Why did UNI surge? Uniswap’s average daily handling fee is US$2 million, and the future staking return rate is estimated to be 5%

This site (120bTC.coM): The Uniswap Foundation issued an announcement on its official website last night, releasing the latest governance proposal "Activating Uniswap Protocol Governance", which plans to allocate protocol fees to UNI token pledgers. Accept this information Incentive, CoinGecko data shows that the Uniswap governance token UNI quickly surged 53% within an hour after the news was released, once exceeding $12, soaring 62.8% in the past 24 hours, and was still fluctuating at a high level around $12 at the time of writing.

Snapshot voting for this proposal is scheduled to be released on March 1, 2024, and on-chain voting will begin on March 8, 2024.

Uniswap’s average daily handling fee is 2.05 million US dollars

As for why this governance proposal can greatly stimulate the price of UNI currency, on the one hand, it is because UNI is criticized for having no benefits for holders. The proposed allocation of protocol fees in this governance proposal will undoubtedly increase the empowerment of UNI, and it is a very large empowerment, because the number of handling fees generated by Uniswap is second only to Ethereum and higher than Bitcoin, ranking third among all crypto projects. Two.

According to data from Crypto Fees, Uniswap generated approximately $2.143 million in handling fees in the past 24 hours, while the average daily handling fee over the past seven days was $2.052 million.

The annual return rate is estimated to be nearly 5%

Not all Uniswap fees will be charged by the agreement, and currently the fees are still fully allocated to liquidity providers . There have been discussions before about enabling the "fee switch", that is, Uniswap will only charge protocol fees when it is turned on, but until now this switch has not been enabled.

Researcher Henson estimated the return rate of staking UNI now. He assumed that the protocol fee accounts for 20% of the handling fee, which means that the annual protocol fee is US$173 million. He further assumed that half of the circulating UNI would be pledged, resulting in a pledge size of $3.5 billion. Based on these assumptions, the annual return in this scenario is calculated to be 4.94% (1.73/35).

Henson finally said that if the transaction volume doubles or even more with the bull market and the popularity of Web3, the annual return on investment will be more than 10%.

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