Coin columns · Ethereum City (Capital)
Uniswap (UNI): The Order-Book-Free Exchange and Its Governance Token
The AMM pioneer that tied protocol fees to UNI burns in 2025
Uniswap is a decentralized exchange (DEX) on Ethereum where people swap coins directly, with no middleman or order book. UNI is its governance token, and since December 2025 protocol fees have been tied to burning UNI.
1. From one developer’s idea to a DAO-run exchange
Hayden Adams first launched Uniswap on Ethereum in November 2018, and it has since been grown by the developer Uniswap Labs, a nonprofit foundation and a DAO of token holders. Instead of matching buyers and sellers, anyone can put a pair of coins into a pool (a pot of funds), and a mathematical formula sets prices. People who supply the pool, called liquidity providers, share the trading fees.
UNI was first handed out to past users in an airdrop (a free distribution) in September 2020, and its total supply is 1 billion. On the Crypto Nation map, UNI stands in Ethereum City (the capital), because Ethereum is where the coin was first issued.
2. A market priced by one formula
Uniswap’s core is an automated market maker (AMM). Prices move so that the product of the two coin amounts in a pool stays constant, so buying one coin raises its price and restores balance. Version 3 in 2021 added ‘concentrated liquidity’, letting providers place funds only in the price range they choose.
Version 4, released in January 2025, lets each pool attach custom ‘hooks’, so developers can add features such as fee adjustment or new order types. In February 2025 Unichain, a layer-2 network built by Uniswap, also opened.
3. Where it is used, and what happened
UNI is used to vote on Uniswap’s rules and spending. For years it carried votes but no share of trading fees, which was the heart of the ‘fee switch’ debate. On 25 December 2025 the ‘UNIfication’ proposal passed overwhelmingly, and on 28 December 100 million UNI were burned from the treasury.
At the same time protocol fees were switched on for Ethereum’s v2 and some v3 pools, Uniswap Labs’ app fee was set to zero, and Unichain’s earnings were directed to UNI burns. Whoever claims the collected fees must burn UNI of equal value. In July 2026 a proposal to extend fees to v4 pools and to Robinhood Chain went to a governance vote.
4. Things to know
The fee switch can mean smaller earnings for liquidity providers, and there is concern that some may move to other exchanges. Providers also face ‘impermanent loss’, when price moves leave them worse off than simply holding. Anyone can list a token, so scam tokens are common, and MEV (maximal extractable value), profit from reordering trades, can work against traders.
Voting power tends to gather with large holders and delegates, and regulation is a variable. The US SEC sent Uniswap Labs a Wells notice (a warning of possible action) in 2024 and closed its investigation in 2025, but views on decentralized exchanges keep shifting.
Written from information public up to October 2026. It does not recommend or rate any coin and is not investment advice. If something is wrong, please tell us through the contact page.