Uniswap’s governance token, UNI, surged by 60% following a proposal that outlines a substantial overhaul to reward token holders.

Following a proposal by Erin Koen, a key figure in the Uniswap Foundation, the governance token of Uniswap, UNI, experienced a substantial 60% surge. This surge occurred after Koen introduced a proposal aimed at overhauling the governance system of the Uniswap protocol. The proposal outlines plans to distribute protocol fees among UNI holders who actively stake and delegate tokens, thereby revitalizing the decision-making process within the protocol.

The proposal, presented by Erin Koen, has a dual objective of fortifying and rejuvenating Uniswap’s governance structure while also rewarding UNI token holders who engage in staking and delegation. In an X post, Erin Koen stated, “I believe we should upgrade the protocol so that its fee mechanism rewards UNI token holders that have staked and delegated their tokens.”

This proposal represents a significant development for Uniswap, the largest decentralized exchange in terms of trading volume. It signifies a departure from the previous year’s attempt to reward token holders with accumulated fees. Last June, the Uniswap community rejected a proposal to activate fees for various liquidity pools, distributing a portion of the revenue among token holders. In a subsequent move in October, the exchange initiated a 0.15% fee on crypto swaps involving ETH, USDC, and other tokens on the protocol’s interface.

Pending community approval in a vote, the proposed overhaul would facilitate the permissionless and programmatic collection of protocol fees, distributing them proportionally to UNI token holders actively engaged in staking and delegation. Recently, UNI was traded at $12, marking an impressive nearly 60% surge over the past 24 hours and achieving its highest price point since April 2022. This notable increase outpaced the relatively stable price movements of Bitcoin (BTC) and the broader CoinDesk 20 Index (CD20).