Which DEX activated protocol fees?

TLDR

Uniswap (UNI) is the DEX that activated protocol fees following its UNIfication governance vote, with fees now used to buy back and burn UNI tokens per an approved proposal (CoinDesk report).

1. Protocol fees went live on Uniswap v2 and selected v3 pools on Ethereum, tied to a UNI burn mechanism (AMB Crypto governance summary).
2. A one-time burn of 100 million UNI from the treasury was executed after approval (Cointelegraph coverage).
3. Early estimates suggest fee-driven burns are modest so far, and LP economics may tighten (The Defiant analysis).

Deep Dive

1. Protocol Fees On

Uniswaps maker/">DAO approved UNIfication, turning on protocol fees and enshrining a buyback-and-burn path that links usage to token supply reduction. This marks a shift from all trading fees going to liquidity providers toward protocol-level value capture (CoinDesk report). Governance coverage highlights broad support and the operational scope on v2 and portions of v3 on Ethereum (AMB Crypto governance summary).

2. 100M UNI Burn

The approved changes included a retroactive, one-time burn of 100 million UNI from the treasury, executed after the timelock. Reports show the burn was completed and framed as a significant step in reducing circulating supply alongside ongoing fee-driven burns (Cointelegraph coverage).

3. Early Impact and Trade-Offs

Early commentary suggests fee-driven burns are currently generating modest daily revenues, implying that meaningful supply reduction could take time at present volumes. Analysts also note potential pressure on LP profitability in some v3 pools, which could affect liquidity if not balanced by incentives and improved economics (The Defiant analysis).

Risk note: If LP returns compress and liquidity migrates or thins, spreads and slippage can widen during volatile periods, reducing user experience.

Conclusion

Uniswap activated protocol fees and tied them to a UNI buyback-and-burn mechanism. This is a structural shift toward protocol value capture. The long-term benefit depends on sustained volumes and careful balance between fee revenue, LP incentives, and liquidity depth.