Founder of DeFi Report, Michael Nadeau, believes that Uniswap’s upcoming layer 2 solution, Unichain, has the potential to significantly increase revenue for Uniswap Labs and its UNI token holders. According to Nadeau, Unichain could bring in approximately $468 million annually in settlement fees that would otherwise have been paid to Ethereum validators.
The protocol, which generated nearly $1.3 billion in trading and settlement fees across various chains last year, currently does not receive any of that value. However, with the launch of Unichain, Uniswap could benefit from staking maximal extractable value, potentially adding an additional $100 million in yearly revenue. This value comes from the MEVs that will no longer go to Ethereum validators but instead to Uniswap and its token holders.
Nadeau highlighted that Uniswap’s integration with the Unichain network allows them to capture more of the value they create through their interface and smart contracts. This move could have significant implications for Ethereum validators, who stand to lose a substantial portion of the $368 million in settlement fees typically paid by Uniswap. Additionally, ETH token holders may be affected as the protocol burns less ETH and allocates more settlement fees to UNI token holders.
While Uniswap Labs’ decision to launch Unichain has been met with some criticism, particularly from Ethereum co-founder Vitalik Buterin, who questioned the need for a layer 2 blockchain, the project aims to address scalability challenges within the Ethereum network and improve overall adoption.
Unichain is currently available on a live private testnet, with a public mainnet launch expected later this year. As the DeFi space continues to evolve, the potential impact of Unichain on Uniswap Labs and its ecosystem remains a topic of interest for industry experts and investors alike. The shift towards capturing more value for protocol creators and token holders could reshape the dynamics of decentralized finance and pave the way for new revenue streams within the sector.