Uniswap Labs’ fee switch yields $120K in opening days
This past week, Uniswap Labs’ development team instituted a select fee for their decentralized exchange, Uniswap. The initial results appear to be extremely lucrative, with the team earning $120,000 over 48 hours.
Uniswap founder Hayden Adams announced the fees Monday in an X post. The fees applied only to 11 assets, only when two of those assets were traded in a paired pool, and only if the user was trading on the Uniswap mobile app or on the uniswap.org-linked frontend.
I work in crypto because of the immense positive impact I believe it can have on the world, removing gatekeepers and increasing access to value and ownership.
I’m proud of the ways @Uniswap Labs has contributed to that effort and want to make sure we’re creating sustainable…
— hayden.eth 🦄 (@haydenzadams) October 16, 2023
A flash report from Blockworks Research estimated that, despite the relatively constrained parameters, the fee had the potential to rake in upwards of $33 million per year, based on year-to-date volume.
Read more: Uniswap Labs to institute 0.15% fee on select assets and frontends
Just a few days into the fee being live, that estimate initially appears to be on the higher end, but it’s nonetheless good business for Uniswap Labs.
Since roughly 1 pm ET on Tuesday, Oct. 17 when the fees went live, they have generated over $133,000 for Uniswap Labs, averaging roughly $60,000 per day — an annualized sum of over $22 million.
Source: Blockworks Research
The majority of the funds have originated from base layer Ethereum, particularly during a high-volatility period on Wednesday when ether (ETH) topped 90% of fee volume during a three-hour span.
A Uniswap Labs spokesperson declined to comment.
Uniswap is by far the largest and most structurally important decentralized exchange. It boasts $3 billion in total value locked (TVL) and $625 million in trading volume in the past 24 hours. The exchange has processed $1.73 trillion in aggregate lifetime trading volume.
In Adams’ X post, the founder cited company growth as a motivation for instituting the fee. Uniswap Labs raised $165 million in October 2022.