Uniswap community votes against liquidity-provider fee proposals

Members of the Uniswap decentralized-exchange community voted against proposals to introduce fees for using the protocol by liquidity providers.

Forty-five per cent opposed introducing a usage fee for the exchange. The remainder split into two camps:

• Forty-two per cent backed the option of a fee equal to one fifth of the contributed amount;
• Thirteen per cent proposed charging one tenth of the funds.

A preliminary test of the feature in December 2022 showed that users were generally receptive to the change. However, some feared the risk of capital outflows due to reduced income for liquidity providers.

The proposal was put to a vote on May 31 by the Uniswap developers — GFX Labs.

“Uniswap has the ability to enable protocol usage fees and prove that the platform can generate substantial revenue,” said the GFX team.

According to the developers, for the DEX it is necessary to verify the identities of liquidity providers to prove their affiliation with professional market makers rather than ordinary large traders.

The final vote on the proposal is expected by the end of 2023. Developers are likely to take user feedback into account and adjust the options to better serve the community’s interests.

In April, the number of active users on Uniswap reached 84,796 for the first time since May 2021. The rise is thought to be linked to a renewed wave of meme-token popularity.

In May, the community proposed to deploy the third version of the protocol on Base — the layer-two network of the Coinbase crypto exchange.