UNI's switch moment: Can governance victory translate into a price rally?

The Uniswap protocol has recently undergone a major governance turning point. On December 26, 2025, the UNIfication proposal was approved by an overwhelming majority—approximately 125 million UNI votes in favor, with only 742 against. This level of consensus reflects a strong cohesion within the ecosystem. More importantly, the proposal activated protocol fee mechanisms for Uniswap v2 and v3 on the Ethereum mainnet, while also introducing fee capture related to Unichain. However, the market still seems to be on the sidelines: can this governance victory translate into upward momentum for the UNI price?

Redefining Token Economics

The proposal not only advances governance maturity but also makes structural changes to token economic design. Uniswap Labs plans to burn 100 million UNI after a two-year temporary freeze, which will directly reduce circulating supply. A deeper impact is that protocol fees will now continuously fund a deflationary mechanism, shifting the UNI token model from simple supply growth to value capture.

Nevertheless, traders remain cautious. Many are waiting for concrete revenue data to demonstrate how these changes will ultimately benefit token holders. Currently, UNI is priced at $5.40, significantly below its all-time high of $44.92, with a 24-hour decline of -1.83%.

Dominance in the DEX Space Remains

Despite price fluctuations, Uniswap’s dominant position among decentralized exchanges remains unshaken. Data shows that Uniswap’s monthly trading volume reached $6.07 billion, far surpassing competitors like PancakeSwap and Curve. This liquidity advantage provides a solid foundation for the protocol’s long-term competitiveness.

Technical Signals Reveal Underlying Concerns

UNI recently peaked near $19 before falling into a long-term distribution pattern. From the lows of June 2023 to now, UNI has formed a multi-year “head and shoulders” technical pattern. Historically, breaking above $8.4 often triggered strong rallies, but recent failed attempts suggest momentum is waning.

The RSI indicator currently hovers near neutral territory and has weakened rapidly during previous declines. The MACD momentum also appears weak, lacking sustained bullish confidence. These signals point to difficulties in the short term for upward movement.

Liquidity Map Indicates Downside Risks

On-chain data shows a dense liquidation cluster forming around $5.1. Such zones often act as price magnets during panic periods. Once the price breaks downward into this area, in a broader market that remains fragile, it could trigger further deep corrections, potentially reaching support around $4.5.

Conclusion

The UNIfication proposal and the activation of protocol fees indeed strengthen Uniswap’s long-term fundamentals. Governance reforms, token burn plans, and value capture mechanisms mark the protocol’s move toward a more mature economic model. However, market reactions to these positive changes remain cautious, with price signals and technical structures suggesting that short-term risks outweigh opportunities. In the near term, whether UNI can break through the key resistance at $8.4 will be crucial—failure to do so makes the $4.5 downside target increasingly plausible.