Uniswap's governance token spikes to 2-year high amidst proposal for protocol rewards. Snapshot vote shows strong support. Potential regulatory concerns arise.
Uniswap’s governance token reached its highest point in two years on March 6th as the overall altcoin market cap surpassed $310 billion for the first time since April 2022.
UNI experienced a notable surge of 20% within 24 hours, reaching a trading price of over $15.60, following the approval of a proposal to introduce protocol rewards for token holders, which passed a preliminary assessment ahead of an upcoming on-chain vote scheduled for March 8th.
The last time UNI was traded at this price level dates back to the early months of the second quarter of 2022, just before the digital asset market underwent a significant downturn triggered by Terraform’s collapse and a series of cryptocurrency bankruptcies.
In decentralized protocols, temperature checks are utilized to gauge the community’s sentiment towards proposed changes or ideas. The recent Snapshot vote on Uniswap’s DAO forum revealed overwhelming support for the distribution of token rewards to UNI holders.
If approved following the main on-chain vote, proponents estimate that UNI holders who delegate and stake their tokens could collectively receive a portion of Uniswap’s annual protocol earnings, potentially ranging from $62 million to $156 million.
If the UNI community embraces this proposal, it could pave the way for other DeFi giants like Frax Finance to adopt similar revenue-sharing initiatives. However, analysts from 21Shares caution that such programs might attract regulatory scrutiny, as cryptocurrencies could potentially fall under the security requirements outlined by the Howey test.
According to LookOnChain, a significant UNI holder offloaded 41,000 tokens as the cryptocurrency surged to a 26-month high. Speculation suggests that the wallet owner could be associated with the Uniswap team, an investor, or an advisor.
The seller realized a profit of $608,000 from the recent sale and still retains a substantial holding of over 358,326 tokens, as per data from Etherscan.