The Uniswap Labs team has proposed implementing a protocol fee for liquidity providers (LPs) across 11 networks, but has made an exception for the Base network, setting a significantly lower rate there. In my analysis, this decision is not merely a gesture of goodwill, but a clear signal of growing competitive pressure.
The current Uniswap v4 model allows LPs to keep 100% of swap fees. The new proposal fundamentally changes the rules: a portion of the revenue will be directed to the protocol treasury, converted, and burned. The fee amount varies depending on the pool type. According to my estimates, on most Uniswap pools, the protocol will take about $17–25 from every $100 in fees, and on pools with the lowest fees, up to $33. The remainder stays with liquidity providers.
I emphasize that it is the LPs who bear the primary risks, including impermanent loss and asset depreciation risk. Calling them the "overpaying party" would be incorrect. However, the key point is the uniform "tax" rate across all networks, except for Base, where it is 70% lower. Stable pairs on Base pay only a third of what they would on other blockchains.
Why is Base an exception?
The reason for this selectivity, in my view, lies in fierce competition. Base is the "home turf" of the Aerodrome protocol, and it is the only place where LPs have a real alternative. Uniswap is acting like a supermarket that offers discounts only where a strong competitor has opened across the street. The problem is compounded by the fact that Aerodrome is launching on the Ethereum mainnet this month, meaning the challenge for which the discount was made will follow the protocol to other networks as well.
Alexander, founder of Dromos Labs and a contributor to Aerodrome, noted that Uniswap officially proposes to reduce the LP share of v4 fees to 33%. He pointed out that the protocol is willing to take less precisely on the network where Aerodrome dominates, and suggested that Uniswap will soon face the same reality on other blockchains. According to the proposal, for "aggregator" hooks, the default fee will be 10 basis points on all networks except Base, and 3 basis points for certain stable pairs. For Base, the rates are noticeably lower: 3 and 1 basis points respectively.
The Snapshot vote will take place from July 7 to 12, with the on-chain vote occurring the following week. Notably, last month, UNI burning reached 186,000 tokens per day even before the v4 protocol fees were introduced. This indicates that the team is seeking ways to increase the token's value, but the price may be an outflow of liquidity.
My opinion: Uniswap has found itself in a trap of its own success. The fee reduction on Base is a forced measure that only delays the inevitable. If Aerodrome successfully scales to Ethereum and other networks, Uniswap will have to reconsider its fee policy globally. Otherwise, it risks losing a significant market share, and UNI holders may face a dilution of the token's value, despite the burning mechanisms.