Uniswap Launches UNI Token, Ethereum Gas Fees Hit All-Time High

On September 16, decentralized exchange Uniswap announced that it is officially going live with the long-awaited release of its governance token, dubbed UNI. After the platform started distributing 15% of the total UNI supply, gas fees on the Ethereum Network hit an all-time high of 800 gwei, a number exceeding the previous record almost twice.

In the announcement, Uniswap said that the public release of their protocol was inspired by Ethereum’s vision for a decentralized ecosystem. The company claimed that, in less than two years, the protocol has supported over $20 billion volume traded by over 250,000 unique addresses, secured over $1 billion liquidity deposited by over 49,000 unique liquidity providers, and emerged as a foundational DeFi infrastructure with integrations across hundreds of interfaces and applications.

“Having proven product-market fit for highly decentralized financial infrastructure with a platform that has thrived independently, Uniswap is now particularly well positioned for community-led growth, development, and self-sustainability. The introduction of UNI (ERC-20) serves this purpose, enabling shared community ownership and a vibrant, diverse, and dedicated governance system, which will actively guide the protocol towards the future,” the organization stated.

Uniswap has allocated 1 billion UNI minted at genesis, which will become accessible over the course of the next 4 years. According to the announcement, 21.51% (215,101,000 UNI) of the assets will be distributed among team members and future employees, 17.80% (178,000,000 UNI) to investors, and 0.69% (6,899,000 UNI) to advisors, all with 4-year vesting. The company has decided to give away 60.00% (600,000,000) of the tokens to community members that have participated in Uniswap V1 or Uniswap V2.

The community airdrops consist of 400 UNI and could be claimed by any person that has previously engaged with the protocol. Even users who have only swapped tokens on the platform, without providing any liquidity, could take the drop, which is currently evaluated at around $2,000. In the first three hours after the news went viral, 13,000 people had already claimed their rewards, causing an unseen spike in Ethereum’s gas fees, with $650,000 spent on Uniswap alone. At present, the total UNI token transfers exceed 150,000, as seen on Etherscan.

Here is a detailed allocation information for UNI:

• 4.92% pro-rata to all 49,192 historical LPs – 49,166,400 UNI
• 10.06% split evenly across all 251,534 historical user addresses – 100,613,600 UNI
• 0.02% to 220 SOCKS holders/redeemers – 220,000 UNI

In order to ensure continued participation and contribution to the platform, Uniswap stated that a perpetual inflation rate of 2% per year will start after 4 years. The governance treasury of Uniswap said that it will retain 43% of the UNI supply and gradually distribute it through contributor grants, community initiatives, and liquidity mining, as well as other programs. The first year, 40% of these funds will be released (or a total of 172,000,000 UNI), the second – 30% (129,000,000 UNI), the third – 20% (86,000,000 UNI), and the fourth – 10% (43,000,000 UNI). Team, investor, and advisor assets are said to be locked up on an identical schedule.

Moreover, a liquidity mining program will supposedly go live on September 18, 2020, at 12:00 am UTC and will run until November 17, 2020, at 12:00 am UTC, targeting the following four Uniswap V2 pools:

• ETH/USDT
• ETH/USDC
• ETH/DAI
• ETH/WBTC

“After 30 days, governance will reach its vesting cliff and Uniswap governance will control all UNI vested to the Uniswap treasury. At this point, governance can vote to allocate UNI towards grants, strategic partnerships, governance initiatives, additional liquidity mining pools, and other programs.”

The launch of the Uniswap token comes just a week after competing fork SushiSwap collected more than $1.4 billion in locked funds from their rival. And while SushiSwap is being cast as the more “decentralized” of the pair, the recently found security flaws within its software and the release of UNI might just tip the scales in favor of the original blockchain.