Uniswap Token Holders Set to Earn Over $460M a Year: DeFi Report

Key Points:

• Uniswap token holders could earn over $460 million annually from fees previously paid to Ethereum.
• Ethereum validators and Ether holders are expected to lose revenue as Unichain takes over transaction fees.

Because Uniswap Labs has just unveiled its new Layer 2 blockchain, dubbed Unichain, this will be of immense benefit to the firm and Uniswap token holders to the tune of more than $460 million per year in fees that were aimed at Ethereum.

Read more: Uniswap Labs Settlement With CFTC Completes $175,000 Fine 

Uniswap Labs and Uniswap Token Holders Set to Rake in Over $460 Million Annually

Founder of DeFi Report Michael Nadeau pointed out that the main financial beneficiaries of the introduction of Unichain will be Uniswap Labs and Uniswap token holders, while Ethereum ETH holders are going to take a loss. This could very well have the effect of having Uniswap and its community earn at the expense of Ethereum validators, Nadeau said.

Nadeau estimated Ethereum validators earned $368 million in fees from Uniswap over the past year, but with Unichain, that revenue will now accrue directly to Uniswap Labs and its stakeholders. He shared his experience in a post on X.

The other main advantage to Uniswap Labs would be greater control of MEV, or Maximum Extracted Value, the revenues available to validators from transaction sequencing. Since on Unichain, Uniswap will have all the validators, this source of income is no longer available to Ethereum validators.

Nadeau added that MEV fees account for about 10% of all Uniswap transactions and accounted for about $100 million last year. He said that MEV proceeds could also be partially distributed to Uniswap token holders to create additional incentives.

Ethereum Validators Face Revenue Loss as Unichain Takes Over

Nadeau further added that Uniswap’s liquidity providers could benefit from the new blockchain as well by participating in the settlement processes and obtaining MEV by staking on Unichain. Conversely, validators of Ethereum and holders of the Ether token are likely to incur losses on account of burned ETH being reduced and lowered transaction fees once Unichain is launched.

Unichain, launched on 10 October, promises faster, cheaper transactions with better interoperability between blockchains. The layer-2 network is for speed but also for seamless multi-chain exchanges because of the native cross-chain transaction capabilities that come integrated through Superchain.