Regulatory approval, v4 launch, revenue-sharing experiments, it's time to re-evaluate Uniswap.

Introduction

For the past two years, Uniswap has been trapped in a valuation paradox: as the leading protocol in DeFi, it boasts the highest trading volume and transaction fees in the industry, yet it has been unable to bring even a penny of return to token holders.

But as we enter 2025, the story of Uniswap seems to be entering the next phase. The protocol itself is changing, governance is changing, and the only thing that hasn't changed is that the market is still pricing UNI using the "0% commission" logic.

When we try to answer questions about the valuation of UNI:

Given the current various "timing, location, and harmony", what should its reasonable valuation be?

So, it's time to re-evaluate Uniswap.

1. Current Status of the Agreement: From a narrative of no dividends to an undervalued reality

In February 2025, Uniswap finally welcomed a narrative-changing milestone—the U.S. Securities and Exchange Commission (SEC) announced the formal conclusion of its investigation into Uniswap Labs and "would not take any enforcement action."

This not only clears years of compliance shadows for Uniswap itself but also releases a clear signal for the entire DeFi market: there is still room for open financial infrastructure at the protocol layer to survive and expand within regulatory frameworks.

At the same time, Uniswap's product iteration has quietly completed a generational upgrade. In early 2025, v4 officially launched and completed multi-chain deployment. With the flexibility provided by the Hooks architecture, Uniswap's liquidity aggregation efficiency has further improved. The launch of the Unichain mainnet provides a more unified foundation and execution environment for its subsequent expansion. The actual performance quickly provided feedback: in May 2025 alone, Uniswap's monthly spot trading volume reached $8.88 billion, setting a new high for the year, with a total trading volume of up to $109 billion in nearly 30 days.

In addition to the rebound in trading volume and the launch of v4, Uniswap is also facing a potential key change at the governance level. On August 12, the Uniswap Foundation (UF) proposed to register a decentralized unregistered nonprofit association (DUNA) in Wyoming, and based on this, establish "DUNI" as the legal entity for Uniswap governance.

This means that in the future, the Uniswap DAO will have a legal identity, enabling it to sign contracts off-chain, hire partners, and fulfill tax compliance while recognizing the legal validity of on-chain governance. Most importantly, DUNI will provide limited liability protection for governance participants, significantly reducing personal legal or tax risks that may arise from protocol decisions. This structural improvement perfectly fills the last gap in the implementation of the profit distribution mechanism: the previously untouched "legal gray area" is being filled by the system. Once DUNI is established, and protocol revenue truly enters the DAO or UNI holders' hands, it will no longer just be a "vision" but a step with a practical execution foundation.

However, compared to the expansion pace of the protocol itself, the valuation pace of UNI is still on the old track—its price hovers around 10 dollars, DefiLlama shows that its holders' income is 0, and the annual fees generated by the protocol layer are nearly hundreds of billions of dollars, yet not a single cent has flowed into the hands of UNI holders.

There is certainly a reason behind this. From the very beginning, Uniswap's governance set the protocol revenue to "0% share," transferring all trading fees to LPs. But now, the story is changing.

The DAO has initiated experimental discussions on uniformly charging a 0.05% protocol fee for the v3 full pool, and the "Staking + Delegation → Profit Sharing" UniStaker module has already been technically deployed. The elimination of regulatory risks provides a more practical execution space for this distribution logic.

The problem is: the structure of the protocol has changed, but the market pricing logic has not.

Uniswap is evolving from a "non-dividend infrastructure" to a protocol with "potential cash flow distribution capabilities." However, the market's pricing of this evolution path is still stuck in the past valuation system of "only telling stories and not discussing profits."

And this is precisely what we believe - the current Uniswap is a starting point worth re-evaluation.

2. Valuation Basis: Looking at Future Valuation from the Perspective of Dividend Expectations

In the existing pricing logic, UNI is more regarded as a purely cryptocurrency. Without dividends or fee backflows, the market will naturally not price it according to the logic of "being able to generate cash flow."

Once this agreement is established, the valuation logic of UNI will no longer be "market sentiment × liquidity game", but rather "distributable protocol income × distribution ratio × PE multiple."

In this case, the most direct valuation method is:

Expected Valuation = Expected Dividend for the Year × PE Ratio

• Dividend: Calculated using the protocol annualized income × distribution ratio.
• PE multiple: In most DeFi protocols, a range of 40–60 times is common, but the scale and revenue structure of Uniswap are sufficient to support it in obtaining a higher premium.

First, let's look at the scale. According to DefiLlama data, Uniswap's trading volume over the past 30 days reached $109 billion, significantly surpassing PancakeSwap's $65.5 billion and far exceeding Raydium's $32.6 billion. In other words, its monthly trading volume is close to the total of the top five DEXs in the market.

Compared to other DEX-related data, it is evident that protocols like Uniswap, which have demonstrated cross-cycle capabilities and hold an absolute market share in revenue, have long established a "discontinuous" leading pattern. This advantage is not just due to its large scale, but also reflected in the sustainability of income and breadth of distribution—it covers multiple chains such as Ethereum, Polygon, Arbitrum, and Optimism, with strong stability in liquidity and user base. Therefore, it can be priced similarly to blue-chip cash flow assets in traditional financial markets; at this scale, UNI, as the leader, has a competitive barrier and bargaining power sufficient to enjoy a premium much higher than the typical 40-60 times PE of ordinary protocols.

Secondly, compared to the current P/Fees/TVL ranges of other DEXs, leading projects are generally valued 30% to 100% higher than second and third tier projects. Against the backdrop of global regulatory narratives, the anticipated implementation of fee switches, and institutions being more inclined to allocate to top protocols, the reasonable and conservatively expected PE for UNI is calculated as:

Using the industry low average of 40 times PE as a base * (1+30%~100%) = UNI PE = 52 times - 80 times

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The median PE value is 66 times.

Finally, the PE is not a static number; it fluctuates with changes in market interest rates, industry prosperity, and the competitive landscape of protocols. If you want to compare the revenues and valuations of other protocols, you can directly check the data on DeFiLlama and see how UNI ranks among its peers. You'll have an intuitive answer as to whether a 66 PE is overvalued.

\4. Valuation Analysis: Uniswap, why is it worth $26 in the future?

So if we look at Uniswap from the perspective of traditional finance, the most straightforward valuation method is a simplified version of the discounted cash flow (DCF) approach: using the distributable cash flow for the coming year as a benchmark, multiplied by the potential price-to-earnings (PE) ratio to arrive at a reasonable market value range.

In the past 30 days, Uniswap's total trading volume was approximately $109B. Based on an average fee rate of 0.3%, the total fees generated by the protocol during this period were about $327M. Since the fee switch has not been activated, this portion of revenue currently all goes to LPs; however, once the dividend mechanism is implemented, the protocol can allocate a certain percentage (assuming 10% to 25%) to UNI holders.

Annualize the 30 days of trading data to obtain the annual distributable cash flow range:

• Distribution Ratio 10%: $109B × 0.003 × 0.10 × 12 ≈ $392.4M
• Profit sharing ratio 25%: $109B × 0.003 × 0.25 × 12 ≈ $981M

(According to the Gauntlet report, Uniswap v3's fee switch mechanism supports tiered splits of LP income at 10%-25%. Currently, the DAO governance has also opened an experimental pool to uniformly collect a 0.05% protocol fee, indicating that the protocol is attempting to activate the possibility of dividends without harming LPs.)

In the current market environment, the PE level we reasonably inferred in the previous section is approximately 66 times. Substituting into the calculation formula:

• Low share scenario (10%): $392.4M × 66 ≈ $25.9B
• High commission scenarios (25%): $981M × 66 ≈ $64.8B

Considering that the current total market value of UNI is only $10.5B and the coin price is approximately $10.6 (as of 10 PM on August 8, 2025), this means that under different dividend ratios, the re-evaluated theoretical price range for the coin is:

• Low commission scenario: about $26.2
• High commission scenario: about $65.4

From the valuation results, even with a conservative 10% profit-sharing ratio, the corresponding reasonable price has an upside potential of over 2.5 times compared to the current level. Under more aggressive assumptions, the potential revaluation could exceed 5 times.

In other words, the market's pricing of UNI is currently stuck in the "underestimated" period before the fee switch is activated. Once the dividends are realized, the cash flow logic will replace the pure trading volume sentiment, becoming the core driving force for the upward shift in valuation.

Of course, a project's reasonable valuation is also assessed by multiple factors comprehensively. It's not very consistent with market logic for UNI to suddenly rush to the valuation ceiling, so expecting the lowest number around $26 is still worthwhile.

Five, Between the Reality and Imagination of Dividends: Opportunities, Paths, and Risks

You might be wondering: the profit-sharing agreement sounds great, but can it really be fulfilled?

In fact, this question has been an unresolved topic hanging over the leading DeFi projects for the past few years. Currently, Uniswap, aside from the regulatory, governance, and technical issues mentioned above which are being properly addressed, is actually not the first in the industry to take the plunge:

• SushiSwap has always used "transaction fees distributed to token holders" as a token incentive since its inception;
• Protocols like GMX and dYdX have already established a market mentality of "staking = income rights."
• New generation trading protocols such as Ambient, Maverick, and Pancake v4 have all integrated "revenue-sharing logic" during their launch phase.

But it does not mean that the risk has disappeared.

The fee switch has not officially opened yet, and all valuation expectations are still based on "reasonable" assumptions.

1. The 2% perpetual inflation mechanism was launched this year, and before the dividends are realized, each newly issued UNI actually dilutes the value of existing holders.
2. In addition, the activation of the fee switch does not mean that everyone can "sit back and enjoy the benefits"; there may be thresholds for dividends, and the actual proportion of cash flow sharing is still unknown.
3. The most fundamental risk lies in the fact that everything still depends on the decisions of the DAO.

But this time, at least we have seen Uniswap moving forward with ambition.

Conclusion: Beyond valuation, it is a bet on direction.

At this point, it can be confirmed that Uniswap's valuation logic has indeed reached a turning point.

The only lagging factor is the market sentiment and pricing model.

From the current data, Uniswap's trading volume has returned to a high level, the profit-sharing mechanism is beginning to have the possibility of being implemented, and the cash flow model is reshaping the market's understanding of UNI. Compared to the vague narratives during the bubble period, today’s Uniswap is more fundamentally based on "value return."

Of course, valuation models can only tell us: "If everything goes smoothly, how much could UNI be worth?"

But in the end, the value of UNI lies not just in whether it can distribute dividends, but in whether it can regain its voice at the moments when the DeFi narrative is least favored.

Because the market may not always price rationally, but it will eventually catch up. And this time, perhaps it is time to go back to class.

The data in this article is based on statistics from August 8 to August 10, 2025, and subsequent situations may change.