Leading decentralized exchange (DEX) Uniswap reported $52.75 million in fee revenue between April 1 and Sept. 30, 2024, according to DefiLlama data. This significant increase follows Uniswap Labs' decision in April to raise its user-interface swap fee, a move that significantly boosted earnings.
In April, Uniswap Labs increased its user-interface swap fee to 0.25% on all trading pairs except stablecoin pairs and Wrapped Ethereum (WETH), up from the previous 0.1% fee that was applied to only ten different tokens.
This fee is charged to users who swap directly through the Uniswap website; traders using aggregators are exempt. The fee is in addition to the regular trading fees on Uniswap, which range from 0.01% to 1%.
The fee increase hasn't been without its critics, though.
Gabriel Shapiro, general counsel for Delphi Labs, a Web3 research and development platform, has in the past been especially vocal in speaking out against Uniswap raising its fees. One of his biggest criticisms has been that turning on fees for the protocol would not benefit UNI, the exchange's native token, and therefore put shareholders and tokenholders at odds with one another.
they don't want to drive value to UNI; it's a regulatory liability and they have a plan to monetize their equity
they own a much bigger % of their company equity than of the token
— _gabrielShapir0 (@lex_node) October 13, 2022
Since the fee adjustment, monthly fee revenue has grown substantially. Fees in March amounted to $4 million, which rose to $9.54 million in April following the fee change and reached a record $11.53 million in May. In September, fees amounted to $7.31 million amid a slump in market liveliness—fees from the last 24 hours amount to $666,662.
Uniswap remains the leading decentralized exchange by volume over the past seven days, posting a total volume of $8.1 billion. The runner-up is PancakeSwap with its $5.9 billion seven-day volume, showing that the fee hike did not endanger Uniswap’s DEX market dominance.
Also in April, Uniswap Labs received a Wells Notice from the U.S. Securities and Exchange Commission (SEC), often an indication that the SEC may initiate legal action. The company responded by stating it is "ready to fight" the case. The increased fee revenue could fuel the company’s legal expenses associated with regulatory scrutiny.
In July, Uniswap urged the SEC to abandon its proposal to regulate the decentralized finance (DeFi) space. In a letter sent to the regulator, the DEX’s lawyers wrote that "for better or worse—the Commission will not be able to claim the benefit of Chevron deference to defend its aggressive and atextual interpretation of its statutory authority."
Edited by Stacy Elliott.
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