"Fee Switch" Pilot Update & Vote

Hi Uniswap community. I’d like to share my thoughts on this proposal as I think it is a very important moment for Uniswap. I come here as someone who wants to see DeFi succeed and sees Uniswap as integral to this. The research by Alastor and the Uniswap Foundation has been excellent and should be used to continue to drive discussions on the fee switch, but I think now is the wrong time to execute this proposal.

First, I feel for the Uniswap community who may be hurting due to price action of the UNI token. The crypto markets are down and the Uni token is as well. It is natural to want to pursue changes when things seem like they are not going well. In this situation, however, I think that inaction is the best action.

There are two core reasons why I think this is not a good idea. First, I think a fee switch would be counterproductive to the objectives identified by Alastor. I fully agree that TVL, market share, and trading volume growth should be the Uniswap Protocol’s top priorities in this phase of its lifetime. While we may identify that the fee switch does not or has minimal negative impact on these metrics for certain pools, taxing LPs certainly cannot help here. I see only downside across the core KPIs.

The other reason is that this proposal could have very serious and unpredictable negative externalities for the Uniswap community. The Uniswap Foundation’s brief discusses the severe lack of clarity for DeFi in the U.S. It is very possible that this proposal could negatively impact community members like Uniswap Labs, the Uniswap Foundation, and even individuals in the community. I don’t think the proposed exploration is justifiable amidst these uncertainties.

The community treasury is large and there is no lack of funding for growth initiatives. There is no need to risk stifling growth or any other consequences right now.

Today UNI is the single most valuable DeFi governance token by market capitalization. This isn’t because of the prospect of immediate cash flows. It is because the token marks ownership in a decentralized community for the single most revolutionary and useful protocol in all of DeFi. The Uniswap vision is far bigger than a fee switch. It should not be jeopardized or hindered at this point in the protocol’s lifetime for the exploration of unnecessary fees.

I do not hold any UNI nor do I have any exposure to UNI. This is not financial or legal advice. I am only providing my thoughts on this unprecedented initiative and will support the Uniswap community in its decision.