Uniswap has increased trading fees on its decentralized exchange by about 67%. The move follows potential regulatory actions by the US Securities and Exchange Commission (SEC) against the DeFi protocol.
Information on the official website shows that users will have to pay a fee of 0.25% for most swap transactions, up from the previous 0.15%.
Uniswap raises fees in preparation for legal battle
Uniswap clarified that this fee adjustment is aimed at ensuring sustainable funding for its operations. Although fee-eligible transactions have increased, certain transactions, such as swapping stablecoin pairs with the underlying asset or wrapping and un-wrapping WETH, remain free.
Users can avoid fees by using an alternative interface to access Uniswap. However, any transactions performed on mainnet and supported Layer-2 networks will incur increased fees.
Interestingly, the fee revision coincided with Uniswap receiving the Wells notice, a precursor to enforcement action from the SEC. Therefore, market observers believe that Uniswap 's transaction fee increase is a strategic move to bolster the company's financial reserves against potential legal proceedings from the financial watchdog.
Dan Smith, a researcher with cryptocurrency platform Blockwork Research said :
The Interface Fee goes to Uniswap Labs to fund the work of building products around the protocol… Or in this case, litigate the SEC on behalf of the entire industry. If you don't want to pay then just use an aggregator. The average user is better served with an aggregator anyway (hint, these tools often have their fees too).
SEC litigation against cryptocurrency entities tends to be lengthy and financially burdensome. For example, Ripple has spent more than $200 million in its ongoing lawsuit against the SEC.
Despite the potentially huge financial outlay, Uniswap has stated its commitment to opposing the lawsuit. The company sees its effort as an important step in championing the principles of DeFi.
