Uniswap’s UNI Token Surges 46%, What’s Behind the Rally?

    Uniswap’s governance token, UNI, has experienced a remarkable rally, soaring by 46% to trade above $17, marking levels last seen in January 2022.

    Uniswap pumps

    The surge in UNI’s price is accompanied by a staggering 120% leap in trading volume over the last 24 hours, reaching $1.18 billion. As a result, its market capitalization has surged by 44% over the past week, now standing at $9.4 billion, positioning it as the 16th largest cryptocurrency by market capitalization.

    This surge follows a proposal by the Uniswap Foundation to upgrade the protocol’s governance for fee redistribution, to enhance community involvement. The proposal specifically focuses on distributing protocol fees to UNI token holders who have staked and delegated their tokens.

    The proposal involves enhancing the mainnet UniswapV3Factory contract owner to enable permissionless and programmatic collection of protocol fee revenue.

    The Uniswap community has embraced this move, recognizing its significance in enhancing the governance structure of the Uniswap protocol, thereby empowering UNI token holders to play a more active role in decision-making processes.

    Voting Is On

    Snapshot voting for the proposal commenced on March 1 and will continue until March 7, with significant support from the community evident. As of the latest update, the proposal has garnered 100% agreement from 55 million UNI.

    In addition to the governance upgrade, data from Lookonchain indicates substantial accumulation of UNI tokens by whales, with one whale accumulating tokens worth over $12.5 million in the last 48 hours. Moreover, Uniswap’s network activity has surged, with daily users increasing from around 75,000 in October 2023 to 168,106 on March 2, as per Token Terminal data.

    This growing adoption of the Uniswap ecosystem has driven up demand for UNI tokens, propelling its price to reach 26-month highs. The RSI indicates upward momentum, with buyers dominating the market. However, caution is advised as the RSI also signals overbought conditions, suggesting a potential trend reversal that could halt UNI’s bullish rally. As the market dynamics unfold, traders will closely monitor UNI’s price action to gauge its future trajectory.

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