The UNI token is the governance token of the Uniswap protocol, one of the largest decentralized exchanges (DEXs) on Ethereum and other compatible blockchains. According to Sharlife.my and Sahal Wallet (MRHB DeFi) the token is permissible.
Main utilities of the UNI token:
- UNI holders can participate in the decentralized governance of the Uniswap protocol.
- Delegated Participation. If you don’t vote yourself, you can delegate your voting power to trusted community members or DAOs who participate actively in governance.
- Potential utility in the future: Fee Distribution.
Proposal to reward UNI holders: There’s been discussion (and votes) around implementing a “fee switch” — a mechanism that could distribute a portion of swap fees to UNI holders. If enacted, this could resemble a yield-like reward for participants, but it’s not Proof-of-Stake, and it’s not active yet.
Why hasn’t the Fee Switch (fee distribution) been enabled yet?
- LPs might leave if they start receiving less.
- There is no technical implementation for distributing revenue to UNI holders.
- Legal risks: revenue may turn UNI into a security.
UNI is a utility token, not a cryptocurrency with it’s own consensus protocol. There is no Proof-of-Stake in such cases.
That means:
❌ UNI is not a staking token for validating blocks (like ETH on Ethereum PoS).
❌ UNI does not secure the Uniswap protocol through any consensus mechanism.
❌ UNI Does not currently give block rewards or protocol revenue directly to holders.
Considering this, using UNI for staking in vaults for additional yield is better to avoid at this point, because it is possible that the token will be used in lending protocols for generating that yield. The only potential additional option for UNI is providing liquidity.
