Uniswap Foundation Delays Protocol Upgrade Amid Legal Challenges
By: Eliza Bennet
The Uniswap Foundation has postponed a highly anticipated upgrade proposal that aimed to enhance its governance and fee distribution model. The decision came after a new issue raised by a stakeholder required further due diligence, underscoring the sensitivity of the proposed upgrade. This delay has significantly impacted the price of Uniswap's native token, UNI, which has dropped by over 8% in the last 24 hours.
The postponed proposal was designed to streamline Uniswap's fee mechanisms, rewarding UNI token holders who have staked and delegated their tokens. It also aimed to improve the efficiency of fee adjustments and reduce the governance burden on delegates. The Foundation apologized for the unexpected delay and promised to keep the community updated on any material changes.
The delay has had adverse effects on UNI's market performance. The token has slid to a key support level at $10.20, registering an 8.6% decline. Analysts suggest that if UNI does not regain bullish momentum and stabilize above the $10 support level, it could retrace further to $9.66 and potentially as low as $9.33. For more market data on Uniswap, refer to DeFiLlama.
Adding to its woes, Uniswap is entangled in a legal battle with the U.S. Securities and Exchange Commission (SEC). The regulatory body has issued a Wells Notice to Uniswap Labs, indicating its intention to recommend enforcement action. Uniswap Labs is contesting the SEC's stance, arguing that the case is flawed and fails to distinguish between tokens as stores of value and securities. The company has expressed confidence in its legal team, highlighting past successes in high-profile SEC cases involving Ripple and Grayscale.
Despite these challenges, Uniswap continues to show substantial growth, with a total value locked (TVL) of $6.1 billion and a market capitalization of $7.7 billion, according to DeFiLlama. CoinGecko data also indicates that UNI's trading volume has surged by 21.5% in the past 24 hours, reaching $264 million.
The Uniswap community keenly waits for updates on both the governance proposal and the ongoing SEC lawsuit. The platform's future prospects depend heavily on its ability to navigate these hurdles and maintain its strong market position.
