- Uniswap (UNI) price drops despite plans to expand protocol fees and burn tokens.
- If approved, the fees will be activated across all v3 pools and eight additional chains.
- Currently, the key support sits at $3.38 while the immediate resistance is at $4.24.
Uniswap’s native token, UNI, has seen its price dip despite the ongoing governance push to expand protocol fees across more chains and all v3 pools.
While the protocol fee expansion promises to increase token burns and revenue for the protocol, short-term price action has remained under pressure.
The dip comes amid a broader downturn in the cryptocurrency market, with traders closely watching key support and resistance levels.
Uniswap protocol fee expansion proposal
The Uniswap community is currently voting on a proposal to activate protocol fees across all remaining v3 pools on Ethereum mainnet.
In addition, the plan includes extending fees to eight other networks, including Arbitrum, Base, Celo, Optimism Mainnet, Soneium, X Layer, Worldchain, and Zora.
This proposal is notable because it is the first to use the updated governance process known as UNIfication.
This system allows fee parameter changes to bypass the traditional proposal stage, speeding up voting while retaining on-chain security.
If approved, fees collected on these chains would flow to chain-specific TokenJar contracts before being bridged back to the Ethereum mainnet.
From there, UNI tokens would be burned, effectively reducing supply and increasing scarcity over time.
The proposal also introduces a new tier-based system for v3 pools, known as v3OpenFeeAdapter.
Instead of setting fees pool by pool, the system applies fees based on liquidity provider fee tiers.
This simplifies governance oversight and ensures every pool automatically contributes to protocol fee revenue.
Market response
Despite these ambitious plans, UNI’s market performance has struggled.
The token opened today at $3.56 but quickly fell, losing 4.8% from its opening price.
UNI briefly rallied to $3.59 but faced resistance and could not sustain momentum.
This highlights that market sentiment is cautious, even as governance improvements promise long-term benefits.
Currently, UNI is trading around $3.40, down roughly 4.7% in the last 24 hours.
Its market cap sits at just over $2.15 billion, while total value locked in Uniswap remains above $3 billion.
Uniswap price forecast
While the protocol fee expansion may boost long-term value and increase token burns, market reaction shows that short-term price action is likely to remain volatile.
The support at $3.38 is critical, according to market analysis.
If the token holds above this level, it may attempt to move toward the first major resistance at $4.24.
If the token breaches $4.24, it could open the path to $4.76, with a third resistance at $5.41.
However, failure to maintain above the support at $3.38 could see UNI struggle in the short term, limiting the impact of positive governance developments.