Uniswap’s UNI gained 20% as a governance proposal to distribute protocol revenues amongst token holders will get overwhelming assist in a temperature examine earlier than voting.
The initiative, if authorized, might pay out between $62 million and $156 million to UNI homeowners in annual dividends, one observer estimated.
Uniswap’s reward scheme might encourage different Defi protocols, however could entice regulatory scrutiny.
Decentralized change Uniswap’s governance token (UNI) defied the broader crypto correction and surged to a brand new 26-month excessive worth on Wednesday because the proposal to reward token holders from protocol revenues was inching nearer to develop into a actuality.
A so-called “temperature examine” to gauge the neighborhood’s sentiment concerning the governance improve exhibits just about common assist for the proposal in a Snapshot voting a number of hours earlier than conclusion. Uniswap is led by a decentralized autonomous group (DAO), the place UNI token holders vote on selections with their holdings utilizing blockchain.
The temperature examine is the final step earlier than the on-chain vote about activating the proposal, scheduled to start on March 8.
UNI superior over 20% prior to now 24 hours, hitting $17 for the primary time since Jan. 2022 earlier than barely retreating 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 throughout the identical interval.
The rally is pushed by buyers revaluing UNI in gentle of the main governance overhaul initiative, which laid out a scheme to reward UNI holders who staked and delegated their tokens, distributing part of the protocol’s revenue earned from change charges.
Based mostly on Uniswap’s protocol earnings, the improve might pay out between $62 million and $156 million to UNI homeowners in annual dividends, Colin Wu estimated.
UNI skyrocketed 60% instantly after the proposal submission on Feb. 23, and has greater than doubled in worth since then, the CoinDesk Uniswap Value Index (UNX) exhibits.
Uniswap’s instance might encourage different decentralized finance (DeFi) protocols to comply with swimsuit. Frax Finance already revealed plans to suggest a income sharing mechanism much like Uniswap’s.
Digital asset supervisor 21Shares, nevertheless, famous that token rewards schemes could entice scrutiny from regulators.
“It might classify sure property as a safety because of probably assembly the prongs of the Howey check,” 21Shares analysts famous.