Uniswap has hiked trading fees on its decentralized exchange by approximately 67%. This move comes in the wake of the US Securities and Exchange Commission’s (SEC) potential legal actions against the DeFi protocol.
Information on the official website shows that users will have to pay a fee of 0.25% for most swaps, up from the previous rate of 0.15%.
Uniswap Raises Fees to Prepare For Legal Battle
Uniswap clarified that this fee adjustment aims to ensure sustainable funding for its operations. Although fee-eligible trades have seen an uptick, certain transactions, such as swapping stablecoin pairs with identical underlying assets or wrapping and unwrapping WETH, remain exempt from fees.
Users can circumvent the fee by utilizing an alternative interface to access Uniswap. However, any transactions conducted on the mainnet and supported Layer 2 networks will incur the increased fee.
Interestingly, the fee revision coincides with Uniswap’s acknowledgment of a Wells notice, a precursor to enforcement action, from the SEC. Consequently, market observers suggested that Uniswap’s transaction fee increase was a strategic move to bolster its financial reserves in anticipation of the potential legal proceedings from the financial watchdog.
“The interface fee goes to Uniswap Labs to fund the operations of the team building out products around the protocol… Or in this case, fight a lawsuit with the SEC on behalf of the entire industry If you do not want to pay the fee, then just use an aggregator. Normal users are better served with an aggregator anyway (hint, those often have their fees too),” Dan Smith, a researcher with crypto platform Blockwork Research said.
The SEC’s litigation against crypto entities tends to be protracted and financially burdensome. For instance, Ripple has spent over $200 million in its ongoing case against the SEC.
Despite the hefty financial outlay that may be required, Uniswap stated its commitment to contesting the lawsuit. The firm considers its effort a crucial step in defending the principles of DeFi.
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