.
It helps when the entire cryptocurrency market is rallying, as it was this morning and over the weekend. However, for investors in Uniswap, most of their attention is clearly being focused on a governance vote this weekend, which aims to align Uniswap Labs (the parent company behind this project), its Foundation, and overall governance regarding the activation of protocol fees.
In addition to this key piece of the proposal, another facet driving investor excitement is a long-discussed burn mechanism for the project's native UNI token. Essentially, the idea behind this "Unification" proposal is to bring Uniswap's economic incentives and overall operating model under a single framework. By burning 100 million UNI tokens retroactively and having future fees burned, investors are hopeful that this proposal could improve the supply and demand fundamentals for this token in the future.
I believe this move is a positive step, and it's clearly what investors wanted to see. Unlike other projects that have seen recent proposals that have not been well-loved by their communities, Uniswap's attention to feedback and implementation of key improvements its community is clamoring for is undoubtedly a big deal.
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Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uniswap Protocol Token. The Motley Fool has a disclosure policy.
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