Originally published on: October 14, 2024
Uniswap Labs and UNI token holders could be looking at a potential windfall of $468 million per year thanks to the launch of Unichain, a new layer 2 blockchain. This move would redirect fees that were previously paid to Ethereum validators directly into the pockets of Uniswap Labs and UNI token holders, according to a report by DeFi expert Michael Nadeau.
With Unichain’s launch, Uniswap Labs would have the opportunity to capture all Maximum Extractable Value (MEV) on the network, as it owns all validators, eliminating the possibility of Ethereum validators siphoning off MEV. Nadeau estimates that MEV accounts for about 10% of total fees generated on Uniswap, totaling $100 million over the past year.
In addition to benefiting creators and token holders, Uniswap’s liquidity providers could also see gains from Unichain through participation in settlement and MEV capture via staking. However, this shift in revenue streams could negatively impact Ethereum validators and ETH token holders, reducing fees and burned ETH returned to the blockchain.
Uniswap, known as the leading decentralized exchange by trading volume, launched Unichain on October 10. The new layer 2 promises faster, cheaper transactions and enhanced interoperability across multiple blockchain networks. While the move has sparked debate within the DeFi community, proponents believe that Unichain will streamline the user experience, provide centralized liquidity, and mitigate issues associated with chain fragmentation.
Despite some skepticism, the launch of Unichain signifies a significant step forward for Uniswap and its ecosystem. As the landscape of decentralized finance continues to evolve, the potential for $468 million in annual earnings for UNI holders highlights the lucrative opportunities that innovation in blockchain technology can offer. Stay tuned for more updates on Uniswap’s journey in the dynamic world of DeFi.
