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Unisap’s proposal to charge LPs fails in first vote

A poll of Uniswap’s governance community on June 1 found divided support for a feature that could eventually charge liquidity providers.

Poll gets mixed support

On May 10, GFX Labs published a proposal titled “Making Protocol Fees Operational,” which suggests a project for Treasury to collect fees from liquidity providers.

On June 1, a poll to determine support for that proposal concluded with close results. About 45% of the votes cast expressed opposition to the fees. Meanwhile, 42% of votes supported charging 1/5 of the pool fee across all Uniswap v3 pools, while 12% voted in favor of charging 1/10 of the pool fee across those pools.

Although support for a fee collectively exceeded opposition to a fee (55% versus 45%), either category received more support than the “no fee” category.

Fifty-six (56) million UNI tokens ($280 million) were used to cast the vote.

These results will not necessarily prevent further votes on the proposal. The poll page states that the polling data will be used to prepare a more formal “temperature check” vote. Still, the opposition to the fee appears to be significant.

Should Uniswap introduce fees?

GFX Labs’ initial proposal states that the fee will demonstrate that Uniswap can generate revenue. The fee will also show that the liquidity provider is operating professionally and generating enough revenue to not require a waiver.

While governance members expressed tentative support for the idea, several members, including GFX itself, noted that such a decision could potentially have regulatory and legal implications. The offer may also require the payment of income tax.

Finally, the current proposal indicates that this plan will not affect the fees paid by the majority of Uniswap users. Instead, it will charge fees directly to liquidity providers.

Like most Uniswap decisions, the choice will be made by users who hold a significant stake in Uniswap’s UNI tokens. Similar votes have recently taken place around other proposals such as Coinbase’s base network and Binance’s deployment to the BNB chain.

Posted: Uniswap, DeFi, Exchange author Mike Dalton Journalist on CryptoSlate

Before transitioning to crypto writing in 2018, Mike studied library and information science. Currently, he resides on the west coast of Canada.

Editor News Desk Editor at Crypto Slate

CryptoSlate is a comprehensive and relevant source for crypto news, insights and data. Focusing on Bitcoin, Macro, DeFi and AI.

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