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Uniswap Labs’ announcement of Unichain, its own Ethereum-based blockchain, led to a 6% increase in the UNI token’s value.
Key Notes
Uniswap Labs announced the launch of its Ethereum-based blockchain Unichain.Unichain aims to address high fees and slow transaction speeds in the DeFi space.Following the announcement, UNI token surged by 6%.Uniswap Labs made headlines on Thursday after announcing its plans to launch its own Ethereum-based blockchain, dubbed “Unichain”. This move aims to tackle some of the most pressing challenges facing decentralized finance (DeFi) on Ethereum, such as high fees and slow transaction times. As a result of the news, Uniswap’s governance token, UNI UNI $8.11 24h volatility: 4.8% Market cap: $6.10 B Vol. 24h: $1.01 B , recorded a major rally.
Uniswap, one of the leading names in the DeFi space, has seen massive growth since its launch. According to DefiLlama, the Uniswap Protocol has processed $2.4 trillion in trading volume, with millions of users and close to half a billion-lifetime trades. Moreover, the platform has around $4.6 billion in total value locked (TVL). Yet, despite this impressive growth, Ethereum-based DeFi has remained somewhat fragmented and hampered by expensive, slow transactions.
Unichain, the newly announced blockchain, seeks to bridge these gaps by offering faster, cheaper, and more seamless transactions across multiple chains. By providing an improved DeFi experience, Uniswap hopes to solidify its dominance in the rapidly evolving space.
The testnet for Unichain went live on October 10, with the full mainnet launch expected by the end of the year.
A New Revenue Sharing Model
One of the most anticipated aspects of Unichain is its staking mechanism, which will allow UNI holders to lock up their tokens in exchange for rewards. This new model presents a way for users to share in the platform’s success, something UNI holders have long been calling for.
The concept of sharing revenue with UNI holders isn’t new — proposals to activate Uniswap’s so-called “fee switch” have been on the table for years. These proposals aimed to distribute a portion of Uniswap’s revenue to UNI holders who delegated their tokens for protocol governance. However, due to concerns about potential conflicts with US securities laws, such proposals struggled to gain traction.
Earlier this year, in May, the Uniswap Foundation, a nonprofit responsible for supporting the protocol, canceled a vote on the fee switch proposal just before it was set to begin.
Uniswap Token Price Surge
Soon after the Unichain announcement, Uniswap’s native cryptocurrency shot up. At the time of writing, UNI is trading around $8.06, up by around 6% in the last 24 hours. The cryptocurrency has also seen a 25% uptick in its market cap in the past week, currently sitting at $4.84 billion.
UNI’s value spike following the Unichain announcement reflects optimism and support from the DeFi sector. However, it is worth noting that UNI is still down 82% from its all-time high of $44.97 in 2021.
Interestingly, unlike the fee switch, Unichain will rely on a distributed network of validators to process transactions. To become a validator, users must stake their UNI tokens and, in return, will receive staking rewards. This approach is seen as a positive shift for the protocol’s future, but some in the community believe it doesn’t completely replace the potential benefits of the fee switch.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Uniswap (UNI) News, Altcoin News, Cryptocurrency News, News
With a background in finance and a passion for innovation, Anisha has been covering the ever-evolving world of crypto for over four years. Her deep understanding of the crypto market have made her a trusted source for analysis and news. Whether it's dissecting the latest trends or decoding whitepapers, Anisha is dedicated to bringing clarity to the world of digital assets.
