Author: Bruce

Foreword

The founder of Uniswap released a new proposal early this morning, which involves resolving the fee switch issue that failed seven times in the past two years. Here, I'll borrow @Michael_Liu93's comments to explain this proposal and the buyback process:

• 100 million coins were burned, accounting for 10% of the total supply, approximately $950 million (to make up for the previous losses).
• One-sixth of the transaction fees are used for buybacks and burning (five-sixths go to LPs). In the past 30 days, the transaction fee income was $230 million, which is $2.76 billion annually. One-sixth is $460 million per year used to buy back and burn UNI tokens in the market. Based on the current market value, the deflation rate is less than 5% of the total token supply per year.
• Calculate the valuation multiple of $UNI: a market capitalization of 9.5 billion corresponds to a P/E ratio of 21x and a P/S ratio of 3.5x.
• In comparison, HyperLiquid has a FDV of 42.1 billion, annual revenue of 1.29 billion, annual share buybacks of 1.15 billion, a P/E ratio of 37x, and a P/S ratio of 33x.
• Compared to Pump, which has a FDV of $4.5 billion, Meme's revenue fluctuates significantly, ranging from $1 to $3 million over the past few months. Assuming $1.5 to $2 million in revenue per day, that translates to an annualized revenue of $550 million to $730 million (100% buyback), corresponding to a P/E ratio and P/S ratio of around 6x to 8x.
• The original article is here: https://x.com/Michael_Liu93/status/1988031857653674417

 PE/PS of US-listed companies

????‍♂️Let's break down the future prospects of @Uniswap.

Will the proposal be approved?

✅ Extremely high success rate (over 80%)

1️⃣ The core palace is dominated by the auspicious star:

The Chief Symbol falls in the Kun Palace, representing the highest decision-making body and the final result. The configuration is the Azure Dragon Returning to Its Head, a highly auspicious configuration, signifying an inevitable trend and the certainty of success. This configuration clearly points to the proposal being ultimately passed.

Both the Day Stem and Hour Stem are blessed with auspicious deities and extraordinary stars, indicating strong internal driving forces within the community and that the proposal itself is of high quality and timely.

2️⃣ Transformation of opposing forces:

While the key opposing party (the investor) still wields power in the game, the configuration of their palace indicates that their stance has softened and shifted. The presence of Tian Rui and Jiu Tian in the same palace suggests that their concerns have shifted from "firm opposition" to "how to mitigate risks during the process," with their energy now focused more on seeking solutions rather than direct obstruction.

⚠️ Key issues that will be encountered during the process

Although success is highly probable, the process will not be smooth sailing. It will primarily face the following three major challenges, corresponding to the three palaces in the Qimen Dunjia divination chart:

1️⃣ Final identification of legal and tax risks (core obstacle)

The chart shows that the Dui Palace is accompanied by Tian Rui, Jing Gate, and Jiu Tian, indicating that the process will require a lot of talking and effort.

In reality: This is precisely the core concern that investment institutions like @a16z have always had. Before and after the vote, legal debates regarding the classification of securities and the tax liability of DAOs will reach their climax. It may be necessary to attach legal opinions or make minor adjustments to the proposal's terms to completely dispel the doubts of large institutions. This is the most time-consuming part of the entire process.

2️⃣ The backlash and reassurance from the LP (Liquidity Provider) community

The overall situation is as follows: Zhen Palace is accompanied by Liuhe, Xiumen, and Tianren.

In reality, some LPs may feel dissatisfied with the distribution of their profits, and may even threaten to migrate their liquidity to competitors. Community governance requires effective communication and explanation of the rationale for compensation mechanisms (such as PFDA) and phased implementation to appease these sentiments and maintain the foundation of the agreement.

3️⃣ Opportunistic attacks and media interference from competitors

The chart shows: The Li Palace is accompanied by Tengshe (螣蛇), Shangmen (伤门), and Tianfu (天辅星).

In reality, competitors will seize on the fact that "UNI sacrifices LPs" to create a big deal, generate negative public opinion on social media, and try to undermine community consensus and divert users and liquidity.

What are the development prospects?

The overall trend can be summarized as follows: short-term volatility due to significant positive stimuli; medium-term upward spiral amidst value reassessment and fierce competition; and long-term development deeply intertwined with the success or failure of unichain and the fate of the entire DeFi industry. Its trajectory is not smooth sailing, but rather a process of gradually realizing its potential as a "DeFi blue-chip leader" after overcoming numerous obstacles.

???? Core Trend Interpretation

1️⃣ Short-term trend (next 3 months): News-driven, consolidation and accumulation of momentum.

Dramatic fluctuations: Bingqi falling in Dui Palace (Jingmen + Jiutian) indicates a sudden surge triggered by news of a proposal. However, after the price spike, a pullback and fluctuations are inevitable.

Key juncture: The 22-day voting period is a crucial observation window. With the Jing Gate in the Dui Palace, $7-$7.5 is the short-term lifeline; if this level can be held, the proposal may see another upward surge after its passage.

Market sentiment and voting progress will dominate prices, with the market trend mainly characterized by wide fluctuations, accumulating energy for the next stage of directional selection.

2️⃣ Medium-term trend (6 months - 2 years): Value reassessment, upward trend

The pattern is clear: Jia Shen Geng falls in the Kun Palace, with the Chief Symbol and Tian Ying present. This pattern indicates that once the proposal is approved, it will attract the attention of mainstream funds and start a new round of value discovery.

6 Months: Target price $15 - $25, corresponding to a market capitalization of $150 - $250 billion, achieving the baseline scenario.

1-2 years: If contractual revenue can be effectively captured and deflation stabilized, it is expected to challenge the historical high of $44.5 and move towards the $50-$75 range. In 2026 (Bingwu year), the Li Palace will be filled, and policy and ecological benefits may resonate together.

3️⃣ Long-term trend (3-10 years): Ecosystem is king, the destiny is clear.

Success Path: If @Unichain can successfully build its ecosystem, combining protocol revenue with on-chain value capture, $UNI will no longer be just a trading protocol token, but will be upgraded to a core asset of Web3 financial infrastructure. The astrological configuration of "Chief Symbol Guarding Kun, Azure Dragon Returning to its Head" also supports its long-term leading position, with a price target of $100-$200.

Mediocre Path: If it fails to break through in the competition and can only maintain its existing market share, then $UNI will become a high-quality "DeFi bond" whose value is supported by stable buybacks and burns, and the price may fluctuate in the range of $30-$60.

Competitive Landscape: Moats and Breakthrough Points

Moat: The Kun Palace, where @Uniswap is located, represents its strongest brand, liquidity, and user habits, which is a gap that other competitors will find difficult to cross in the short term.

Breakthrough point: The competitor is DuiGong, Tianrui + Jiutian, whose high token incentive model (ve(3,3)) is aggressive but unsustainable. @Uniswap's key to breaking through lies in using V4 Hook, @Unichain and other technological iterations to create new sources of value without seriously harming LP returns, thus achieving "having your cake and eating it too".

Key Risk Warnings

Governance Risks: The biggest uncertainty remains the vote. Despite a high probability of passage, obstacles from major players like @a16z could pose last-minute legal concerns.

Competition Risk: The combination of Zhen Gong Liu He and Xiu Men suggests that other protocols may unite to seize liquidity. If the fee switch leads to a significant loss of LPs, it will shake the very foundation of the system.

Macroeconomic and regulatory risks: The combination of the "Kan Palace Black Tortoise" and "Jing Gate" formations suggests a need to be wary of black swan events in global regulatory policies after 2026, as well as systemic risks associated with the cryptocurrency market's own bull-bear cycle.

Future Prospects: Success or Failure Lies in Ecological Integration

???? Uniswap: The Return of Value and the Battle to Defend the DeFi Giant

Key Outlook: The protocol will be completely transformed from a "governance tool" into an "interest-bearing asset," completing a closed loop of value capture, but its liquidity throne is facing unprecedented challenges.

 Uniswap Protocol Revenue

1️⃣ Value Restructuring (Golden Window of Opportunity: 1-2 Years)

Strategic positioning: The Kun Palace's "Chief Symbol + Azure Dragon Returning to Its Head" signifies the return of a king and a revaluation of value. The activation of the fee switch is key to igniting this trend. $UNI will shed its label as a "valueless governance token" and become a core asset with clear cash flow and deflationary expectations.

Valuation target: Based on annualized buybacks and burns of several hundred million US dollars, its price-to-earnings ratio (P/E) will move from the current 2.2x (expense basis) to that of traditional technology stocks (20-30x). A return to its previous high market capitalization ($44.5) within 1-2 years is highly probable, and it is expected to challenge the $75-$100 range in the medium to long term.

2️⃣ Moat Guards (Core Conflict)

Risks: With Duigong Tianrui and Jiutian, competitors are launching a fierce attack with extremely high capital efficiency (ve(3,3) model). @Uniswap's strategy of sacrificing some LP returns in exchange for protocol revenue is a double-edged sword.

The key to success or failure lies in whether innovations such as V4 Hook and PFDA auctions can create new revenue streams for LPs sufficient to offset fee collection. If successful, the competitive advantage will be strengthened; otherwise, the company will fall into a negative spiral of liquidity loss.

⛓️ Unichain: A Risky Ecosystem Breakthrough

Key Prospects: This is a high-risk gamble. Success will unlock a trillion-dollar valuation potential, while failure may reduce it to a mediocre "backup plan".

Unichain Revenue Situation

1️⃣ Opportunities and Ambition

Positioning: Gen Palace (艮宫) with "Open Gate + White Tiger + Tianpeng". Open Gate signifies huge market opportunities and a new narrative, while Tianpeng represents bold speculation and expansion, suggesting that @Unichain aims to solve the mainnet performance bottleneck and value capture problem through a dedicated chain model, thus building a new ecological barrier.

Potential: If @Unichain can deeply integrate its sorter revenue, V4 native advantages, and the $UNI token economy, it will no longer be just a chain, but a value-laying layer for the entire @Uniswap ecosystem, with potential far exceeding that of a simple DEX protocol.

2️⃣ Risks and Challenges

The situation is perilous: the White Tiger signifies fierce competition and a sense of oppression, indicating that @Unichain will face overwhelming dominance from mature L2 ecosystems such as @base, @Arbitrum, and @Optimism. The Heavenly Peng (a star in the I Ching) also raises concerns about "excessive speculation" and "security vulnerabilities."

The core challenge: Cold start of the ecosystem: How to attract top-tier applications other than @Uniswap itself to join and form a network effect is its lifeline.

Proof of value: Can the initial annualized revenue of $7.5 million from the sorter support the huge chain development and maintenance costs, and also benefit $UNI holders?

???? Symbiotic relationship: We prosper together, and we suffer together.

Successful Scenario (70% probability): @Uniswap stabilizes its core user base through brand and liquidity, providing @Unichain with initial users and reputation; @Unichain, in turn, supports @Uniswap by offering lower transaction costs and more flexible Hook applications, consolidating its leading position and opening up new revenue streams. The two form a flywheel, with $UNI becoming the universal key to unlocking the entire ecosystem's value.

Failure Scenario (30% probability): @Uniswap suffered liquidity loss and market share erosion due to its fee on/off switch; @Unichain's development stagnated due to a lack of ecosystem. The two dragged each other down, and the story of $UNI's value recovery ended in disappointment.

???? Key Observations for Future Evolution

• Early December 2025: Final voting results of the cost switch proposal and immediate market reaction.
• Mid-2026: V4 adoption rate and early deployments on @Unichain.
• 2027: The number of Unichain's independent TVL and native applications, and whether it can form its own ecosystem.

What will become of Uniswap Labs: a spin-off and IPO?

In the future, it is highly likely that Uniswap Labs will spin off some of its businesses (such as @Unichain development and front-end services) into independent companies and seek an IPO.

✅ Favorable factors supporting listing (probability: approximately 60%-70%)

1️⃣ The game indicator shows "Open Gate" is available.

The Gen Palace, representing Uniswap Labs's drive and action, inherently carries the image of "opening a door," signifying new organizations, new opportunities, and collaborations. The spin-off of some business units into separate companies aligns perfectly with this concept.

The presence of Tianpeng Star in this palace signifies bold capital operations and expansion, indicating that the Labs team has sufficient ambition and motivation to push forward with such initiatives involving substantial financing.

2️⃣ Clear value proposition, avoiding core conflicts

This move cleverly separates "protocol governance rights" (belonging to the $UNI token) from "technology service and development rights" (belonging to the listed company's equity). The listed company can clearly use its technical capabilities, software development revenue, and future @Unichain sorter revenue as the basis for valuation, no longer directly tied to the security attributes of the $UNI token, thus resolving the most fatal regulatory contradiction.

3️⃣ There are successful precedents to follow

Just like the relationship between @Coinbase and @Base, and even earlier between @ethereum and @Consensys. @Consensys, as a core development force in the Ethereum ecosystem, has completed multiple rounds of financing and has been rumored to be going public on numerous occasions. This provides a clear blueprint for Uniswap Labs.

⚠️ Challenges and risks (obstacles still exist)

1️⃣ Market competition and pressure

The presence of the White Tiger in the Gen Palace indicates that even with a spin-off listing, the process will be accompanied by extremely fierce market competition and immense external pressure. The capital market will compare it to companies like @Coinbase and rigorously scrutinize its profitability and growth potential.

2️⃣ The delicate balance of the situation

Publicly listed companies still heavily rely on the @Uniswap protocol's brand and ecosystem. Ensuring that the interests of publicly listed companies align with those of the decentralized community will be a major governance challenge. If the actions of publicly listed companies harm the protocol's interests (such as charging excessive fees), it will trigger strong opposition from the $UNI community and undermine its very foundation.

3️⃣ Business Independence and Valuation Basis

The capital market will ask: What is this company's core competitive advantage? If it's merely a front-end service provider for the @Uniswap protocol, its value is limited. It must prove that it possesses technological advantages and revenue streams independent of the protocol (such as exclusive operating rights to @Unichain, cross-chain technology patents, etc.) to obtain a high valuation.

In closing ✍️

At the crossroads of DeFi, Uniswap Labs is using a fee switch as a key to usher in a golden age of value capture: the proposal is highly likely to pass, and $UNI will transform from a governance tool into an interest-bearing asset, breaking through alongside the @Unichain ecosystem and creating a flywheel effect where everyone prospers. Furthermore, if Labs successfully spins off and goes public, this will remove regulatory constraints, inject mainstream capital vitality, and propel $UNI to its peak. However, success or failure hinges on community consensus, competitive defense, and the guidance of fate.

Are you ready to witness the return of DeFi and the rise of the Web3 financial empire?