Uniswap redirects creator fees on test tokens to buyback and burn program

Uniswap Labs is giving up creator fees on test tokens, redirecting 100% of that revenue into the protocol’s existing UNI buyback-and-burn program. The change means that every fee generated by test tokens on Uniswap’s newer launch environments now flows directly into smart contracts designed to buy UNI on the open market and permanently destroy it.

The UNIfication backstory

This latest fee redirection is part of a larger structural overhaul known as UNIfication, a governance framework approved by the Uniswap DAO in November 2025. The proposal activated the protocol fee switch, establishing vault and burn contracts to ensure that protocol-level fees contribute directly to UNI token burns rather than flowing to Uniswap Labs or the foundation.

In December 2025, the DAO initiated a treasury burn of 100 million UNI tokens, valued at approximately $600 million at the time. Protocol fees are now live on Ethereum v2 and v3 pools, generating an estimated annualized burn rate of around $26 million from those pools alone.

How TradePools and creator fees fit in

Uniswap has been building out new features including TradePools, which allow token creators to impose optional fees of up to 0.05% of the 0.25% LP fee tier on their pools. For test tokens, these creator fees now exclusively contribute to the UNI burn mechanism rather than going to Uniswap Labs.

This particular change did not require a formal governance vote. Under the UNIfication framework, certain operational decisions around early-stage tokens can be made without going through the full DAO proposal process.

What the burn rate actually means for UNI

UNI’s fully diluted supply is 1 billion tokens. The December treasury burn of 100 million tokens represented a one-time reduction of 10% of total supply. The ongoing annualized burn rate of $26 million from v2 and v3 protocol fees adds a smaller but continuous reduction, with potential increases as Uniswap expands to v4 and additional blockchain ecosystems.

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