How much will the fee proposal impact UNI price? The market might already be overvaluing UNI. UNI currently trades at 25x implied revenue ($216M/$8.5B marketcap). PUMP trades at 5.3x, HYPE at 9.3x. - Of Uniswap V2's 0.3% fee, 0.05% is allocated for buybacks and burns. - The treasury is also burning 100M UNI, a 10% total supply reduction to compensate for years of no fee switch. - Total fees could decline as wash traders will now have to pay a fee. Uniswap is the largest DEX, doing $124B in volume last month ($1.48T annualized). The Bull Case: How Much Will Uniswap Make From Fees? Uniswap is the #1 fee-generating protocol ($108M, 30D). This annualizes to $1.3B, or $216M of potential buybacks. The fee switch proposal removes the 0.15% frontend fee, which Uniswap Labs has banked $180M from. This could theoretically increase volume. Uniswap ATH monthly fees were $251M in 2021, with average monthly fees over the past year coming out to $93M. Is UNI undervalued? The amount of UNI buybacks is impacted by: - Filtering out wash trading - V4 fees (TBD) - Swap volume growth - ~$7.5M sequencer fees Right now, UNI is not undervalued; it trades at an implied 25x revenue multiple (PUMP 5.3x, HYPE 9.3x). The Bear Case Wash trading makes up a lot of volume on Uniswap: - LPs holding large token positions can trade for free; they pocket 100% of fees. - Fee switch activates → wash trading stops → revenue falls. Capped Upside: - The same revenue multiple that can provide a floor for Uniswap’s valuation can also set a ceiling. - Who wants to buy at a 50x, 100x revenue multiple? - The reality is that market attention often matters more than buybacks ever could. Industry Impact: - Yesterday Steakhouse pushed a Lido governance proposal to add automated LDO buybacks. - The market won’t tolerate pure governance tokens with no utility or claim on revenue. - Post-fee switch approval, Uniswap probably becomes the #3 protocol by revenue, behind Hyperliquid and Pumpfun.