Unichain’s mainnet launch will ensure Uniswap Labs and UNI holders indulging in staking will collect tremendous amounts of trading and settlement fees.
Uniswap Labs, the developer behind the biggest decentralized exchange (DEX), launched the Unichain testnet on October 10. The DeFi Report’s co-founder, Michael Nadeau, says that with the mainnet launch, Unichain could attract close to $500 million to the developer, and UNI token holders if Uniswap Labs chooses to share the revenues.
Unichain will act as the home for Uniswap going forward, attracting users from all the blockchains the DEX was deployed on to a single network. With that, the transaction fees collected for executing trades on the DEX will directly accumulate in the hands of Uniswap Labs. The company made no money from trades earlier, as validators on the chains the dApp was deployed on collected the fees.
For instance, Uniswap-related fees netted Ethereum validators about $368 million last year. Now, those fees will flow into Uniswap Labs’ pockets. Furthermore, about 10% of all the fees paid on Uniswap was accumulated by validators as maximum extractable value (MEV). With Unichain, those funds, too, can make their way to Uniswap Labs. Validators made $100 million by capturing MEV over the last year.
UNI liquidity providers (LPs) will not be left without benefits either. They will continue to make 100% of trading fees from pools, with the possibility of earning via settlements and MEV when Unichain goes live. While Uniswap Labs will directly benefit from settlements and MEV, the funds will trickle down to LPs that indulge in staking. UNI token holders will also gain profits in the same way.
“At the end of the day, Uniswap is simply integrating within the tech stack so that they can control more of the value they are creating through their interface and smart contracts,” said Nadeau.
Ethereum and Other Chains Will Lose Out
However, according to Nadeau, Ethereum and ETH holders look to lose out as Uniswap moves to its dedicated chain. The second-largest blockchain network, which the protocol saw the most usage on, will now witness no fees flowing in from it. And that could also cause ETH burning to reduce, as a portion of fees are burnt to keep the asset deflationary.
Uniswap has generated $1.3 billion for the chains it is deployed on, including Ethereum, Base, Optimism, BNB Chain, and Polygon. Unichain’s launch, taking Uniswap away from existing networks, comes to offer faster and cheaper transactions for the DEX’s users. All its nodes will be controlled by Uniswap Labs, channeling all trading and settlement fees to the firm.
