- Uniswap introduces “UNIfication,” a joint governance proposal to activate the protocol for free, add a UNI burning mechanism, and cut the token supply
- The Uniswap token price challenges the key resistance trendline of the descending triangle pattern, signalling a potential breakout.
- The UNI price reclaims key exponential moving averages (20, 50, 100, and 200) , restoring the bullish sentiment in the market.
UNI, the native cryptocurrency of the decentralized cryptocurrency exchange Uniswap, soared over 38% on Monday, November 10th, to reach a trading value of 8.835. The sudden buying pressure can be linked to the recent introduction of UNIfication, a joint governance proposal to activate protocol fees, reduce the total UNI supply, and introduce a usage-based UNI burn mechanism. Will the news-driven rally sustain?
Uniswap Introduces UNIfication Proposal Linking Protocol Usage to UNI Token Burn
On Monday, Uniswap announced a major governance proposal, “UNIfication,” which is a joint effort by Uniswap Labs and the Uniswap Foundation to turn on protocol fees, align major protocol contributors, and introduce a token burn feature.
The proposed upgrade represents a radical change in the governance and economic model of Uniswap. It aims to connect protocol usage directly to the dynamics of UNI tokens via a usage-based burn system, and at the same time reduce the total number of UNI tokens. The plan also calls for the activation of certain protocol-level fee mechanisms and aligning the Uniswap Labs interface and developer API to better support protocol growth.
The press release also highlights the establishment of the Uniswap Growth Budget, which would be used for funding protocol and ecosystem development and community initiatives via a Service Provider Agreement. This mechanism would replace much of the current system of grant-based funding managed by the Uniswap Foundation.
Under the new structure, most of the Foundation’s team and active programs will move to Uniswap Labs, essentially combining the operations of the two entities. A reduced number of the Foundation’s activities will be maintained temporarily for administering existing grants until it is completely closed. Approximately $100 million of remaining grants will be put into place before winding down operations.
The governance proposal comes at a time of increased regulatory clarity within the United States and is the result of the community’s adoption of the DUNI governance model, which has made coordination and oversight on-chain more straightforward.
If the proposal is approved, it will create a coherent system in which network activity funds continue development of the protocol, while Uniswap Labs takes central responsibility for development, governance coordination, and ecosystem operations—the beginning of a new chapter in the Uniswap protocol.
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UNI Price Teases Upside Breakout from Bearish Triangle Pattern
Today, the Uniswap token price showed a sharp leap from $6.5 to $9.65, registering a 47.63% growth. The news-driven rally has pushed the token price against a long-coming resistance trendline of a descending triangle pattern.
The chart setup, characterized by a downsloping trendline and horizontal support, is known to build bearish momentum before a major breakdown gradually. However, today’s spike, the buying force, is challenging the resistance trendline for a bullish breakout.
If materialized with a daily candle close, the buyers could strengthen their grip over this asset to drive further recovery. The post-breakout rally could push the price another 27% and challenge the next significant resistance at $12.3.
On the contrary, if the sellers continued to defend the downsloping trendline, the token price could trigger another bear cycle within the triangle. However, the potential drop could halt at the 200-day EMA to stabilize the dynamic shift in price after the UNIfication news and drive its next move.
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