The native token of Uniswap, UNI recorded a significant surge on December 2. The report shows that the digital asset has surged more than 7% after a proposal was made about the trading fees.
Uniswap Offers a Trading Fee Proposal
It was recently reported that a proposal had been made at Uniswap that was related to the trading fees.
According to the reports, the proposal calls for a vote where it will be decided about reserving a certain portion of trading fees.
The trading fees mentioned here are the ones that come into force when a UNI transaction is executed.
The proposal asks that a certain portion of the trading fees should be reserved but for reasons unknown.
With the trading price of UNI experiencing a significant surge, it is obvious that the proposal has been received well by the Uniswap community.
If the community did not like it, then the trading price of UNI would experience a downtrend and would start moving in a downward direction.
Application of the New Rule
It has been added in the proposal that the new rule for trading fees will be implemented in three different pools. These pools belong to the Uniswap V3.
These pools include the USDC-ETH pool, the DAI-ETH pool, and the ETH-USDC pool. The 1st pool in the list would be in the 1% fee tier, the 2nd pool will be in the 0.3% fee tier, and the 3rd pool would be in the 0.05% fee tier.
If the new proposal is passed, then with immediate effect, 1/10th of every trading fee will go towards the reserve. The amount will be sent directly over to the treasury of the Uniswap protocol.
For now, it seems that the teams have decided to take things one step at a time. It is yet to be confirmed by the Uniswap teams what the reserved funds will be used for.
The only thing that can be expected from the funds given the current market condition is to prepare the protocol for any kind of market upset.
The entire crypto industry is being very cautious after the FTX incident has taken place. The proof-of-reserve is being adopted throughout the crypto-verse.
People need assurances and confirmations that their funds are safe with the cryptocurrency protocols. They also want to know if their funds will be safe in case a major catastrophe takes place with the protocol.
Therefore, the platforms are also coming up with different kinds of strategies from their end to deal with the possibility of major crashes.
It is yet to be confirmed by the teams behind Uniswap what the funds will be utilized for. As of yet, we can go with the only possibility or potential reason that comes to mind when thinking about the reserves.
The Only Piece of Info Known about the Reserve Funds
Prior to being voted on, the proposal caught the attention of the majority of the UNI community.
They are spending a lot of money on the asset because the proposal is sort of an assurance that its assets will be safer.
With this perception in mind, people are investing heavily in UNI and are hopeful that things will turn out to be fine. As the protocol becomes safer and more securer, it means more adoption will come towards the asset.
The teams at Uniswap have revealed that they do intend to distribute the funds accumulated in the reserve from the particular process, among the users.
They will ensure that the users get to benefit from their contribution and do not grow a feeling that their funds are going towards a lost cause.
With the price of the token moving upward, it is approval from the UNI community that they like the idea. The full potential and the advantage of the trading fees proposal will be recognized when it is passed.