Uniswap’s UNI gained 20% as a board proposal to distribute protocol revenues to token holders receives overwhelming assist in a temperature examine earlier than voting.
The initiative, if accepted, may pay between $62 million and $156 million to UNI homeowners in annual dividends, one observer estimates.
Uniswap’s rewards system may encourage different Defi protocols, however may invite regulatory scrutiny.
Decentralized trade Uniswap’s governance token (UNI) defied the broader crypto correction, rising to a brand new 26-month excessive on Wednesday because the proposal to reward token holders from protocol income moved nearer to changing into a actuality.
A so-called “temperature examine” to gauge neighborhood sentiment on the board improve exhibits near-universal assist for the proposal. Snapshot of the temper a couple of hours earlier than the shut. Uniswap is run by a decentralized autonomous group (DAO), the place UNI token holders vote on choices with their holdings utilizing blockchain.
The temperature examine is the final step earlier than the vote within the chain on activating the proposal, begins on March 8.
UNI superior greater than 20% previously 24 hours, reaching $17 for the primary time since January 2022 earlier than pulling again barely to $15.7. The token outperformed bitcoin’s (BTC) 3% restoration after yesterday’s plunge and the broad-market, altcoin-heavy CoinDesk 20 Index’s (CD20) 1% decline over the identical interval.
The rally is pushed by traders revaluing UNI in gentle of the main initiative for an intensive overhaul of governance, through which a scheme to reward UNI holders who’ve staked and delegated their tokens, distributing a portion of the protocol’s income from trade charges.
Primarily based on Uniswap’s protocol income, the improve may pay between $62 million and $156 million to UNI homeowners in annual dividends, Colin Wu estimated.
UNI shot up 60% instantly after its proposal submission on February 23, and has since greater than doubled in worth, the CoinDesk Uniswap Value Index (UNX) exhibits.
Uniswap’s instance may encourage different decentralized finance protocols (DeFi) to observe go well with. Frax Finance has already revealed plans to suggest a income sharing mechanism just like Uniswap’s.
Nevertheless, digital asset supervisor 21Shares famous that token reward schemes may appeal to scrutiny from regulators.
“It may classify sure belongings as a safety as a result of they could meet the necessities of the Howey take a look at,” 21Shares analysts famous.