Uniswap fee switch is planned to expand to eight chains, and burning UNI can earn protocol revenue

Uniswap token holders will begin voting on a significant proposal this Thursday to activate the protocol fee switch for two versions of the protocol on eight Layer 2 blockchains, including Base, Arbitrum, and OP Mainnet. Once activated, at least one-sixth of the fees collected from liquidity providers on the relevant chains will be transferred to the token pool for investors who burn an equivalent amount of UNI tokens, which is expected to more than double existing yields.

The fee switch has been live on the Ethereum mainnet v2 and some v3 liquidity pools since December last year, generating a total of $3.3 million in revenue to date. Since 2026, Base has surpassed Ethereum to become the largest source of fees for Uniswap, generating $55 million in fees.

Boosted by the proposal news, UNI has risen 9% in the past seven days, outperforming the declining Bitcoin and Ethereum during the same period. The final vote will conclude on March 4.