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Uniswap fee switch expansion drives UNI up 15% as governance vote targets eight Layer 2 chains and boosts protocol revenue and token burns.
Author: Kritika Gupta
High attention and emotional sentiment detected.
27th February 2026- The Uniswap fee switch expansion is driving fresh momentum across DeFi markets as UNI climbed roughly 15 percent in the past 24 hours, outperforming Bitcoin’s 4.7 percent and Ether’s 8.5 percent gains. Traders are positioning ahead of a crucial governance vote that could significantly broaden protocol revenue capture. The proposal, scheduled for on chain voting from February 27 to March 1, 2026, aims to activate protocol fees across eight major Layer 2 networks and automate fee collection on all remaining V3 pools. If approved, the Uniswap fee switch expansion could generate about 27 million dollars in additional annualized revenue on top of the roughly 34 million dollars already allocated to UNI burns.
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Crypto Promo
@CryptoVPromo
@CoinDesk @Uniswap This is what real fundamentals look like. Fee switch expanding to 8 L2s = actual revenue flow, not just narrative. If UNI starts capturing protocol cash flow consistently, the valuation model changes completely. $27M/year is just the beginning if volumes keep scaling.
New: @Uniswap's $UNI jumps 15% as governance vote to expand fee switch across eight L2 chains gains momentum, potentially adding $27M in annual revenue. https://t.co/Dk1fBFMSvS
10:23 AM·Feb 26, 2026
Jeongmin
@nice_investment
@CoinDesk @Uniswap The expansion of the fee switch to eight L2s like Arbitrum and Base is a massive step toward long-term value accrual for UNI. Adding an estimated $27M in annual revenue on top of the existing Ethereum mainnet burns shows that Uniswap is finally moving beyond being just a
New: @Uniswap's $UNI jumps 15% as governance vote to expand fee switch across eight L2 chains gains momentum, potentially adding $27M in annual revenue. https://t.co/Dk1fBFMSvS
10:20 AM·Feb 26, 2026
Martin M.
@martin_musagara
@CoinDesk @Uniswap Uniswap’s $UNI jumping 15% shows the market is pricing in real fundamentals. If the fee switch expands across eight L2s, an extra $27M in annual revenue turns governance into tangible value, not just votes, but cash flow.
New: @Uniswap's $UNI jumps 15% as governance vote to expand fee switch across eight L2 chains gains momentum, potentially adding $27M in annual revenue. https://t.co/Dk1fBFMSvS
09:48 AM·Feb 26, 2026
The rally follows the successful activation of Uniswap’s long awaited fee switch under the UNIfication governance proposal, which passed in December 2025. That initiative enabled protocol fees for V2 and select V3 pools on Ethereum mainnet, along with Unichain sequencer fees, and routed them into a buyback and burn mechanism for UNI.
Since more than 67 percent of Uniswap’s trading volume now takes place on Layer 2 networks, the community quickly advanced to a second phase after the initial rollout showed positive results. Market adjusted total value locked improved, and the protocol burned more than 5.5 million dollars worth of UNI.
Although Uniswap embedded protocol fee logic in its contracts during the V2 era, governance kept it inactive for years. Between 2020 and 2024, community members hesitated because they feared that diverting 10 to 25 percent of liquidity provider fees could push volume and liquidity toward lower fee competitors such as SushiSwap or emerging Layer 2 native decentralized exchanges. However, the December 2025 vote broke that deadlock and marked the first successful on chain activation after years of debate.
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The current Uniswap fee switch expansion proposal consists of two parallel on chain votes due to transaction size constraints. If approved, Uniswap will activate protocol fees across Arbitrum, Base, OP Mainnet, Celo, Soneium, Worldchain, X Layer, and Zora.On Ethereum mainnet, the proposal will extend fees to all remaining V3 pools using a new smart contract called the v3OpenFeeAdapter.
This adapter automatically applies tier based protocol fees to every liquidity pool according to its liquidity provider fee tier. Governance can still override settings if needed, but the system removes the need for manual pool by pool votes. Fees collected on each Layer 2 network will flow into dedicated TokenJar contracts before the protocol bridges them back to Ethereum and burns them at the 0xdead address.
If the measure passes, Uniswap could push annualized protocol revenue close to 60 million dollars at current volumes. Consequently, UNI burns would accelerate and deepen the token’s value accrual narrative. Holders would benefit from sustained deflationary pressure and a direct link between decentralized exchange activity and token economics.
However, higher protocol fees on competitive Layer 2 networks could pressure liquidity if rivals offer better returns. Therefore, Uniswap must maintain market share while the broader crypto recovery continues. Overall, the vote underscores growing momentum around sustainable, revenue backed DeFi token models.
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