Key takeaways
- Uniswap’s UNI is the best performer among the top 30 cryptos by market cap, up 20% in 24 hours.
- The rally comes after Uniswap Labs and the Uniswap Foundation submitted a “UNIfication” governance proposal on Monday.
UNI pump on UNIfication proposal
UNI, the native coin of the Uniswap decentralized exchange, is the best performer among the top 30 cryptocurrencies by market cap. The coin is currently up by 20% in the last 24 hours and is now trading above $8.5 per coin.
It had hit a monthly high of $10.2 on Monday but is currently retracing. The rally comes after Uniswap Labs and the Uniswap Foundation submitted a “UNIfication” governance proposal on Monday.
The proposal, co-authored by protocol founder Hayden Adams, Executive Director of the Uniswap Foundation Devin Walsh, and Uniswap researcher Kenneth Ng, will reduce the supply of Uniswap’s native UNI token in part by activating a burn mechanism.
If approved, this will mark a significant shift for Uniswap and its token holders as they have been calling for the so-called “fee switch” that would divert a portion of the trading fees that historically accrued to liquidity providers to the Uniswap protocol’s treasury or UNI token holders.
The proposal will use protocol fees earned by the Uniswap DEX and Unichain sequencer to burn tokens, while also directly burning 100 million UNI tokens currently sitting in Uniswap’s treasury.
Furthermore, the proposal would halt Uniswap Labs from earning fees on its interface, wallet, and API. However, it remains unclear the percentage of the fees will go towards token burns.
UNI could retrace to $7.2 as the bullish surge subsides
The UNI/USD 4-hour chart is bullish but inefficient as the coin pumped on the UNIfication news on Monday. The coin is now retracing and could gain efficiency in the near term.
The technical indicators remain bullish, with the RSI of 73 showing that UNI could soon enter the overbought region. The MACD lines are also within the positive territory, indicating a bullish bias.
If the retracement continues, UNI could drop to the $7.2 level to gain efficiency in the near term. An extended dip would see the bulls forced to defend the support level at $6.6.
However, if the bullish trend resumes, UNI could reclaim the $10.2 high created on Monday over the next few hours or days.
