Community supports token reward scheme as Uniswap token reaches highest point in 26 months
Uniswap’s native token, UNI, experienced a significant surge, reaching its highest level in two years on March 6. This surge came as the total market capitalization of altcoins surpassed $310 billion for the first time since April 2022.
Within a span of 24 hours, UNI saw a 20% increase in value and was traded at a price of over $15.60. This rise in price was driven by a proposal to introduce protocol rewards for UNI token holders, which had received positive feedback during a temperature check. The final on-chain vote for this proposal is scheduled for March 8.
The last time UNI was valued around this price range was in the early second quarter of 2022, just before the digital asset market experienced a decline following Terraform’s collapse and several crypto bankruptcies.
Decentralized protocols typically conduct temperature checks to gauge the community’s sentiment towards a proposed change or idea. The Snapshot vote on Uniswap’s DAO forum demonstrated unanimous support for distributing token rewards to UNI holders.
If this proposal is approved after the primary on-chain vote, UNI holders who delegate and stake their tokens could potentially receive a portion of Uniswap’s yearly protocol earnings, amounting to an estimated $62 million to $156 million in annual income.
The success of this initiative by Uniswap could pave the way for other decentralized finance (defi) giants like Frax Finance to implement similar revenue-sharing schemes. However, analysts from 21Shares have raised concerns that such programs could attract regulatory scrutiny, as certain crypto assets may meet the criteria outlined in the Howey test for securities.
According to LookOnChain, a significant UNI holder sold 41,000 tokens as the cryptocurrency reached a 26-month high. The identity of the seller remains unknown but speculations suggest that it could be a member of the Uniswap team, an investor, or an advisor.
Despite the sale, the UNI holder still possesses over 358,326 tokens, as per data from Etherscan.
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