1. Uniswap trading volumes hit $116.6B, surpassing May 2021 levels, while UNI valuation dropped to $6.8B.  
2. The proposed fee switch could centralize power, moving Uniswap from a DAO model to a corporate-like structure.  
3. Analysts see UNI as an institutional-grade altcoin with potential price targets of $24–$34.  

Uniswap’s decentralized exchange has seen a remarkable surge in activity, processing $116.6 billion in monthly trading volume, more than triple the $38.9 billion it handled in May 2021. Surprisingly, this spike in trading does not reflect in UNI’s market valuation, which currently sits at $6.8 billion, down sharply from $21.7 billion in 2021.

The contrast highlights a growing disconnect between network usage and token market value. Traders and investors are paying close attention as the protocol continues to expand its presence across multiple chains.  

The platform has consistently released major updates, including v3 and v4 upgrades, UniswapX, the Uniswap Wallet, and the cross-chain @unichain integration. These upgrades broaden the protocol’s features and accessibility, signaling that Uniswap is evolving into a multi-faceted financial platform rather than remaining solely a trading venue.  

Uniswap’s Fee Switch Proposal Sparks Governance Debate

A new “UNIfication” fee switch has been proposed by Uniswap, and it’s gaining quite some attention. If it happens, it will allow UNI token holders to benefit from it directly by purchasing tokens using fees from trades.

Supporters argue it correlates trading volumes to token demand in a transparent and rules-based manner. Detractors say it would make UNI less of a token of a DAO and more akin to business value.

DeFi expert Ignas described it as a consolidation of power since all Uniswap Foundation’s activities would be controlled by Uniswap Labs. A small team would be responsible for grants, and eventually, the Uniswap Foundation would be wound down.

This development aligns with a trend in the crypto space in which other DAOs like Scroll, Arbitrum, and Optimism introduce centralized control to do things better and more efficiently rather than as community-hosted blockchains.

UNI Seen as Institutional-Grade Altcoin With Strong Growth Potential  

Despite these governance issues arising in UNI, analysts foresee great things for it in the long run. According to Stephen, who is also a market strategist in the crypto market, UNI would be the first altcoin to come from traditional finance.

In past market responses to announcements of fee switch changes, he shows that UNI may significantly reprice and suggests base case targets of $17-$19.

Now looking forward to the near-term forecast, Stephen predicts UNI to trade between $24-$34 once new money is injected by institutional players entering the altcoin market. In fact, it may even reach its all-time highs.

In these circumstances of increasing adoption, upgrades to the protocol, and even value creation systems in a corporate fashion, UNI provides quite a limited opportunity to hold it in portfolios for several years. At present, it trades for $6.23, increasing by 2.3% in the last 24 hours.

Also Read: Uniswap (UNI) Price Analysis: Key Level Near $6.60 Suggest Rally to $13.75