The price of Uniswap's native token , UNI, experienced a decline after the decentralized exchange ( DEX ) was forced to postpone a highly anticipated proposal that would have improved the token's governance and fee distribution model.
The proposal aims to simplify Uniswap's fee mechanism, allowing UNI token holders who have staked and delegated their tokens to be rewarded. This will increase the efficiency of fee adjustments and reduce the governance burden on delegates while maintaining the “credible neutrality” of the protocol.
The delay had a real impact on UNI prices, as seen in the UNI/USD daily chart above. The token has dropped to the key support level at $10.20 – a drop of 8.6% in the last 24 hours. If the token fails to regain bullish momentum and the $10 support level, it could retreat further to $9.66 and potentially as low as $9.33.
Uniswap In Legal Battle With SEC
Adding to Uniswap's challenges, the company is embroiled in a high-profile legal battle with the US Securities and Exchange Commission ( SEC ). The regulatory agency has issued a Wells Notice to Uniswap Labs, signaling its intention to recommend enforcement action against the company.
Uniswap Labs has pushed back, arguing that the SEC case is flawed and fails to recognize the difference between tokens as a store of value and tokens as securities. The company has expressed confidence in a favorable outcome, noting that its legal team has a strong track record of winning against the SEC, stating:
“But we are ready to fight. Our attorneys are 2-0 in high-profile SEC cases. Andrew Ceresney, former head of enforcement at the SEC, represented Ripple in their victory over the SEC. Don Verrilli, former US attorney general, has argued more than 50 cases before the US Supreme Court and represented Grayscale in its successful case against the SEC.”
Uniswap Continues to Grow Despite Setbacks
Despite these setbacks, Uniswap continues to show substantial growth, with a total value locked ( TVL ) of $6.1 billion and a market capitalization of $7.7 billion, according to DeFiLlama data.
Additionally, CoinGecko data shows that UNI token trading volume has increased by 21.5% over the past 24 hours, reaching $264 million.
As the Uniswap community awaits updates on pending governance proposals and the outcome of the SEC battle, the platform's long-term prospects will likely depend on its ability to navigate these challenges and maintain its position in the market.
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