Key Points:
- New 0.15% swap fee applies to 11 tokens including ETH when traded on Uniswap’s app and wallet.
- Critics say the fee benefits Uniswap while neglecting UNI holders.
- Some speculate on Uniswap also adding KYC requirements down the line.
Leading decentralized exchange Uniswap has drawn criticism after introducing a 0.15% swap fee on certain tokens traded through its web app and wallet. The new fee comes in addition to the existing protocol fee governed by UNI token holders.
On October 17, Uniswap founder Hayden Adams announced the changes, stating that the swap fees on select tokens would take effect starting October 18. He described it as Uniswap’s first and one of the lowest interface fees compared to other exchanges in the industry.
According to Adams, the fresh revenue stream will support Uniswap’s continued research, development, improvements and expansion of crypto and decentralized finance.
The initial 11 assets subject to the new 0.15% swap fee include ETH, USDC, WETH, USDT, DAI, WBTC, agEUR, GUSD, LUSD, EUROC and XSGD. The fees only apply when both the input and output tokens of a trade are fee-liable assets.
Adams pointed out Uniswap’s numerous releases over 2022, including mobile wallets on iOS and Android, Uniswap X, upgrades to its web app, Permit2 and draft code for Uniswap v4.
With the move, Uniswap joins other platforms like the MetaMask wallet that charge swap fees atop protocol fees. However, at just 0.15%, Uniswap’s fee is far lower than MetaMask’s 0.875% rate that can be substantial on larger trades.
The fee introduction provoked strong reactions within the crypto community. Crypto commentator Autism Capital remarked that the additional revenue goes straight to Uniswap, while neglecting UNI token holders who were “tricked into buying it”.
Others like crypto YouTuber yourfriendSOMMI agreed the decision disregarded UNI holders. There was also unconfirmed speculation that Uniswap plans to introduce KYC measures.
According to investor Scott Melker, the potential addition of an optional KYC verification tool in Uniswap v4 has reignited debates about the future of decentralized finance.
In terms of price reaction, Uniswap’s UNI token has seen heavy declines amid the ongoing bear market. For holders already disappointed by the lack of fee revenue, having to pay extra swap fees adds insult to injury.
UNI has dropped around 1% since the swap fee announcement. At press time, it traded at $4.10 after falling 9% over the past two weeks.
While the lower 0.15% rate is still competitive compared to centralized exchanges, some community members argue the additional fee clashes with Uniswap’s decentralized ethos. Others believe the revenues will ultimately benefit the protocol, even if the optics of charging users without rewarding UNI holders are unfavorable.
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Disclaimer: Please note that the viewpoints and perspectives expressed by the author, as well as any individuals referenced in this article, are intended solely for informational purposes. They should not be construed as financial or investment advice. It’s important to acknowledge that investing in or trading cryptoassets carries inherent financial risks.
